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Here is the wrong way to set quotas



Take revenue goal, add 10% and divide by # of sellers. Here is a better way.


We recommend to at least consider size of the territory, key metrics and selling time. Using these will align quota to # of accounts assigned and performance conditions. It will also give you a definitive way to show the rep they can achieve the goal, and how to do it. Most importantly, performance can be tracked over time to course correct as needed.


In other words, they will be set up for success.


Here are the inputs needed;

🔷 # of accounts from the ICP that are likely to purchase each year

🔷 Average deal size (can be for expansion or new logo as appropriate)

🔷 Conversion rates from # of needed closed won deals to accounts assigned

🔷 % of selling time

🔷 Average hours to work a deal through each stage from closed own to assigned account


With simple math, you can now determine if the rep has enough accounts in the territory and enough selling time to hit the quota. In other words, you can gauge the risk involved and what needs to happen to achieve success.


Certainly, many other nuances and assumptions may need to be taken for your business. However, that will not change the need to align quota to accounts, leverage selling time, average deal size and conversion metrics.


If you would like a calculator using these inputs, leave a comment below and DM me.


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