MARKETING

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  • Building a Sales Team

    Game Plan

    In-Depth

    Creating Sales Quotas

    Sales quotas are simply goals that help your sales team understand what’s expected of them. It’s you, however, who needs to set those expectations. Quotas may not always be based on total sales, but on other important metrics, such as number of appointments set up or additional sales to existing customers.

    Setting quotas, and rewards for attaining those quotas, can be a complex process. It’s important that quotas be specific, aligned to a defined timeline, measurable, and clearly communicated to your sales team.

    New salespeople shouldn’t be expected to meet your standard quotas when initially hired. You can set a less aggressive quota for the first month or two and then gradually ramp it up to the point where it matches expectations for the rest of your sales team.

    Also consider your business patterns. If, for example, you run a seasonally oriented business, your quotas should be more flexible to reflect the impact of seasonality.

    If you set quotas that aren’t generally being met, you’ll need to either adjust your expectations or consider giving your sales team better sales tools. This can include improved promotional tools such as introductory emails and brochures, access to better customer relationship management (CRM) software, or additional training in product benefits.

    And as you monitor sales against quotas, ask your sales team for their own suggestions on how they can improve their performance.

    Game PlanGame Plan

    Game Plan

    • Evaluate your business goals so you can set quotas based on objectives.
    • Be sure to set specific expectations and timelines—and clearly communicate these expectations to your sales team.
    • Monitor performance regularly so you can adjust quotas or give your sales team access to improved sales tools.
    • Review this Sales & Marketing Executives International article on four ways to set quotas.
    • Read this PDF report from the Sales Leadership Forum on the "Art and Science of Quota Setting." Interviews with some leading sales executives begin on page 17 of the report.
    • Review this article from Selling Power on the "Tough Truth about Quotas" for additional insights on how to set up more effective quotas.