Mapping a Road to Success
Success rarely happens by accident. It starts with clearly defined goals. For example, if you want to feel better physically, you’ll map out steps to get there. You might eat more veggies, find ways to move your body more, and drink plenty of water each day.
Goals must be realistic to be effective. Consider the goal of moving your body more. If you jump from a sedentary lifestyle to two hours of daily exercise, you’ll feel burned out in no time. And you’re more likely to quit before you see results.
Goals in sales can work the same way. As a sales manager, you set your team’s numeric goals—also known as sales quotas—so you want to make sure they’re realistic.
In this lesson, you’ll learn what a sales quota is, explore common types of quotas, and see what can happen if you set unrealistic targets. You’ll then get four tips for setting sales goals that are achievable, yet also motivating and challenging.
Watch this video to learn about sales quotas and discover how to set realistic targets for your team.
What Is a Sales Quota?
A sales quota is a numeric target that a sales manager sets for a particular rep, team, or territory. Examples of sales quotas include: “Make 60 calls per day to qualified leads.” and “Generate R50,000 in revenue each month.”
Sales quotas are time-bound, meaning they must be achieved within a specific time period—that could be daily or annually, or something in between. You can measure sales quotas in several different ways, such as products sold, sales activities completed, or profits generated.
Flip the cards below for examples of common types of sales quotas.
The Benefits of Sales Quotas
Now that we’ve covered some common types of sales quotas, we need to understand how creating realistic quotas can benefit sales teams.
Expand the rows below to learn four areas in which sales quotas can be useful:
Measuring Progress and Success
Without clear goals, knowing what success looks like—or if your team’s on track to achieving it—can be difficult. Quotas arm you with data that communicates progress to your team and up the leadership chain.
Uncovering Weaknesses
On the flip side, quotas can also reveal weaknesses in your team and your sales process. For example, if you have one rep who struggles to meet their quotas, you know some extra coaching may be in order. Or, if all your reps are missing a particular quota, then you may need to look for issues with your sales process.
Clear, concise subjects
Knowing your team’s strengths and weaknesses allows you to maximise opportunities that otherwise may slip under the radar. For instance, if your sales reps are crushing their quotas in a particular region or demographic group, you can set higher targets—or even direct more resources to those areas to meet the demand.
Identifying Opportunities
Keep your emails short and sweet. Clients are busy people, so they don’t have time to read long emails. Keep your emails short and to the point.
Mark Twain (supposedly) once said, “I didn’t have time to write you a short letter, so I wrote you a long one.”
Motivating Your Team
Finally, since salespeople tend to be goal-oriented, they need ways to measure success. If they can’t do that, they may lose momentum and enthusiasm. Quotas, when implemented carefully, can create a culture of healthy competition, inspiring better performance and higher sales numbers.
“It seems to me, though, that the people who get things done, who lead, who grow and who make an impact … those people have goals.”
– Seth Godin
The Risks of Setting Unrealistic Sales Quotas
While setting sales quotas for your team can have real benefits, these quotas only work well when they’re realistic. Unattainable targets can damage your team’s morale, motivation, and performance by:
- Demotivating your reps. If a salesperson fails time and again to meet their quota—and watches their teammates do the same—they may stop giving their all. Instead, they may just try to stay on par with average team performance.
- Encouraging unethical behaviour. If a rep suspects they won’t meet a quota—but is desperate to do so—they may resort to unethical behaviour. For example, they may inflate their numbers, mislead prospects, or use overly aggressive tactics to close more deals.
- Decreasing performance. Performing well when you’re under excessive pressure is tough. Unrealistic quotas pile on the stress—which can paradoxically lower your reps’ success rate.
- Increasing turnover. Unrealistic quotas may even make a salesperson quit. If your reps feel like they can’t achieve success in their current environment, they’ll look for opportunities elsewhere.
Summary
Goal-setting is a critical part of your role as a sales manager. But these goals will only be effective if they’re realistic. Otherwise, you risk demotivating your reps, prompting unethical behaviours, decreasing performance, and increasing turnover. To understand what “realistic” means for your team:
- Look at historical data to understand your team’s sales trends.
- Work backward to determine what steps it would take to achieve a target.
- Evaluate how many “selling hours” your reps actually have.
Equipped with these insights, you can set achievable quotas that will motivate and challenge your team—not overwhelm or hinder them.
- Set goals as a team. Before carving your quotas in stone, consider looping your sales reps into the process. They can offer additional insights on what’s realistic and what truly motivates them. Also, sales reps who have buy-in will be more likely to hold themselves accountable. Once you set those realistic targets, the next step is to
Once you set those realistic targets, the next step is to make sure you’re hitting your goals. In the next lesson, you’ll learn how to do that with sales forecasting.
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