Most sales leaders I meet make this simple mistake when setting quota.
They set individual sales quotas to equal their exact sales budget!
Setting your quotas to hit your budget will always lead to under performance because you have not compensated for the under performers and new hires. And lets face it, all teams have under performers and / or new hires.
Here is the easy way to set individual quotas that will guarantee you will hit your overall budget:
- Assume 60% of your team will hit 100% of quota
- Assume 40% of the team will hit 50% of quota
This quick calculation will lead you to setting quotas that are 20% above your overall target, For example if you have a $10 million revenue target overall, you should build quota to $12,000,000 to mitigate against the risk of people under performing or leaving.
Dedicated to making 2015 your best year yet!