Let’s talk quotas. For any salesperson, novice or veteran, the word alone can inspire some pretty intense reactions. Either it’s terrifying, automatically ushering in overwhelming pressure and a sense of dread. Or it ignites fierce competitiveness that can drive salespeople to hit incredible numbers. So, after decades of enforcing quotas and benchmarks for sales teams, business owners and sales managers want to know. Are quotas really the best way to motivate a salesforce these days?
Today’s sales workforce looks vastly different than it has in years past. And how consumers and customers make purchasing decisions has, too. So, it only makes sense that the old way of measuring success and performance no longer be relevant, right?
There’s more to quotas, what they’re intended to do, and how they work than you might think. And to really know if sales quotas make sense for your teams, it boils down to a few key elements.
Aggressive Quotas Were Effective in 2015
Not too long ago, titans of industry, including Forbes, all shared proven insights behind aggressive quotas actually working to improve sales performance. Across a variety of industries, the implementation of aggressive quotas did, in fact, correlate to better numbers. Sales members are typically competitive by nature. And the effective use of quotas would tap into that fierce competitiveness, whereby most would respond well to the challenge of monthly or yearly quotas. And honestly, for some industries, this type of performance metric continues to be the driving force behind any strong sales team.
But so much has changed since 2015.
Thinking about the mass adoption of online purchasing and decision-making alone has made it harder for salespeople to build customer relationships. People don’t want to meet with someone to be “sold” a product or service. Instead, consumers across a variety of segments are increasingly doing their own homework, adopting tools to solve their own problems, and engaging with brands they like. If your sales teams are missing their traditional quotas, it might be less about your workforce and more about your changing client audience.
Quotas for Prospecting Are Great
Today’s sales assassins are changing direction. The days of generic elevator pitches and impulse conversions are in the rearview mirror. The savviest salespeople are mastering their strategic relationship-building skills. They’re focusing their efforts on prospecting, introductions, and filling their funnels full of potential leads that might result in sales calls and conversions later.
I had a sales manager once share the Ferris Wheel analogy. The riders getting off the ride represent the conversion or the final sale. But before anyone gets off any ride, they first have to:
- Want to ride it and get in line
- Wait and then be seated in their swinging cart
- Take the journey upward
- Get stopped at the top and along the way as other passengers get off the ride
- Make a complete rotation or two before finally exiting the ride
Sales is more like the Ferris Wheel today than ever before. First, you have to attract customers to your product or service. Only when they want it will they engage. They might have to cycle through an entire funnel of interactions and engagements with you before they ultimately decide to buy. So, how are your sales quotas fitting into that dynamic? If you’re only measuring conversions, you’re missing a host of other sales metrics that lead to those final numbers. And if your marketing, advertising, and branding aren’t attracting riders to your Ferris Wheel, your salespeople won’t ever meet their quotas.
This is why having a sales quota for the prospecting and lead generation phase of the sales cycle is becoming more advantageous. When you drive your teams to fill their funnels, they’ll naturally have plenty of potential business to close. And sales is still a numbers game, even if you’re looking at a different set of metrics than you were before.
Quotas for Performance Metrics
This isn’t a pitch to dismiss your sales quotas altogether. They’re still essential tools for measuring performance. You set goals and objectives for your company’s growth, scaling, and revenue. None of which will ever be possible if you’re not onboarding new clients. When leaders demonstrate to their sales teams just how their performance fits into the overarching strategy, those sales reps will see that the quota is more about keeping the company healthy and less about the “gotcha” tool to micromanage their efforts.
When you have a team member who misses the quota, it should signify to the sales manager that there might be a reason to have a conversation. If the salesperson knows why he or she didn’t hit the metric, and most often, they know exactly what went wrong, it’s an easy fix. But if the sales rep misses several consecutive quotas, that’s more of an indicator of poor performance. Sales managers can look to identify if more training is needed or if additional resources need to be provided. Or maybe, you just have a lazy person on board, looking to milk a few base pays before jumping ship to the next “sales job.”
The key is not to “sink or swim” your teams on quotas alone. Have the conversations and identify the looming issues. Poor-performing sales reps can be transformed into sales assassins with the right coaching, tools, and motivation. And considering how tough it is to find and hire great salespeople these days, it might be more advantageous to work with the team you have to improve their skills and efforts rather than start over with a rookie bench.
Quotas Can Be Motivating
Having some 20 years of first-hand sales experience, it’s the sales quota that keeps you going. Much like any other role, sales reps have good months, bad days, and record-breaking years. It fluctuates because, well, we’re human. But getting through those lazy moments and those days you just don’t feel like cold calling is imperative and made possible by that looming sales quota.
Consider implementing tiers of quotas or benchmarks for your teams. Work with each sales rep individually to analyze the pipeline and project short, mid, and long-term projections. Setting a yearly goal is the starting point. Maybe it’s to sell $100,000 in widgets. Working backward, that translates to $25,000 widgets sold each quarter. That’s a little more than $8,000 in widgets every month, or $2,000 in widgets sold weekly. From there, managers can break it down even further to demonstrate how many cold calls need to be made in a day to achieve the appointments and numbers for the week. Sales reps will then see the path of math to hitting their goals. Hitting $100,000 sounds lofty and out of reach. But making 30 calls every day is a tangible task.
Who Determines the Quota?
Don’t use outdated metrics to determine quotas. Instead, check your analytics, monitor your industry fluctuations, study the economics in your region, and talk to your sales managers. The pandemic demonstrated just how quickly consumer purchasing habits could change. If you’re not completely in tune with all the factors that play into how you close new clients, you’re not measuring the right things. Don’t hesitate to talk with your salesforce directly, either. They are your front line, your first line of defense, in the trenches and in the field, hearing all the objections directly.
Before you settle on any sales quota, consider trying to hit it yourself. No one is more of a champion of your business than you are. And if you’re unable to hit a weekly or monthly quota, neither will your best sales members. Additionally, make it a best practice to revisit established quotas quarterly or annually to conduct an audit and verify if any changes need to be made.
How Your Sales Teams Feel About Quotas
If you’re using sales quotas the wrong way, your teams will absolutely hate them. And they’ll likely leave for another organization that uses quotas the right way. Quotas are absolutely about workforce accountability. But they’re more about setting and hitting goals, motivating the teams, and quickly identifying challenges that may arise along the way. If you’re brow-beating your teams about their quotas or hovering with threats of consequences, they won’t stick around. And if your quotas and consequences are unrealistic, they’ll abandon ship, too.
If you really want to know what your sales teams think about their quotas, ask them. Remember, the best quota systems are those developed with your teams, not based on company objectives alone. As much as everyone despises ongoing meetings and daily recap emails, consider keeping a quarterly one-on-one schedule with each member of your team. Sit down and ask them about the objections they’re encountering. Ask them about tools and resources they wished they had at their disposal. And make sure they’re feeling confident about their career trajectory and earning potential. They’ll honestly tell you exactly what you need to know about how to help them improve and what realistic quotas make sense to implement.
Keep Your Job Quotas vs. Reward Quotas
Quotas should still be viable metrics in your business model. What they shouldn’t be, however, is an end-all benchmark for differentiating a good sales rep from a poor one. Sell 100 widgets every month, or you’re fired. No one wants to work with those do-or-die consequences, especially if they’re strong reps who recognize other failures in the marketing and sales strategy that won’t support their efforts.
When your reps do well, you do well. See to it that you’re using quotas as a tool to improve their chances of success within your organization, financially and professionally. Discuss with them their personal goals for earnings and translate those goals into what they need to do in sales to get there. Reward those who meet their goals and quotas with recognition, front-row parking, and bonuses. And whenever you raise the stakes or the quotas, don’t forget to also raise the reward.
Don’t forget to roll up your own sleeves and get in there with them. If the month is closing and the team is shy of the quota, get creative with contests and spiffs. Get on the phones with them or go in the field and set the pace. Reinforce the idea of meeting a quota as a positive experience, not a negative one. And they’ll recognize their value in achieving those quotas, driving them to higher performance levels.
Salespeople Want to Be Autonomous
The best salespeople want to be assigned the job, know the goals, and be left alone to work their magic. Don’t impose a quota system and then micromanage their every move. Here’s what I mean.
In one sales role I had, I had a manager come to me in the office one day and say, after the morning meeting, you need to get out of the office. Upper management doesn’t want to see any salespeople in the office during the day. So, I had to go find somewhere else to make my calls and send my follow-up emails. It was illogical, too, since I had always managed to meet my quotas.
In another sales role, I had a client call me. She told me that one of my sales managers had shown up at her place of business, asking if I had been by to see her. I had, of course. But she was put off by this “checking up” on me by my manager, so much so that she called me to tell me about it and express how shady she felt it was. I was embarrassed, and it turned out I hadn’t been the only rep he’d backtracked. Again, it was entirely unnecessary since we were all regularly hitting our quotas, too.
The moral of these stories is don’t be a micromanager. If you set quotas for your teams, let the quotas do the work. Give your reps what they need to succeed and help establish the goals for them to be successful. Then, move out of their way and let them do what you’ve trained them to do.
So, are quotas still a thing anymore? Yes. And they’re still important to your company bottom line. Just be sure that you’re using them the right way and not fostering an environment of unnecessary pressure, unrealistic expectations, or unwarranted consequences. Remember, your sales reps want to be successful. Quotas should be used to help them do just that.
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