Breaking Down Your Sales Quota For Success In a Complex Solution Environment

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Every salesperson in every industry understands at the beginning of the calendar or fiscal year they will receive a new quota. Typically these quotas go up and not down year after year. It is then incumbent on the salesperson to break down the quota and devise a plan to achieve the quota in the quarterly and annual timeframe given.

Revenue Planning

Usually, the sales leadership team requires each salesperson to present their quarterly or annual plan and help them understand how the goal will be achieved. One of the common mistakes made by salespeople is assuming they will close all of the business with the accounts they have listed on the annual quota plan.

I don’t care how good of a salesperson you happen to be, nobody has a 100% close rate. This common mistake really exposes the lack of planning that goes into quota achievement by salespeople. Each salesperson has various close rates based on many factors including type of industry, complexity of sales cycle and structure of revenue recognition. This should be taken into consideration when salespeople plan for revenue. If you have a 6.0 million dollar quota and a historical close rate of 47% the minimum top of funnel goal should 12.5 to 14 million if you ever hope to achieve quota.

It is also paramount to understand how your company recognizes quota achievement. Is it based on booked sales or delivered sales. Meaning does the carryover from quarter to quarter or year to year count towards this years plan or next years plan. This changes to planning process tremendously and takes into account sales cycle time and delivery time.

Delivery Alignment

This is an absolutely critical phase of the sales planning and execution process. First and foremost you need to be 100% sure the delivery teams can deliver all that you plan to close this year. If they cannot delivery, then the revenue planning needs to adjusted based on delivery throughput.

Another important step for delivery alignment is getting buy-in from the delivery leadership on what projects they will focus on. The delivery teams have core competencies and areas they are the strongest in. Knowing and understanding the strengths of the delivery team allows you the salesperson to align your efforts for maximum success.

Break down the annual quota based on project type and size. Whats this means is the salesperson(s) should sit down and work out what projects are best with delivery. At the end of this process the salesperson and the delivery team has a clear understanding of what will be focused on. The results of this planning will say we need X number of A type projects, X number of B type projects and so on. This process helps keep everybody in lock step and prevents the creation of animosity between sales and delivery.

Account Type and Focus 

The most important resource a salesperson has is time, and time lost you will never get back. This requires the salesperson to plan which accounts they will go after and why. Put simply, if you have a 6 million dollar quota and you are chasing 20K deals the likelihood of you reaching quota is nil even if you worked 24 hours a day.

The sales cycle is the same for a 50K deal as a 800K deal, what will you focus on? This type of discipline requires the salesperson to be selective and focused on what to go after. Look across your industry and find the accounts that have multiple opportunities for growth and expansion.  Call it land and expand or prove and move, find those accounts where you can establish credibility and deliver value early. Do this again and again with select accounts and your quota will be easier to achieve. 

It is also a fact that an existing customer is easier to up-sell than an entirely new client each and every time.  You build a relationship based on value with select accounts and you begin to build momentum which rewards you and the company with steady revenue.

Salespeople are opportunist at heart and it is very hard for them to say no to a client that is willing the spend money. This is especially true when the company offers accelerators to the sales team for revenue generation over quota. This is where the planning, delivery alignment and account focus discipline comes into play in a big way.

Building Momentum

As mentioned before, when you plan well, have delivery alignment and are focused on the right accounts the revenue generation is magical. The natural byproduct of this focus and delivering value is the freight train momentum you create along the way. You will have a stable full of extremely satisfied clients, positive reviews and recommendations that will ultimately result in clients seeking you out.

Meeting and exceeding quota is not as hard as it seems IF it is approached in a thoughtful and strategic manner. 

My next post will be focused on the science of target planning, building buyer profiles and personas to allow you to reach your MVA (Minimum Viable Audience)

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