I’m over it

Overassign occurs when the summation of individual quotas exceeds the overall forecast objective. It is a ‘cushion’ to help manage unexpected events such as customer changes, product issues, or attrition. However, there is no standard definition of what elements are exactly covered by overassign, for example some companies exclude attrition from the overassign amount.

I’m under it

Underassign (the opposite of overassign) is used to give specific salespeople lower quotas to protect them against unreasonable quotas due to their circumstances. It is where sales leaders do not fully allocate the goal/quota (carrying a quota that is more than the aggregate of the team under them). Sales leaders or sales managers could be given a larger quota than their team in anticipation of team growth after the point of quota setting; it would incentivize the leader or manager to recruit talent or land new deals to achieve their larger quota. We would normally do this if quotas are high, or we have a small number of huge deals that we wait to allocate to specific people, or we expect strong incremental headcount hiring.

Risks with overassign

• Sellers often challenge overassign if they feel the amount is too aggressive. However, as overassign is used to build the sales quotas, no adjustments can be made. Overassign is a mechanism to protect the business and the sales team from missing targets.
• Blanket overassinment levels that are set high and assume top sellers hit their quota: this usually means second or third tier performers will get frustrated and leave. The revenue gap is expected to be made up by the top sellers; this results in higher attrition risk of top talent.

What level of overassign?

It is more typical in SaaS vs. consumption based models to have 10% or 15% overassign. Most enterprise software companies run in the 20% range. Over 70% of sales managers overassign and many use over-assignment levels that exceed 20%.

Typical overassign ranges

Considerations on the level of appropriate overassign

• 5% over-assignment means all sales people’s quotas add up to 105% of the business plan revenue target. This is not really de-risking the sales quota; for example, in a small salesforce this could be one deal not landing or one person attriting.
• Whereas 15% overassign works well if building atop a productivity model that assumes a normal degree of sales turnover (and ramp) and are thus using over-assignment simply to handle non-attainment (as opposed to using overassign to deal with sales turnover)
• 25%+ overassign would handle both attrition risk and sales achievement risk, which is why the majority of companies set overassign around this level.

Consultancy rating 2/5