Purpose of Quota Setting

Provide Direction

• Provides a salesperson objectives: what products to sell, what clients to approach and a dollar value

Align Motivation

• Goals that are too high or not aligned with potential are demotivating
• Goals that are too low lead to high attainment and contribute to work slow-down after achievement

Manage Performance

• Accurate goals help companies better identify the best sales reps
• Align costs with performance
• Avoid the ‘halo effect’ resulting from random successes

The quota setting typical process is top down, with bottom-up input from the field

• Quota totals generally must equal the forecast, but over-assignment is common
• Bottom-up input is more qualitative than qualitative (intuition driven)
• Hierarchies are in place before goals are cascaded and rarely adjusted, contributing to quota misallocation
• Processes differ by business unit, geography and role and are rarely documented
• The most common quota management tool is Excel gSheets :)....but you should really use planning tool

Top-Down & Bottom-Up Approaches

What should a mature target setting team look out for?

• Forecast science vs. false science