Newsletter Archive - Sales / Marketing
How Many of Your Reps Are Making Quota?
05/16/2010 - I realize this is a discussion that could make some people very uncomfortable. But I have to be honest, the numbers surprised me.
Recently the market research firm CSO Insights released the results of their 16th annual Sales Performance Optimization study. This is an annual survey which I have found can be used as an external barometer for Yellow Pages publishers to compare their teams performance with other businesses, without the concerns of reveling what is most likely considered proprietary information.
The CSO survey covers over 2,800 companies worldwide to understandtheir current level of sales performance, the challenges facing sales teams today, and how companies are effectively dealing with those issues.
The survey discovered that, in 2009, the percentage of reps making quota in 2009 was 51.8%, down from 58.8% in 2008. In thesales oriented business that Yellow Pages is, I would think results like that would be very unsettling for most industry customers. Fortunately, several publisher have whispered that their levels weren't that low, but even at 60 or 70% of reps making quota, that still means there are a number of non-performing reps still on their teams.
The process of establishing normal and reasonable sales quotas can vary greatly, considering the business, industry, type and size of the sales organization, and range of products or services being sold. And no doubt that in this tough economy setting quotas is even more than a real challenge. If the goal is too easy, you pay more than you should and probably get a lower level of performance than you could have expected. On the other side, if you set it too high, your sales reps don't make any money, and they'll be looking for greener pastures. If you pay too much, your cash flow will suffer making your CFO very unhappy. Yet you want to be sure to establish a level that drives the behavior of your sales reps aligned with the company's larger goals.
So what should the expectations of what percent of your team should make quota?? 80% should be able to make quota at any one time?? If it's much higher, there's probably not enough of a stretch. Does that mean that by the end of the year, your bottom 20% of sales reps will be/should be looking for different employment? And should it be measured by campaign, quarterly, or even annually??
So many questions, so many options. Hence, sales management often seems more like an art form than a science.