What is a sales quota?
A sales quota is a measurable goal a seller or a team must hit in a set period, such as a month, a quarter or a year. Most quotas count revenue or deals closed; some count activities such as calls and meetings. Managers usually set them so that, if every seller hits theirs, the company hits its sales target.
Sales quota · Also: Quota
What types of sales quota are there?
Salesforce lists five.
- Activity quota. The number of actions, such as cold calls, emails sent and meetings scheduled.
- Profit quota. Profit, meaning sales revenue after selling expenses.
- Forecast quota. Set from past sales and market conditions.
- Volume quota. The total number of units a seller sells.
- Combination quota. More than one of the above at once.
How do you turn a quota into a plan?
Work backward from the number.
- Deals you need = your quota divided by your average deal size.
- Held meetings you need = deals you need divided by your win rate from first meeting to won deal.
- Meetings a month = that number divided by the months in the period.
Example: an annual quota of $600,000 with an average deal of $20,000 needs 30 deals. At a win rate of 25% from held meeting to won deal, that is 120 held meetings, or 10 a month. The pipeline calculator does this math with your own numbers.
Quota vs pipeline coverage
The quota is the target. Pipeline coverage tells you whether the deals you are working today are enough to reach it.
Sources
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