What is Quota Attainment?
Quota attainment is a measure of sales rep performance. Specifically, whether they reached their sales target in a given period, or not.
Simply, if they have reached their goal, they have attained quota, or, if your sales team has 50% quota attainment, then half have reached their set quotas.
So, where does that definition take us? Well, picture this. You're witnessing a slow sales month, and quota attainment for a few of your reps is in jeopardy. The hot leads have simmered, and the calls have quieted. It’s a lousy position to be in, and you’re left telling yourself “it’s just this month.” But if one month of low numbers starts turning into an overall slow quarter, you’re going to have bigger problems.
These losses not only affect the paychecks of all involved, but also can lead to increased turnover at the company due to the decrease in performance. 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 quota attainment, you first must be sure that you’re setting an appropriate quota. Even the best sales rep will fail to hit an outlandish quota. On the flipside, if reps aren’t motivated to surpass their quotas, they may fail to reach them in the first place.
What is Average Quota Attainment?
Of course, it depends on a number of factors, with one of the biggest being industry. For instance, 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, according to this study. Across the entire SaaS data set the average quota attainment is 58 percent. The data remained consistent regardless of tenure. (More on improving your SaaS sales compensation plan here.)
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. Following are 13 top tips to achieve both.
Quota Attainment Tips
1. Avoid the peanut butter spread (in most cases).
Using Xactly Insights™ data, it can be seen that companies which evenly spread quotas across similar roles, achieve only a 14 percent quota attainment. That said, a “peanut butter spread” strategy could be preferable under specific business conditions, e.g. startup mode or introducing new products to market.
2. Communicate the fact that no lead is too small.
Pushing aside small sales opportunities can be more detrimental than you might expect. If reps are experiencing a downturn, these smaller leads and opportunities can get them one step closer to making quota, and can serve as confidence boosters when they’re in a slump. Plus, you never know who knows who, and what kind of referrals might come up from a simple conversation.
3. Limit your measures.
The number of measures your compensation plan has could be the difference between sales reps failing or succeeding. In fact, research supports the understanding that giving reps too many measures cause confusion and uncertainty. Plans exceeding 3 measures increase complexity while reducing performance. Here’s the data showing how the number of measures impact quota attainment: 1-3 obtained 61.70%, 3-5 obtained 14.90%, and 5-7 obtained 6.40%.
4. Embrace technology.
Using the Xactly Insights database, it was determined that the top two technologies for managing quota settings are: Excel with 94.8% usage and third-party software with 26% usage. These numbers are somewhat surprising since Excel comes with significant limitations compared to third party software like the Xactly Incent™ sales performance management solution.
From the behavioral side of things, spreadsheets don’t facilitate enough transparency to curtail time-wasting activities like shadow accounting among reps. Sales teams need to understand where the numbers come from, and they also need to believe the goal is attainable. Third-party software makes quotas and progress easily viewable, in real-time, from mobile devices—keeping performance top-of-mind.
5. Encourage reps to follow-up with prospects, within reason.
Checking in after initial calls is crucial for sales progression and closing deals. While many reps might in fact be doing so, there’s always the possibility that they aren’t following up at the right times, or perhaps, not doing so tactfully. Embrace the available tools to estimate the optimum time for calls based on tried and true industry research, and make sure your sales training doesn’t gloss over this important activity (view additional sales training ideas).
6. Make sure reps are properly preparing for their calls.
Before calling leads, successful reps thoroughly prepare for calls. No questions asked. Researching the company along with the lead’s name and position is the bare minimum. Proper training can also help reps figure out what information is needed to form a quality relationship with their prospects, which in turn, will help calls run smoothly. In fact, did you know that effective coaching practices can increase quota attainment by 20%?
7. If reps must oversell as a tactic, make sure they deliver.
Over-promising is a common technique that might work in certain situations, but when it doesn’t, it can really leave a nasty mark. Thus, reps should avoid overselling unless the chances of them delivering are greatly in their favor. A few too many oversells gone wrong can tarnish their reputation and negatively affect their current and long-term standing with customers.
As a quick aside, while our goal here is to help reps improve baseline quota attainment, it’s also important to consider the benefits of providing incentives for reps to reach even higher.
Are reps pushed to shoot for more than 100% of quota? If not, they may not see any need to continually improve their sales performance. That’s a detriment to their long-term personal growth, and, it might hamper them from reaching quota should it be increased at any time.
Also, if reps aren’t motivated to surpass their quotas, they’ll naturally slow as they approach the 100% mark. They might even slow too much at some point, and before you know it, a deal falls through and they end up short when all is said and done.
Alternatively, if reps are motivated to shoot for 120%, you can expect that figure to become the new 100% in their minds. So, while they’ll push to hit that new goal, if they don’t reach it, there’s a good chance that they still met their original quota in the process.
With those benefits in mind, here are some additional tips for surpassing quota.
8. Change the mindset that attaining quota is good enough; push for more than 100%.
A goal is simply a number, and not an indicator that there aren’t sales left to be closed. If your organization experiences a drop in performance after quotas are met, you’re leaving sales on the table, just as you would if quotas weren’t met in the first place.
9. Avoid “sticker shock” by setting quotas at levels that won’t reduce sales performance.
If you set quotas unrealistically high, reps might feel discouraged, and give up before they even get started. Use historical data to determine attainable goals, and then set stretch goals that can still realistically be met with additional effort.
10. Make the chase worth it—you have to motivate sales reps to “jump higher” and perform beyond quota.
When the rep weighs the cost (effort) against the benefit (compensation), compensation must be structured so the benefit emerges the clear winner. Better incentives, better behavior. Choosing the right incentives and the right rewards is critical for success. So if you’re a sales manager whose team is having trouble hitting their numbers, it may be time to take a look at your incentive plan. Perhaps it’s not even a question of jumping “higher”—maybe reps aren’t motivated to jump at all.
11. Don’t cap your plan—your compensation plan must drive the behavior you seek.
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.
12. Aim to inspire.
Churn and quota attainment are intimately linked. Reps that meet 100% quota attainment only have a 7% churn potential. But what causes churn in the first place? Inadequate training, coaching, and professional development are the primary reason sales reps leave. It’s important to understand that reps want to learn, want to do better.
This isn’t a question of motivation, but of implementing the right education.Sales reps need effective coaching. Third-party technology, such as Xactly Inspire™, can help facilitate this need with tools that spreadsheets or other compensation software just can’t offer. Xactly Inspire simplifies sales coaching to help reps improve and ramp up faster.And with only 42% of companies claiming they’re effective in this regard, it makes sense for sales leaders to leverage all the tools available.
13. 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.
To end, as mentioned above, new reps or experienced reps; tenure doesn't matter (as discovered in the SaaS Incentive Compensation Benchmark Report),
- On average 15 percent of sales representatives who were in their roles for at least one year made 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 made 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 to their sales skills and processes. Look at the quotas being set and ensure the plans and guidelines in place are motiving 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.
According to a CSO Insights Sales Compensation & Performance Management Study, an effective sales compensation plan can increase the number of people beating quota. Something to think about as you move forward. Best of luck!
Updated with additional tips and stats 6/13/17