The chase between a sales rep and their sales quotas is perpetual.
Right from the beginning, you are given sales quotas to achieve, so you frame your entire day just to work on that one single target.
Now, as a sales manager, you must be wondering, that’s too much work for just one quarter!
And I agree. Sometimes, your sales quota might seem unattainable.
So, what do you do in such a scenario?
Do you give up on that sales quota?
Or try so hard to attain it and lead to burnout?
Well, both approaches are harmful in one way or another. So, instead of worrying too much about the goals, you need to focus on an effective sales quota strategy.
In this guide, I’ve shed a light on every nit bit of achieving sales quota and its proven strategies to help your team perform better. You can skip to your favorite part 🙂
- What is a sales quota?
- What is the importance of sales quota for your business?
- What are the types of sales quotas?
- What is the difference between sales quota vs. sales targets vs. sales goals?
- How to set your sales quota?
- What are the most common methods for setting sales quotas?
- How to hit sales quota: Proven strategies from sales experts
- How Salesmate can help you hit your sales quotas?
Let’s start from the basics.
What is a sales quota?
A sales quota is a series of targets set by sales leaders for a specific time period, usually for a quarter.
Sales quotas can be either revenue-oriented or they can be for a number of products to be sold. That varies from model to model.
Based on how much of the sales quota sales teams achieved, their sales performance is measured.
What is the importance of sales quota for your business?
Setting a sales quota is not just to increase revenue; it provides various benefits in improving the overall performance of your sales team as well.
1. It levels up the performance
One of the main reasons for setting sales quotas is to give a performance boost. Sales managers are already aware of the potential their reps have. Setting up sales quotas can help inspire reps to work harder toward achieving their targets.
2. Visualize the sales plan
Yes, sales managers are responsible for creating sales quotas for their teams. In addition, sales quotas also reflect the company’s overall sales plan for that specific quarter.
Therefore, along with the individual growth of your team members, the company’s growth is also measured using sales quotas.
FYI, sales quota, sales target, and sales plan can often create confusion as they mean more or less similar. I have added a section in this article to clear things up.
3. Acts as a guiding force
Sales quota ensures that the sales team remains on the right path when they’re working towards achieving their goals.
For instance, if you have five different product lines, you can create quotas based on which product is more in trend, which product you need to sell more this quarter, and strategies to achieve the same.
This way, your team will know which product to prioritize and achieve their sales quota seamlessly!
What are the types of sales quotas?
Sales quotas are determined based on the company’s size, its revenue, and the number of products that the company sells. So, different companies need to implement different sales quotas for their sales reps.
Let’s find out what are the different types of sales quotas to determine which one will work best for your company.
1. Profit quota
The primary focus of the profit quota is on the gross profit of the sale, not total revenue.
You can find gross profit by subtracting the cost of goods and acquisition cost from total revenue. This method motivates the reps to focus on the profit generated from each product sold, not the total revenue.
Therefore, your sales reps will be inclined to close more high-value clients to reach their sales quota faster.
2. Volume-based sales quota
A volume-based sales quota takes the number of units sold or total revenue into consideration. A majority of small businesses adopt volume-based sales quotas as the initial goal for every company is to sell more products.
The success of this sales quota is measured by whether the sales rep is able to sell x number of units in a given time period or not.
3. Activity quota
An activity quota is mainly for SDRs or BDRs, wherein they need to accomplish a certain set of activities within a given time period.
The success of activity quotas is measured based on whether or not your rep is able to complete the assigned tasks or not. Activity quotas can be calling x number of leads per week, sending emails, conducting training sessions, etc.
4. Forecast quota
As the title gives it away, forecast quotas are created based on historical data and performance. Such quotas can be assigned to various territories based on their revenue or teams.
For example, Ryan sold products worth $10,000 in the last quarter. So, based on the revenue and your rep’s potential, you decide to increase his quota by 20%. So, his goal for the next quarter will be $10,000 plus $2,000, that is $12,000.
5. Combination quota
If you’ve got a rockstar sales rep on your team, then combination quota is the right fit. A combination quota is where profit and activity quotas both are involved.
Therefore, along with achieving the revenue quota, your rep will also complete the small set of goals and activities assigned to them.
Now’s the time to end your confusion.
What is the difference between sales quota vs. sales targets vs. sales goals?
When we talk about sales quota, it mainly refers to the revenue that a team or a rep needs to achieve in a specific time period. Sales quotas are usually time-bound and are measured based on whether your rep or team was able to achieve it or not.
On other hand, sales goals are long-term. They are the primary goal and objectives of your company.
If you have an insurance firm, then the main goal of your firm would be to bring in more insured clients to the business.
Sales targets are a series of small activities and tasks that are performed in order to complete the sales quota and have an impact on the main sales goal.
To sum up, sales quota is time-bound which a sales team needs to achieve. Sales goals are the long-term vision or objective of the company. A sales target is a combination of small tasks and activities a team needs to perform to achieve the quota.
It’s apparent that all three terms are interlinked, but when you have a large business, it’s easier to define and bifurcate them so your team knows how to prioritize their tasks based on the short-term and long-term goals and quotas.
How to set your sales quota?
Did you know that only 24.3% of salespeople exceeded their sales quota last year?
Yes, it’s indeed shocking that less than 30% of salespeople were able to achieve and exceed their sales quota.
The problem might lie in how you set your quotas.
Ideally, you want to set a realistic sales quota, but how do you do that?
All you need to do is follow these simple steps and you’ll create a sales quota that helps your company grow and is achievable by your team.
1. Align the quota with your company standards
Before setting up the sales quota, you need to refer to the historical data and performance of your company and the sales team.
How much revenue did the company earn in the previous quarter? What’s the productivity level of your sales reps? What is the bandwidth of your reps?
Based on your company’s standards and available resources, you can prepare a framework and set quotas for individuals and teams.
2. Be prepared for the changes in market
A business is affected by internal as well as external activities.
Changes in market trends and preferences can also affect your business, especially if it is B2C.
For example, you only had one competitor in your city till now. But last month a similar business kicked off, and now the customers are divided. This is something out of anyone’s control. All you need to focus is on customer retention and providing value.
These changes will keep happening, it’s your responsibility to stay focused on your sales quota and ensure it’s not majorly affected.
3. Calculate your past sales quotas
Sales quotas are usually created based on past performance. Therefore, you need to extract the data of the last 2-3 quarters and compare them.
Have you been able to achieve your quotas? Or has there been a decline in performance? Compare the performance of different quarters, and based on that set up a quota that can help you achieve your goals faster.
4. Determine the target review period
A review period mainly depends on your sales cycle.
If you have a short sales cycle, you can identify the roadblocks that are preventing you from achieving the sales quota and take relevant action.
With a long sales cycle, you have sufficient time to cover up for the losses made in that time period and bounce back. Since every business has different requirements and processes, the review period will also differ.
5. Communicate your expectations
When you’re working in a team and have to collaborate with others, communication is the key.
Yes, if you want your rep to achieve x revenue quota by the end of next month, you need to convey that clearly. Moreover, you can also assist them in preparing the framework for the same.
With clear communication, you and your team will be able to achieve quotas faster without any hindrance.
What are the most common methods for setting sales quotas?
Now that you have figured out which quota to adapt and how to set it up, it’s time to find out which method to follow. Yes, there are two different methods for setting sales quotas: the top-down approach and the bottom-up approach.
What is a top-down approach for sales quotas?
In the top-down approach, the company needs to set the quota for an entire period and then assign different quotas to the reps to achieve that main goal.
Hence, the top-down approach first determines the main sales quota and then is further bifurcated based on the reps.
For example, your sales quota for next quarter is $20,000. To achieve this quota, you have 4 reps on your team. So, you’ll assign a $5000 quota to each rep in order to achieve $20,000 in revenue by the end of the next quarter.
What is a bottom-up approach for sales quotas?
When you have difficulty figuring out the total revenue you want to set for your sales quota, you can adapt the bottom-up approach.
In this method, you determine the quotas based on your reps’ potential and how they have performed in the last quarter.
For implementing the bottom-up method, you need to find out how many deals your reps closed, how much revenue they were able to generate and the time taken to perform the same.
Based on that, you can assign different quotas to your reps.
For example, you have 5 sales reps.
Out of these five, two are top performers, two are average, and one needs more guidance and motivation to improve. So, in such a scenario, you will assign a sales quota of $3,000 each to your top performers. Assign a $1,500 sales quota to average performers, and $1,000 to the one who needs motivation.
Your total sales quota for the next quarter would be $10,000.
How to hit sales quota: Proven strategies from sales experts
For this section, I reached out to the best in the business. I talked to four sales experts on how they achieve their sales quota. Let’s see what they have to say.
1. Kevin Miller
Entrepreneur at Kevin Miller
I always make sure to be aware of my goal and what I need to do to work towards it. I update my progress regularly, and set a clear plan for how I’m going to achieve that goal.
Another thing that helps is finding somebody else who’s also trying to do the same task, and brainstorming ideas together. I try to put myself in the other person’s shoes and understand what they want. I take their needs into consideration and also make sure that we’re both happy with the end result.
If something doesn’t work out how I want it to, I fix it. If nobody wants to buy my products or services, then that means that there’s a problem, and this gives me an opportunity to figure out what went wrong and make changes for next time. It also helps me understand why these changes were necessary.
I try to think of the goal as if it were already achieved. This allows me to properly focus on what needs to be done for that, and I’m more motivated because I can see the end result.
I always make sure not to give up – even when things don’t work out how I want them to or a potential customer seems a little bit too hard to handle. If you keep going, eventually good things will happen.
It’s important to know who your target audience is and why they would be interested in your products or services. Then you can tailor them accordingly, whether this means using certain words or phrases that attract their attention or creating something which matches their values and interests. Knowing these things also allows you to improve your product or service because you have a better understanding of how it will be used and who is going to use it.
2. Daniel Rutberg
Co-founder & Chief Operations Manager at MuteSix
One of the most successful strategies for meeting your sales quotas is to be willing to pivot when the need arises.
Too often, some companies take the “let’s wait and see” approach. However, we can see how that worked out for once-successful major corporations. Does Blockbuster ring a bell?
Instead, always have a Plan C to your Plans A and B, and be ready to put them into motion if your current strategies aren’t generating the results for which you’d hoped. Closely monitor your data, and pay attention to any red flags that arise, and be ready to act accordingly.
3. Marc Atiyeh
CEO at Pawp
While we could go into a number of different strategies that can provide an excellent ROI, achieving sales quotas all begins with the customer experience.
Regardless of the type of marketing campaign that is implemented, if the consumer isn’t well-educated and aptly informed about how the product or service can be of benefit for their specific needs, then it may not end in a conversion.
Spend more time listening to your customers and understanding their needs. That way, you can supply the right features for the right clients, which will help raise your sales quota every time.
4. Nancy Belcher
CEO and Co-founder at Winona
Keeping your sales “pipeline” full of potential customers is a great strategy to build more connections that lead to sales.
Take time to experience each customers’ needs, while balancing your other leads, in order to ensure they feel they are being taken care of with their issues that your company can solve. Also, if one potential customer turns your product down, you have options with other customers to fall back on, so you are not scrambling by the end of the sales quarter.
How Salesmate can help you hit your sales quotas?
When sales quotas are concerned, it’s the consistent efforts that count. And to achieve that, you need a CRM that will help you streamline your tasks and automate the manual process.
Salesmate is one advanced CRM that automates your entire sales process with its powerful features. Here are the main features of Salesmate that can help you achieve your sales quotas faster.
1. Deal management
When your sales reps are completely focused on closing deals and achieving sales quotas, they might miss out on the important information of your potential deals.
Managing multiple deals and prospects isn’t easy. One error and the entire deal falls through the crack!
With Salesmate, your reps can have a clear view of all your deals, find out the ones that are high-priority and close the deals faster. Moreover, they can also move the deals through the sales stages as they progress.
2. Sales coaching
Not all sales reps are skilled enough to crush their sales quotas; with coaching, you can improve their skills. You can utilize the below features to coach your sales team.
a) Sales Insights
Find out which sales reps are closing more deals and at which stage they’re facing challenges. Your rep might be a pro at prospect, but when it comes to negotiation, they might lose out on important leads.
With the help of actionable sales insights, you can find out how much efforts your sales reps are putting and at which stage their deal is getting stuck most of the time.
b) Goal Tracking
A healthy competition between reps can certainly derive better results. The Goal Tracking feature shows you the goal determined for each rep and whether they have achieved it or surpassed it.
Sales leaderboard is the right feature for encouraging your reps to work towards their sales quotas and crush it!
c) Sales Activity Tracker
Use Salesmate Activity Tracker to know how many calls and emails your reps have made in a specific time period and what is the outcome.
You can also find out which rep is booking more meetings with clients and performing better than others using the activity tracker.
While your reps are working towards their sales quotas, you need to monitor their progress and ensure that everything is running smoothly.
Manual task assignments, client interactions, and outreach can get exhausting. In this case, Salesmate’s automation features can save your day!
a) Workflow automation
Manage and assign incoming leads to your team with auto-assignment to speed up the process of discovery calls with Salesmate Workflow Automation. Moreover, if you’re interacting with a high-intent client, you can create and send personalized emails to make a lasting impression.
Reduce the workload of your sales reps by using email sequences to automate the outreach. Stay connected with your clients by automation email follow-ups and increase your response rate.
c) Automation journeys
Salesmate’s Automation Journeys streamline your entire marketing and sales process. From cold outreach to engaging with potential clients, to closing the deals, you can use automation to create triggers that get activated when a specific condition is met.
This practice will help you enhance the customer experience and have behavior-based engagement so that you only engage with interested leads.
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Achieving sales quotas will become 3x simpler when you are following a set of strategies along with using CRM to automate your manual process.
Whenever you’re setting up the sales quota for your reps, ensure that you follow the steps that we have covered so that your reps surpass their sales quotas and bring more revenue!
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