Sales teams are the primary drivers of revenue for any organization be it small-scale or large-scale.

The goal of any company is to make profits while quotas show what each sales representative requires to contribute to meet its short or long-term goals on time.

What is Sales Quota?

For sales teams, quotas act as a benchmark or metric of performance and demonstrate what is expected from the sales team, reps, and sales managers. Undeniably, quotas set the standards for the company’s performance. They are indeed valuable for sales reps who are striving hard towards their goals to grow while working in the organization.

However, the biggest challenge for every sales manager’s mind is how to set a sales quota that will be achievable and powerful enough to raise the bar every year.

Why set an attainable sales quota?

Sales quotas that challenge representatives beyond their strengths and capabilities always result in backfiring. So, it makes sense to set achievable sales quotas instead of challenging ones:

  • Encourages employees to produce higher sales

    According to one such article by Harvard Business Review, some type of goal stretch encourages employees, however, too much of it makes it unachievable too. Apparently, bigger sales goals result in lower sales.

    A pragmatic approach towards the realization of organizational goals makes it easier for sales reps to increase sales, which in turn, makes more money. Organizations need to accept the market reality instead of engaging in wishful thinking.

  • Saves organization’s money

    As per the study by SiriusDecisions, quota assignment is one of the reasons why sales representatives deliberately leave the organization. What happens is that every single time the employee leaves, it costs the company 200% of its yearly salary.

    Thus, if an employer wants to save the organization money, it should make the conscious decision of not considering new hiring until the set sales objectives are achieved.

  • Promotes ethical behavior towards prospective clients

    Studies show that around 5000 employees create thousands of accounts for prospective clients with irrelevant contact details. Because they had thresholds to meet every day as the quota set by management.

    This is actually an unethical practice to perform not just on the part of management but reps too. So, there is a dire need for setting a practical sale quota so employees can form real relationships with their customers and engage in real work.

  • Reps value established sales processes more

    Setting high sales quota motivates reps to neglect work activities like nurturing leads and updating information in their CRM. However, you can improve this situation by using tools that nurture prospective clients and sync sale representatives’ emails and calendar activities.

  • Fairness within the team promotes coordination

    It is of utmost importance to reward the best and high-performing sales reps for meeting their goals within a stipulated time period. Failing to recognize their efforts and setting unattainable quotas actually hurt their motivation to even work in the organization.

  • Improves brand reputation

    Setting an unachievable sales quota affects your brand’s credibility as much as it affects your team. It ultimately makes sales reps close the deal by over-promising the prospective clients.

    Unfortunately, this can hurt your organization’s revenue as well. So, instead of using unprofessional tactics, use the right sales tactics to achieve your sales goals.

  • Creates a positive view of management

    Sales representatives will only be able to accomplish their goals if the management expectations are practical and realistic. If they are given unachievable goals, most likely they would just give up working for those goals.

    Thus, it’s a big responsibility on the part of management to act as a motivating force to get things done from employees, or else it would project a negative view

Conclusion

The above-mentioned are some great reasons to present an achievable sales quota that can help the organization design simple solutions to the complexities of accurate quota setting.

McAlign can help your business to develop a high-performance and rewarding sales quota process that evident through your sales strategies. Let us help you set the metrics right so you can easily lay down performance expectations within the sales team.

  • Praveen R

© McAlign Consulting - 2021