The rate of sales reps meeting quotas has been decreasing in recent years, from an average of 63% in 2012 and 2013, to 58.3% in 2014, and 58.1% at the start of this year, according to CSO Insights’ Sales Performance Optimization Study. As you might imagine this is worrisome for sales organizations.
Sales reps not meeting quotas affects team morale, leads to frustration, and results in an overall decrease in performance, not to mention the negative impact to revenue. So what can you do to help your salespeople meet their quotas and increase their overall performance?
In my experience, helping your team meet quotas is often a matter of smart planning, more than anything else. Quota setting should be an active consideration while developing the sales compensation plan, not something addressed only after the plan is set. When you consider how to set quotas only after setting the plan, you run the risk of choosing performance measures for which sales potential is difficult to quantify. In turn, this creates the perception that quotas are arbitrary and don’t accurately reward performance. This will quickly demotivate your sales force, which is bad news for quota attainment.
In order to help your team meet quota, design a sales compensation plan that includes performance measures based on a robust set of historical sales performance and market potential data. This ensures your organization can accurately predict potential and, therefore, set fair quotas.
The second most important task is communicating quotas to sales reps in a timely manner. Many sales organizations make the common mistake of rolling out quotas after the beginning of the quota setting period, leaving salespeople confused as to what goals they are selling against. Instead, strive to clearly define and communicate quotas in a timely manner, helping sales reps understand their targets before they set out to achieve them. The difference in motivation and performance is significant. Imagine a ship sailing out to sea without a map or destination, and a ship that leaves the harbor with a clear route. Which one will make it to its intended port?
Third, measure results regularly and improve quotas by adjusting your goal-setting methodology if necessary. Here are a few metrics to help you keep track of quota “health”:
- Quota attainment distribution
- Percentage of reps above target
- Persistent low/high attainment within certain territories
Also keep an eye on market trends and reevaluate company goals periodically to make sure the sales compensation plan reinforces the right behaviors.
Careful planning, timely communication, and periodical adjustment of quotas are the three most important ways to help your team meet quotas. Here are some other measures to improve team morale and motivation:
- Provide sales training and coaching to help sales reps improve skills and performance;
- Provide continuous feedback so people can adjust their behavior when necessary and can discuss their challenges and concerns;
- Automate processes to reduce administrative burden and give sales reps more selling time. CSO Insights reports that when selling time is above 40%, 64% of salespeople meet quotas, while only 50% do so when selling time is 30% or less.
Demonstrating your support for the sales team in meeting quotas is important for morale, and, in the long term, helps attract and retain top talent and reduce turnover. When more sales reps are meeting quota, it means the organization is successfully executing the sales strategy and achieving corporate goals.
What is your experience with helping sales teams meet quotas? I would love to hear your thoughts on the subject.