Founders and sales leaders love to set big hairy audacious goals (BHAGs). You may, in fact, do it every year. When translated to sales quotas, these goals can be inspiring and energizing. They can build a sense of camaraderie and shared purpose.
But, if not set realistically, they can be motivation-crushers for your team.
After all, we’re all human. And quotas that are pulled from the sky (or a random body part) may not be attainable with your current talent base. Your capacity plan needs to be created with both an eye on the prize and a finger on the pulse of what’s realistic for your business.
So, before you set your next quota (or re-forecast your scaling goals), read on….
Quotas are necessary. They give individuals and teams clarity and challenge. Set yourself up for success by finding a balance of challenging and realistic expectations. Start by zooming in on the basis of your quota. The three most common are volume, profit, or activity-based quotas.
Crunching the past and forecasted numbers is helpful, but don’t neglect the human component of the process— your sales team! Think about what’s doable in a day’s work rather than risking burning out your employees as they chase after an unrealistic goal.
Set quotas that will not only be met, but have the chance of being exceeded. When your team succeeds, they will get the morale and confidence boost they need to strive even higher.
An aggressively optimistic quota may seem like a great way to show that you are a go-getter and motivated to boost company performance. Reach for the stars, but get your head out of the clouds. When you miss the target, it’s not only your sales team that will be on the line. Your leadership could also be put into question if wishful thinking and desire are your primary data points.
Unrealistic quotas also result in retention issues. People don’t want to stick around companies with a boiler room vibe. Dissatisfied employees will also take to the Internet and complain, making attracting top talent more challenging.
Once you invest your time in capacity planning and quota-setting, you can set out to hire the types of people who will help you achieve those goals. Professionals will respect the fact that you’ve used data-based processes to set those targets and manage productivity expectations.
The levels and personalities of the people you hire are critical as you translate your goals into action. For example, a new SDR hire fresh out of college will need a certain amount of time to master your product and the market. Factoring that learning time into goal-setting is critical. A seasoned AE, however, may be able to “hit the ground running” and close deals within the first 90 days. Using the right forecasting tools will enable you to not only build a better team but also to see how the human puzzle pieces fit together to achieve goals.
Remember too that sales leaders need support and buy-in from other functional groups within your organization -- marketing, operations, and finance. Make sure your entire leadership team understands the basis for your quotas and is ready to own them as well.
The first step is simply engaging the right people and communicating your goals. It’s important to understand what each person is capable of delivering and what obstacles or challenges may have an impact on performance.
The COVID-19 pandemic has created new challenges and opportunities for sales professionals. You, as a leader, need to understand each individual’s realities and limitations.
When possible, be very clear about expectations for work hours. Ask your team members to put in a full day of work instead of pushing over time, which eats away at profitability. Especially in client-facing sales roles, you need your employees to be on when they’re on… they need time to “turn off” and “unplug”. Giving employees the opportunity to relax and refresh helps them stay productive and more likely to meet sales goals.
These unprecedented times, when combined with aggressive quotas, can produce high levels of stress. Maintaining employee mental health not only builds a positive work culture but minimizes the risk of a team collapse or a mass exodus of employees. Happy, healthy, and rested employees are also likely to be more productive, effective, and stay loyal to your company.
Take the time to create opportunities to celebrate their success -- even remotely.
Beating a previously achieved quota is usually the starting point for a new goal. But don’t just look to historical data to set your figure. Look at your available resources, team, and budget.
Make your team a part of the discussion to give them a sense of ownership over the sales process. Talk to them about what they believe they can accomplish in a workday when factoring in their overall responsibilities and possible roadblocks. Then, delegate the tasks among your team.
Do you have enough of the right people to tackle the tasks you outlined? If not, what does your budget look like? Make sure you are bringing on additional employees or even temporary support for the right reasons at the right time.
Taking all the right leadership steps but missing quota? Not hitting a sales goal can have a huge impact on morale. How you handle it makes a huge difference in employee mood and future performance. Our next article will cover how to manage some of the day-to-day human challenges of setting, exceeding, and sometimes missing quotas.
The BHAGs will never die, but those leaders who base their goals on human talent and capacity have a greater change of achieving them -- year after year.
We’d like to help you set realistic quotas and manage the team to achieve them. Simply click below and schedule a 1:1 to help you learn more.
Onward! 👊
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