Sales

Setting Quotas versus Attainment

Everyone wants to hit (or exceed) their goals.

Founders commit to scaling (and sometimes selling) their businesses.
Board members and investors need to know that their well-researched bets will pay off rapidly.
Sales leaders want to achieve success and build their careers.
AEs, SDRs, and BDRs dream of earning their payouts and feel the satisfaction of success
Entire companies rely on leaders and sales professionals to make and surpass quotas, so everyone can keep their jobs and enjoy that wonderful feeling that comes from working for a successful company.

But, when quotas are misguided, market conditions change abruptly, or a company simply doesn’t have the right people in the right jobs (or enough of the right talent), goals aren’t met. Morale suffers. Stress increases. Talented people get frustrated and leave. Board members and investors growl and mutter. Founders lose nights of sleep.

In short, the environment is no good for everyone.

As we detailed in our last article you must:

Recruit the right talent
Know your employees’ limits
Clearly and properly assign roles and quotas
Encourage collaboration and communication between sales leaders and other co-dependent groups— like marketing, finance, and operations
Celebrate successes

Great Leaders Plan for Missed Quotas

Why would you set a goal if you think you might not hit it? The reality is that market conditions, changes in prospect’s businesses, unanticipated competitive moves, and internal business fails can sometimes lead to missed sales. Even at an individual level, a salesperson may be having issues that impact productivity and results.

Having a contingency plan is important. Here are some other steps leaders can take to allow for the failure to attain quotas.

Be honest. Create a culture in which people are not fearful to speak up when they face challenges. You want every person to seek out the training and guidance they need. If you’re a first-time founder, don’t be afraid to admit what you don’t know. Seek out the resources and tools you need to succeed.
Investigate the source of the shortfall - and again be honest with yourself and others. Do the missed goals stem from a product problem? Do a few sales people require more training and motivation? Did you set unrealistic goals? Dissect the issue and be prepared to take fast action. This is also where having a deep and meaningful knowledge of each team member can be critically important. If someone had personal issues one month or took a much-needed vacation, you need to plan for the circumstances in advance. When sudden issues arise, encourage the rest of the team to pitch in or bring on temporary help. The faster you respond to unanticipated situations, the greater your chance of hitting your targets.
Watch your language. Words like “failure” and “missed” are accurate in a business sense, but you want to build an environment where your team doesn’t feel like a bunch of losers. Even saying something as simple as “We are within 15% of our goal...how can we fill the gap?” is way more uplifting and inclusive than “We are only at 85% of goal. That’s a big miss.”
Work the problem - inclusively. A missed quota has an impact on the entire company, not just sales. Challenges also present opportunities for teams to work together on creative new ideas. At some companies, senior executives team-up with salespeople to call on clients and help carry the proverbial ball over the finish line.
Always have a back-up plan. Massive cutbacks in marketing or staffing are a last resort but have that “haircut plan” in your back pocket. Look to smaller and significant steps you can take to compensate for shortfalls.

Attainment is a Big Deal...Crushing Quotas is an Even Bigger One

Of course you know that meeting your quotas can simply be viewed as doing your jobs. But behind every sale is a tremendous amount of hard work and resilience. When your team hits quota, the reward shouldn’t be 20% higher quotas the following month.

That said, make sure you’re setting goals that are ambitious and slightly difficult to hit.

When individuals or teams exceed quotas, make sure they get public acknowledgement, motivation, and rewards that are meaningful to the individuals themselves.

The sure-fire way to attain quotas is to use a robust and reliable system to set your goals, combined with the right hiring technique, plus basic human understanding of what motivates every team member.

Then, you as a founder or sales professional need to lead and inspire that group -- every day of the week -- to success.

When that success is achieved, make a big deal out of it. Celebrate personal and team wins and make sure people know you appreciate their efforts.

Like a sports team, you may not go to the finals every year, but you want each contributor to know their role, motivate and support their team mates, and learn from the game tapes when they miss points.