Setting sales quotas can be a difficult and time consuming process. Despite being one of the most important undertakings in a sales organization, it is often done in haste and without the proper process and communication. The result can be a year full of unhappy sellers, painful administrative work, and last minute adjustments. To mitigate these issues, it’s prudent to build a bottom’s up budget model that will help ensure goals are fairly set and drive sellers towards the most valuable accounts. If you have a CRM tool or other software that can pull historical data and allow for easy account assignments, then you’re halfway there. Whatever tools you use, it’s important to focus on process and communication for this to work.Here are 4 ways to ensure the process works and reduces friction during the sales year:1. Communicate Quota Expectations Upfront:Long before quotas will be set, management knows the high level company quota. Use this as an opportunity to share these expectations with your team - “the company needs to grow by X% so you probably do too” . It’s also a great time to share the process and methodology of how you’ll be allocating quotas. The greater their understanding of the process, the more comfortable they’ll be with their quota. Take your time, use examples to illustrate points, and let them ask questions! 2. Planning/Requirements Gathering: This can seem straightforward, but the devil is in the details. The goal here is to do the actual bottom’s up once (of course you’ll make tweaks to accounts and assignments later). Talk to the major stakeholders before creating the template/model and determine the metrics and views that are most important to them? Build these in to your model and the eventual approval process will be seamless. You’ll want avoid having to do the hard part of this twice. Some common metrics & views that should be easily pulled from the process:
- Year over Year growth by account, seller, team, agency, etc.
- Year over Year growth for a particular list
Questions to keep in mind:
- Are there any guidelines? Minimum YoY growth % per seller
- What is the common ramp-up time for new sellers? Are their goals appropriate for the # of productive months in the time-frame?
- Are there new products with revenue expectations, products being retired?
3. Review: Once the bottom’s up has been generated and you have a solid first-pass, do a deep dive with the stakeholders/approvers. This is where you’ll find the potential issues lurking in the shadows. Things to keep in mind:
- Do all reviews live (in person or video). The conversations that spring out of live meetings are invaluable. No one will examine it critically on their own
- Have many different scenarios available to run so you can tease out potential problems.
- Get approval from each of the stakeholders once all reviews and changes have been made.
4. Communicate Final Quota’s:Once you have approval, it’s time to discuss the quotas with sellers and sales managers. Ideally this is communicated by Sales Management so they own them.
- This is a serious conversation for your team. Take all input and comments seriously and be prepared to delve into the data with them.
- Walk them through their accounts with explanations for items that stand out.
- Provide a worksheet or statement for each employee with the vitals so they have
- a takeaway to reference before letters are handed out / signed.
Set yourself and your team up for a smooth 2019, where time is spent achieving & beating quota, not complaining that it’s unfair or too high!