For Jerry Maguire to get to “Show me the money,” he went through many ups and downs in his sales game. But he took it head on and, with a little sales coaching help, crossed the finish line to hit his infamous sales quota and earn a name for himself.
You may be nodding along; it’s perfectly relatable. But reality has changed substantially as technology, and digital platforms take over the sales cycle.
It’s no more as easy as picking up the phone or dropping into a customer’s office for a quick sale. Some significant changes that make selling more complex than ever include:
- Sales cycles have gotten longer owing to a shift in buyer-seller interactions on digital platforms. In 2021, 52% of buyers experienced a longer sales cycle for new vendors while 35% felt the same for existing vendors, as compared to previous years.
- The buyer is no longer an individual but a group. It takes multiple discussions with various stakeholders to make a purchase decision. 94% of sellers sell to a group of three or more buyers.
As hitting those sales quota attainment rates gets more challenging, reps also fall behind on their win rates. Lower win rates mean fewer deals closed, and fewer deals closed eventually lead to the result no sales organization wants to see – low revenue.
So, how can you Jerry Maguire your way out of missing sales quota attainment? Let’s find out in this blog.
What’s a Sales Quota?
Sales quota is a quantitative goal that sales reps have to achieve in a given period, be it a month, quarter, year, or more. Quotas help leaders and reps establish a clear expectation of sales success during that period.
For reps, sales quota also determines how much they get compensated for their performance relative to the company’s benefit. And therefore, sales quota attainment is crucial for individual and organizational growth.
Here are 6 types of sales quotas:
It’s the exact financial amount that each rep has to bring in and is most commonly used.
Volume quotas determine the number of units a rep must sell to keep the company’s inventory rotating.
This quota rewards reps for the activities they undertake to complete a sale—for example, cold emails, phone calls, and scheduled meetings.
It focuses on the number of resources taken to close a deal, getting the most value without going over budget.
Forecast quota uses past sales data to set goals for the current period and is used when a company has consistent seasonal trends over several years.
A combination quota blends two or more quotas to meet goals for multi-perspective analysis.
Why Sales Teams Need a Sales Quota
Not assigning sales quotas to reps is like shooting arrows in the dark. After all, the selling process is the most crucial buyer-seller interaction and drives business revenue.
Most importantly, sales quotas help –
1. Remove Ambiguity & Set Standards
Sales quotas act as a sales success benchmark, giving reps a clear outline of their responsibilities. For organizations, quotas help set company-wide standards for the high levels you aspire to gain.
2. Ensure Fair Compensation
Well-defined sales quotas give you an accurate representation of the work going into prospecting and improving conversion rates. They let you assign fair compensation to reps and track the commission paid.
3. Boost Morale
Demotivation among sales reps can lead to attrition, increasing hiring costs, and losing competitive advantage. Hitting sales quotas gives your reps a sense of accomplishment and the confidence to take on more.
Are you doing all of this, yet your sales reps are struggling to achieve their quotas? Here’s what could be going wrong.
Why is your Sales Quota Attainment Slipping?
In 2021, only 24% of sales reps exceeded their quotas.
Thanks to technological advancement, organizations are adding new tools to their sales tech stack to address this problem. Despite the efforts, sales quota attainment rates are traveling downward.
Let’s find out why.
1. Ineffective coaching
You may have spent a lot of time and money crafting an excellent onboarding (training) program. But when it comes to the real world, reps must be ready to face the music – song and dance et al. That’s where a continuous learning (coaching) approach comes in handy.
At other times, your business may not have centralized training. Maybe you trust individual managers to train their teams as they see fit. The problem with this is each group will work differently; there’ll be no cohesive approach to closing deals, and some reps may miss out on key information.
Your managers may also not have complete visibility of leading indicators for setting up the right coaching process. These could be understanding multiple buyer personas, the number and value of pipeline opportunities, lack of follow-ups, inconsistent customer satisfaction, and low open or response rates.
2. No clarity on deals
You’ve invested in an excellent tool for recording CRM data, but that’s just what it does. Can your reps leverage this data? If they can’t, it becomes challenging for a rep to figure out why exactly a deal went south and what they could have done better.
In this scenario, managers are responsible for steering their team to success. But it’s equally difficult to coach for more positive outcomes when you don’t have qualitative insights.
Another growing problem is pipeline management. Sometimes, sales reps are wary of letting go of opportunities, even though they’re not viable anymore. And when pipelines have had too much to eat, they bloat. Bloated pipelines give skewed insights, wasting your time and resources while overshadowing good deals.
3. Time lost on non-selling tasks
Close to 82% of top-performing sales reps spend four hours and up on actual sales-related activities. But this isn’t the case for all.
Reps engaging in tasks that don’t directly impact their goals end up missing their quota attainment. The struggle is real because it leads to a dip in productivity. In fact, only 18% of salespeople find their job outstanding.
It only causes further problems when they want to leave. Turnover is a growing challenge and has increased by as much as 39% in the latter half of 2021. Ultimately, turnover leads to revenue leakage because deals aren’t closed, and prospects move on.
4. Reliance on siloed data & poor team alignment
There are multiple sales products in the digital market today. But most offer single-point solutions. For example, sales training and CRM aren’t part of the same solution. Investing in multiple products is expensive, not to mention a strain on your organizational tech stack and challenging for reps to learn each one.
The result? Complete sales readiness is out the window.
Some CRM solutions offer data storage options but don’t clean up dirty data. That becomes a major problem when 44% of organizations have annually lost an estimated 10% of revenue, courtesy of bad data. Understandably, you don’t want to be one of them.
Dirty data impacts personalization, pipeline opportunities, decision-making, and productivity. Moreover, siloed CRM data for each department worsens the problem by disrupting goal alignment and making one team’s data impractical for the other.
5. Wrong metrics for measuring success
As much as 30% of high-performing RevOps organizations struggle to track success accurately.
Generally, leaders and managers monitor adoption and engagement metrics, such as how many customers a rep reached out to. But that’s only one part of a much larger picture.
They miss out on more qualitative metrics, such as an individual rep’s performance in line with the business’ Ideal Rep Profile (IRP). Managers may also not track sales data from conversations with prospects because of a lack thereof.
Improve Sales Quota Attainment for Your Reps
You could have a Friday night party celebrating sales success or, even better, take your reps on an all-expenses paid trip to the local resort. But these short-term incentives will only boost their confidence momentarily.
For consistent sales performance, you need to tie back sales quotas to the rep’s and organization’s goals.
Here’s what you can do.
1. Use technology that your reps love
Data is a goldmine for sales organizations to assess performance and patterns from lost or won deals and lock down target accounts. Sales intelligence tools have in-depth insights into reps’ performance in the field, giving leaders better information on improvement areas.
Now, more than ever, organizations need tools to onboard, coach, and manage reps performance. Sales tools are built to help with this, but reps need more time to sell, and less on learning new technologies. In fact, 76% of organizations say they miss sales quotas owing to poor adoption of sales tools. What makes it worse, companies lose money when reps don’t hit quota attainment and also when they’ve purchased tools which are poorly used.
Nektar is a solution free from clunky plugins and manual intervention. Therefore, it’s easy to implement, doesn’t need adoption from reps and delivers business critical insights which adds tremendous value to your pipeline, quickly.
Managers also benefit from a one-stop solution as they can monitor interactions between reps and buyers, understand the factors contributing to a successful deal, and continually drive more success by coaching reps.
Reps can use the data to find what buyers seek most and communicate value to them. They learn to speak the prospect’s language and provide value beyond just selling the product. When reps are empowered to communicate value over product features, they can sell better and improve win rates.
2. Review sales processes to simplify complex approaches
Sales processes can make or break a deal, primarily driving how a rep approaches the prospect and takes the conversation forward.
But selling is getting more complicated. Buyers are becoming more knowledgeable with easy access to online resources and, as such, prefer digital mediums to make a purchase. 83% of buyers turn to order and pay via digital commerce.
Most sales teams are familiar with the top-bottom and bottom-top approaches to setting sales quotas. What works more effectively is a combination of both – having goals set at the organizational level and individual and blending them for success.
It also gives managers a wider perspective of sales processes to identify flaws and help sellers improve. These flaws or bottlenecks limit sales progress and could be anything – lack of resources, manager inaccessibility, excess time on low-impact activities, and delays in approvals, among others.
Sales intelligence data is invaluable here.
Solutions like Nektar use automated data capture to look at your pipeline, identify bottlenecks, and figure out why you’re losing deals and what’s working. Leaders can simplify complicated approaches, where reps dedicate more time to key sales tasks.
3. Dive deeper into consumer behaviour
Why is consumer behavior in the picture when you should be concentrating on your sales quota attainment? Because the better reps understand your customers, the better they can leverage those insights to close deals successfully.
So, set up your Ideal Customer Profile (ICP) and dig deeper into buyer behaviour.
Let’s start with this. Nearly half of the working population born after 1977 are 65 years or older. It means that millennial buyers are more active on the scene; they’re the ones who grew up with Google Search and social media. And therefore, they’re more comfortable with technology and digital buying; 54% of millennial B2B buyers increasingly prefer a rep-free buying experience.
You stand to lose a lot if your reps don’t have this information and aren’t reaching out to buyers on multiple digital channels. For example, they can start with email, follow up with the prospect the first time via a phone call or reach out on LinkedIn.
Another challenge you could face is filling up the sales pipeline with viable opportunities. To do this, reps must focus on lead generation and prospecting by setting up a consistent framework for studying customer needs and pain points.
Nektar automatically captures data for prospects across multiple channels. Your reps don’t have to scour the corners of the internet for prospect information and update the CRM constantly.
4. Personalize sales quotas for better overall performance
One thing humans are known for is being unique.
Every rep has different capabilities, capacities, and levels of experience. Apply that to your team and set individual goals for each rep instead of taking the total sales team quota and dividing it equally.
For example, a sales rep with one year of experience can sell less than a pro with seven years of experience. If you have an overall target of US$ 100,000, don’t give each rep US$ 50,000. Give a higher sales quota to the more experienced rep for better attainment.
Similarly, if you consider activities, some reps are good at cold emailing while others are better at cold calling. You can personalize sales quotas based on their abilities.
Amidst this, keep the focus on setting realistic quotas. Anything low will seem like an underachievement, and anything too high will discourage reps. Play to each rep’s strengths for better sales success.
5. Track relevant metrics for teams and individuals
IRP is a key factor you’ll have to keep going back to set up relevant metrics and track the right KPIs in line with your company’s needs. But don’t just set your analysis upon individual performance; it’s the team that achieves the overall sales quota attainment.
Besides sales metrics like win rates, conversions, and sales cycle time, managers can also track data from conversations with prospects on calls or virtual meetings and measure training success on the field. This data could include email responses and average time per call.
Now that you have sales metrics out of the way, set pipeline metrics for a more positive impact on viable and valuable opportunities. You could track the rate of activities, rate of follow-ups, number of open opportunities, stage-to-stage conversion, and opportunity to win rate.
6. Identify coaching needs and bridge the gap
The difference between training and coaching is that training is the initial onboarding and where most managers stop. The reasons are multiple, including insufficient data or poor data that doesn’t shed any light on development areas.
Continued coaching is essential for keeping reps motivated and helping them hit sales quota attainment. Coaching becomes much more simplified with an automated solution like Nektar, which shares deep insights on reps’ performance, tracks sales data, and gives you complete visibility.
Reps also need clear direction on organizational sales processes. Multiple managers setting up their training makes it ambiguous for sellers. It’s best to standardize the training process so that new and old sales reps receive consistent information.
From there, managers can coach reps with tailored content for individual strengths and weaknesses. Sales organizations are already considering this seriously. 80% of companies invest more in content and systems that support sales, including guided selling, playbooks, recommendations, real-time scripting, and chatbots.
Overcome the Sales Quota Attainment Gap with Automation
To consistently hit your sales quota attainment goals, you need to continually track sales performance and improve it by acting on the insights for shortcomings, strengths, potential opportunities, and potential risks.
An automated data capture solution like Nektar does this for you. It uncovers data from multiple sources to overcome significant sales problems – low rep productivity and morale, dirty data, tracking wrong metrics, siloed departments, missing customer insights, lack of coaching, and more.
More importantly, deploy tools that boost your tech stack, ensuring it works for your reps and encourages them to do their jobs well. The icing on the cake is that these tools also give your revenue operations teams a unified view of the pipeline and encourage cooperation.
Lastly, value your clients more than the quota to make sales successful. Counterintuitive? Not really. Empower your reps with everything they need to understand buyers, so they’re ready to serve the customers with the best solutions and help these customers win.
Want to hit your sales goals consistently?