Setting up a strategy is a crucial part of every company or business. A growing corporation depends on a proactive sales team to offer great sales volume and hit revenue goals. One of the tricks to keeping a sales force inspired is to come up with sales quotas for the sales representatives.
According to the research done, around 53% of sales representatives could meet their quotas. A sales quota is a group of goals set by sales managers for a unique period. Sales quotas can be for a specific number of products purchased by the customers or can be revenue-oriented. Sales leaders assign the sales quotas to a sales crew or individual sales representatives.
The Top 5 Types of Sales Quotas
Sales leaders create a wide range of quotas to inspire workers in the process of sales.
1. Volume quota: This is a sales quota that rewards sales representatives for the number of transactions done or qualified prospects they target.
2. Revenue quotas: This is a kind of sales quota that rewards gross revenue. If a crew member makes a sale in a specific time frame but the sale comes up with massive revenue, the sales representative can still meet the terms of the leader’s sales quota.
3. Profit quota: A profit quota is similar to a revenue quota. A profit quota calculates the gross revenue and then deducts selling expenses. This helps the sales reps to work efficiently in their sales meetings and calls.
4. Activity quotas: This is a kind of quota that rewards a volume of activity, like requiring a specific number of telephone calls as well as different tasks in a client relationship management system
5. Combination quota: This is a type of quota that combines dozens of sales metrics to award different types of success in the pipeline of sales.
The Way to Set Your Sales Quota
Align the quota with the standards of your company.
Before coming up with your sales quota, you should refer to the historical information and performance of your business and the sales crew. How many profits did the business make previously? What’s the level of productivity of your sales representatives? What’s the stronghold of your sales team? Based on your business standards and the resources that are available, you should come up with a framework and create quotas for teams and individuals for your company.
Be prepared for any changes in the market
A company can be affected by external and internal activities. Changes in preferences and market trends can affect your company. You should stay focused on the sales quota and make sure it has not been affected majorly by the market changes.
Calculate the past sales quotas
Sales quotas are set based on their performances. You must extract the information for the last two to three quarters and compare them.
Examine your company’s target carefully
You should identify the barriers that prevent your company from achieving the sales quota.
Communicate your goals
When you are working with groups of people in a company, you should let them know the goals of the company. With proper communication, your team will be able to achieve the quotas faster and without difficulties.
Great Strategies to Achieve Sales Quotas
1. Create a long-term strategy
Sales reps who want to succeed in their quotas can come up with a long-term plan. During your planning, think about vacation, quarter-endings, and the months when the company’s sales can go up. This plan will help you to be consistent.
2. Do thorough research
Explore well. Know the ins and outs of your buyers and the industry they belong to. Instead of selling your products to the same customers, go out and look for more. We recommend you talk to individuals from different industries and see whether your service or product can suit them.
3. Make use of tools and technology.
With the use of technologies and tools like Convin and Conversation Intelligence, achieving sales quotas has become easy. Since employees began working remotely, leaders are implementing virtual sales strategies for their crews.
The Advantages of a Sales Quota for Your Company
Levels up the performance of your company
One of the key reasons for coming up with a sales quota is to create a performance boost. Sales leaders know the potential of their sales reps. Coming up with sales quotas can motivate reps to work diligently towards the attainment of the company’s targets.
Visualize the sales strategy
Sales leaders are responsible for coming up with the sales quotas for their crew. The corporation’s growth is measured by the sales quotas.
It gives you a guideline
A sales quota ensures that the sales group remains on the right avenue when working for the company. This way, your sales team knows which service or product to prioritize and can easily get the sale.
Sure-fire Tips for a Sales Quota
Let’s look at the sales tips that will assist every company and organization that has a diligent sales crew.
You should not talk about past quotas
Plans that worked in previous years may not work in the coming years. There are changes in the markets, profits vary, internal sales reps change; the industry is dynamic, etc. You should learn from the past. Analyze the success ratio and mistakes too. Decide on the sales methodologies that will work for you and those that won’t.
Quotas should be deliberated with the teams
The leaders of a company should discuss their plans, blueprints, and strategies with their sales reps. The managers should not just come up with policies and implement them without any discussion.
Quotas should be achievable
The quotas should be realistic and achievable. Different companies set unachievable and bigger plans for their sales teams that cannot be achieved. This can demotivate the workers in a company.
Methods for Setting Sales Quotas
There are two main methods for setting sales quotas in a company. These are the top-down approach and the bottom-up approach.
Top-down approach to sales quotas
In the top-down approach, the business needs to set a quota for the whole period and assign the quotas to the representatives to attain the main goal. This method determines the main sales quota and is bifurcated further.
Bottom-up Approach for Sales Quotas
You should determine the quotas based on the representatives and how they performed in your last quarter. As the leader or manager of a company, you should find out how many sales your representatives closed and how much profit they generated.
What is the difference between a sales quota, a sales target, and a sales goal?
A sales quota is time-bound and is determined by whether the team or representative has achieved it or not. A sale goal is long-term. If you own an insurance company, the major aim of the company would be to bring more insured customers to the company. A sales target is a series of small tasks and activities that are done to accomplish a sales quota and have an effect on the bigger sales goal.
Research says that hitting the goals of sales quotas is challenging at times. Boost the sales activities and track the sales performance to help you achieve the quotas faster. The sales reps should be motivated by the managers of the company to hit the goals easily.