If you're a sales leader, ensuring your team of sales reps meet their quota goals is paramount to success. Are you reps where they need to be? Are they in step with the industry standard for quota attainment? Based on Xactly Insights' 13 years of cross-company data, industry best practice tells us that 75 percent of the sales team should be reaching their quota numbers.
We've leveraged Insights data to detail five components you should focus on if you want your sales team to successfully meet quotas.
1. Avoid the "Peanut Butter Spread" Strategy
According to Xactly Insights, companies that evenly spread quotas across similar roles, achieve only 14 percent quota attainment. Although a “peanut butter spread” strategy could be preferable under specific business conditions—e.g. startup mode or introducing new products to market—it is best practice to be deliberate and specific with your quota assignments. Sales resource planning and capacity management is critical to eliminating guesswork in quota, scenario, and territory planning.
2. More Measures, More Problems
The number of measures your compensation plan has could be the difference between sales reps hitting or missing their numbers. In fact, research states that giving reps too many measures causes confusion and uncertainty. Plans exceeding three measures increase complexity while reducing performance. According to our Insights data, including three measures or less in your comp plan will inspire the highest quota attainment for reps. In the case of comp plans, simplicity does increase the chances for success.
3. Loyalty (to Your Reps) Does Pay
Does tenure affect performance? The quick answer: yes. While you may already know this, you may not have been aware of how vital the length of tenure can be to maximizing sales rep performance. Xactly Insights’ research reports an incremental improvement in quota attainment the longer a rep stays at a company. The problem, then, becomes many organizations using the “peanut bread spread” strategy give new sales reps the same quotas as those who been around over a year. Blanket quotas like these set up your latest team members for failure. While every business case will have its particular nuances, it pays in the case of new reps to ramp them up to the standards of veterans in the organization.
4. Technology is Your New Best Friend
How is your organization managing quotas? Homegrown solutions? ERP Software? Spreadsheets? According to Xactly Insights, 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 Xactly Incent™. 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 see and understand where their assigned quotas 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. Inspire Your Reps
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. These Xactly Inspire tools are like your own virtual performance consultant, letting you know exactly what education– from content to training or instructor-led training–your reps need. All these educational approaches feed into sales success. And sales success can often come down to one factor: confidence. With effective education, you can build that confidence in reps to enable them to hit quotas—taking B-grade performers to A status.
To learn how Xactly Insight™ sales performance benchmarking data can set up your sales team for success, or to learn more about our entire sales performance management solution line, schedule a demo today.