Effective sales quota management aims to establish fair and accurate quotas (and territories). It is an important organizational activity and plays a large part in keeping or losing reps, reducing or increasing overhead, and eliminating or facilitating errors.
Any conversation about sales territories is destined to lean into a conversation about sales quota management, and vice versa. Needless to say, there are a lot of conversations to be had. One of the first questions a sales rep will ask when he or she gets their sales compensation plan is “What’s my quota?” and the second question is likely, “What’s my territory?”
Improving critical activities such as forecasting accurately, empowering management, and providing quota relief all ensure the success of your strategic approach. Here are six tips for sales quota management.
1. Ensure Accurate Forecasting
Traditionally, sales quota setting has been an immensely manual, spreadsheet-based process that takes up precious time for both sales leaders and administrators. The process is further complicated by a lack of data visibility, which hampers sales managements’ ability to make strategic decisions.
With visibility into metrics, such as is available with Xactly Sales Resource Planning & Capacity Management, historic insights allow managers to easily distribute and set quotas—while still maintaining visibility into the overall status of the quota planning process.
2. Give Managers Power to Alter Sales Quotas
Give sales managers the authority to alter sales quotas after they are set. This helps control unforeseen scenarios and also earns quota buy-in from your sales leaders. Quota relief can be crucial, and thoughtfully given quota relief can even result in greater achievement.
It’s also helpful to consider the current climate of the market a rep is selling to. Let’s say there was a major natural disaster in his or her territory. It’s likely that this disaster has legitimately affected their ability to close deals; this is a specific circumstance where relief should be considered.
3. Do Your Territory Homework
Territories shouldn’t be set until you do thorough research. Salespeople should be rewarded for their efforts, not for the area in which they sell. It’s critical to get competitive data about your territories. You can also use a streamlined sales territory management solution to process data from up to 10 different data sources at once, including spreadsheets and ODBC databases.
4. Learn to Handle Territory Disputes
The question isn’t if your reps will dispute the territories you assign them—it’s how you can best handle the issues they might have with their territories. As a sales manager, you’re going to have reps that push back and say things like, “I haven’t gotten any deals there yet, can you give me some leeway with my quota?” Mastering the dispute piece is just one aspect of proper sales territory management.
5. Complete Frequent Check-Ups
Your sales organization needs frequent check-ups to make sure the department is healthy and free from underlying concerns. To perform an effective check-up, examine your sales data. A low percentage of team members meeting quota—or numbers that lag behind your revenue forecast—are considered red flags.
If you do find problems in your monthly quota audits, there are available solutions. Make sure you’re not giving the same percent increase to everyone as this will probably end up costing you. Without equitable and accurate quotas, your sales compensation plan may drive away your best salespeople or uselessly increase your cost of sales.
One way to gain more visibility into the success of your incentive compensation is to automate the process and make it visible to all stakeholders. This way. you won’t have to worry about these kinds of transparency problems.
6. Provide Quota Relief When Necessary
In order to keep sales reps motivated, you must pay attention to setting fair and accurate quotas and territories. Doing this can motivate your team and help you meet your goals. Good data and an automated incentive compensation system can help your sales organization run like a well-oiled machine.
We know it can be challenging to effectively manage sales quotas. Hopefully, these six tips helped you think about some of the many ways you can consider and fine-tune your own incentive compensation program. For more strategic help from Xactly Experts, contact our Strategic Services team.