What is Sales Quota Attainment?
Sales quota attainment is a measure of sales rep performance—specifically, whether they reached their sales target in a given period, or not. So, what does quota attainment mean? To put it simply, if they have reached their goal, they have attained quota. If your sales team has 50% quota attainment, then half of your sales reps have reached their set quotas.
Here's the thing about sales quota attainment—if your reps don't hit their sales goals, you miss the mark on your company objectives. Considering only 69% of enterprises hit their annual revenue goals, and that Salesforce estimates that 57% of reps are expected to miss their quota this year—maintaining high quota attainment is clearly a challenge for many organizations.
Missed quotas not only affect the paychecks of all involved, but can also lead to increased turnover at the company due to the decrease in performance—which can turn into a costly situation for your organization. Taking proactive steps to better the chances of attaining quota is essential to getting reps out of their sales slumps, and back in the groove of stellar sales performance.
When it comes to improving sales quota attainment, you first must ensure that your quota planning is accurate. Even the strongest sales rep will fail to hit a poorly set quota. On the flipside, if reps aren’t motivated to surpass their quotas, they may fail to reach them in the first place.
Understanding Average Sales Quota Attainment
Average sales quota attainment depends on a number of factors—most specifically, your industry. For instance, if a large percentage of quota-carrying SaaS sales representatives are not hitting their goals: 79 percent of sales representatives miss quota and 14 percent never achieve even 10 percent of quota. Regardless of rep tenure, the average quota attainment is 58 percent.
You need to set quotas that motivate and inspire performance and ensure that reps are following best practices to improve their odds of making the sale. To help, here are 10 sales quota attainment tips to improve your team's performance.
Sales Quota Attainment Tips to Improve Performance
1. Avoid the Peanut Butter Spread (in most cases)
According to Xactly Insights™ data, companies that use one-size-fits all quotas across similar sales roles, achieve only a 14 percent quota attainment. Because different roles have different responsibilities, they should be measured on different metrics—and both their quota and incentive plan should reflect that.
However, that being said, a “peanut butter spread” strategy could be preferable under specific business conditions, e.g. startup mode or introducing new products to market.
2. Limit Your Incentive Measures
The number of measures your compensation plan has could be the difference between sales reps failing or succeeding. In fact, Xactly Insights data shows that giving reps too many measures cause confusion and uncertainty. Plans exceeding 3 measures increase complexity while reducing performance:
Number of Measures Sales Quota Attainment (%)
You should aim to make your sales compensation plans less complex to ensure goals are clear and reps have the best chance to meet and exceed their sales quota.
3. Avoid Capping Your Sales Commissions
Incentives drive sales behaviors—we all know this, and we use incentives because they work. Capped commissions are a type of sales commission structure, where incentive payouts max out—and commission rates don't increase once a rep hits their sales attainment quota.
Here's why this can hinder performance. When you reach maximum payout, what is the incentive to continue performing? If sales incentives are reduced after reps meet 120% of quota, you are sending reps a clear signal to stop once that level has been met. Worse, it might send a message to not exert effort selling at all, with reps subconsciously knowing their efforts will eventually be capped.
Ultimately, it's great that reps have hit their number, but when they stop selling because of a capped commission, you're leaving opportunities untouched and money on the table.
4. Remember Your New Hire Ramp Time
New employees in any role aren't able to operate at 100% speed on their first day. They need time to get their bearings and complete the proper training. The same is true for sales reps—they need time to ramp up to full productivity. When setting your sales quotas, you need to consider sales ramp up time and set appropriate quotas for new reps ensuring they can actually reach the quotas.
5. Give Reps Proper Training & Coaching
Did you know that using a variety of sales coaching content can keep sales reps more engaged and ultimately reduce rep turnover? Reps at all levels of experience need the proper training and coaching to ensure they are fully prepared to succeed. Poorly trained reps will not be equipped to achieve their sales quota. Upskill your sales reps with customized training and leading by example.
To ensure reps are properly trained, sales leadership must work together to provide continuous, regular training and managers must coach reps to improve their individual skills.
6. Benchmark Incentives Against Industry Data
Do you know how your sales quotas and incentive plans compare against the rest of your industry? Better yet, do you have the insights to identify if your plan has too many measures or other changes you can make to optimize performance?
Benchmarking against industry pay and performance data allows you to catch potential flaws in your plans and make changes to improve. It also ensures that you are paying reps competitively—which is crucial to retain top performers.
7. Take Rep Tenure into Consideration
In a recent study of Xactly Insights data, an interesting trend emerged. Reps reach their peak performance 2-3 years into a role, however, at the 5-year mark, performance trends often decline.
This is important information to consider when designing your quotas. Can you hold a rep to the same level of expectations 8 months into a role as those who have 3 years or even more experience under their belt? Understanding performance trends can help you map quotas more effectively and ensure each rep is set up to hit their quota—regardless of tenure. Looks to reduce sales rep turnover with incentives and a clear development path.
8. Balance Your Sales Territories
Your sales territories and quotas must be closely aligned in order to hit your revenue goals. In fact, unbalanced territories can wreak havoc across your entire sales organization. You already know that sales reps think the grass is greener in somebody else's territory, but do you know if your territories are capturing opportunity equally?
The best way to ensure your territories are balanced is through automated territory planning, such as Xactly Alignstar™. In fact, a recent study with the Sales Management Association found that enterprises using automated technology to map their territories can see up to 30% higher sales quota attainment!
9. Control Revenue Spiking by Spreading out Measurement Periods
Replace your current quota attainment periods with monthly or year-to-date quota periods. Let’s say, for the sake of easy math, that a sales rep has a yearly quota of $1.2 million. The quota for each month is $100,000, with a goal of reaching $100,000 by the end of January, $200,000 by the end of February, etc. Good accelerators are offered for every dollar above year-to-date quota.
In this scenario, there is plenty of incentive for the sales rep to meet and exceed the monthly quotas.Researchers behind a study at Stanford University used a mathematical formula to plot patterns in sales for several reps. They found that the distances to quota had a significant influence on the sales profile, specifically concluding that sales increased as sales agents got closer to quota.
10. Embrace Sales Planning Automation
Let's cut to the chase—easier sales planning and improved quota attainment aren't feasible with manual planning processes. Your sales plan—including your capacity plan, quotas, and territory design—are the foundation of your strategy to achieve your annual goals. If this plan isn't optimized to drive top performance, you will never see the results you want to.
In fact, Xactly Sales Planning™ automation does more than make sales planning easier. Ultimately, automation helps you:
- Identify and reduce 10% of gap errors
- Improve quota attainment more than 10%
- Reduce planning time up to 25%
If you need more convincing, check out this blog on the benefits of automation for sales organizations.
Taking Your Sales Quota Attainment to the Next Level
The ability to consistently reach sales quotas is dependent on a number of things, but rep tenure is not one of them. More specifically:
- On average 15 percent of sales representatives who were in their roles for at least one year reach quota, and 5 percent didn’t achieve even 10 percent of quota.
- Similarly, on average 16 percent of sales representatives in their role less than one year reach quota, and 19 percent didn’t achieve even 10 percent of quota.
With all of this, if reps are failing to hit quota, don’t just look at their sales skills and processes. Look at the quotas being set and ensure the plans and guidelines in place are motivating performance, and not extinguishing it. And of course, attaining quota is one thing, but ensuring quotas align with comp plans and overall company objectives is key to sales effectiveness.
Learn more about how you can increase sales rep retention in your organization in our guide, "Unleash Your Sales Team’s Full Potential with Data."