Setting Achievable Sales Quotas

Here’s an example of a simple formula I use to reverse engineer my quota. Step 1: Start with your annual target → Break it down by quarter and month. Step 2: Apply pipeline coverage → Based on your average win rate (let’s say it's about 30%), you’ll need 3-4x pipeline coverage. → Example: If your target is $1M, you’ll need about $3M in active pipeline. Step 3: Know your average deal size & sales cycle → Let’s say your average deal size is $50K and your sales cycle is about 65 days. That gives you a sense of how many deals you need and when you need to start working them. Step 4: Do the math → $1M ÷ $50K = 20 deals needed → 20 ÷ 30% win rate = about 67 qualified opps → Divide that by months and quarters to set activity targets → Example: about 6 closed-won deals per month = about 20 opps in pipeline per month at a 30% close rate. Step 5: Adjust early → Run this every quarter (or month). Don’t wait until Q4 to do the math. This takes the guesswork out of quota. If you’re a rep and haven’t done this math yet, I highly suggest doing it today. It will change how you plan, how you prospect, and how confident you feel going into every quarter. If you’re a leader, please teach this! It’s one of the best ways to set your team up to win before the scoreboard even starts.

Bad goal setting can cripple your business (I know from firsthand experience). Here's how to set goals that propel your business forward. Step 1: Analyze last year’s performance. You can’t set the right goals without the correct information. So, take some time to gather data from the previous year to find areas of strength and weakness. Look at your: Revenue streams — what are your most profitable areas? Your biggest cost centers? Sales & marketing — can you spot trends in customer acquisition or marketing ROI? Operations — where is your business bottlenecked? Where might you be overstaffed? Employee performance — look at productivity and churn. Which direction are things going? — Step 2: Brainstorm areas for improvement. Write down all the possible things you could work on. This is a great group activity for your leadership team or even the whole company (depending on your size). The data you’ve collected in step 1 should give you some idea of opportunity areas. One tip: don’t discount an idea just because it’s hard. Often the biggest impact things are hard to do. But you should be realistic about the effort required to get something done, and its chances of success. — Step 3: Set SMART goals Specific: Define clear and precise goals. Instead of saying "increase sales," say "increase sales by 12% in the next 6 months." Measurable: Ensure each goal has quantifiable metrics. E.g. "Reduce customer acquisition costs by 15% by the end of the year." Achievable: Set realistic goals based on your resources, budget and other constraints. E.g. if you have limited cash, avoid goals that would severely impact your monthly cash flow. Relevant: Align goals with your overall business objectives. Ensure they address the key areas for improvement identified earlier. Time-bound: Set deadlines for each goal. E.g. "launch a new service by Q3." — Step 4: Develop an Action Plan For each goal, create an action plan that outlines: Steps and Milestones: Break down each goal into smaller, manageable tasks. Set milestones to track progress. Resources: Identify the resources needed (time, money, personnel) and ensure they are available. Responsibilities: Assign tasks to specific employees. Ensure everyone understands their role and what is expected of them. Timeline: Establish a timeline with deadlines for each task and milestone. Doubling down on one point there: always assign tasks to a single person. They can still bring in other people to contribute, but it’s one person’s responsibility to get it across the finish line. — Step 5: Monitor and Adjust Goals are not static. Regularly check your progress, and adjust based on new insights or changing circumstances. Schedule monthly and/or quarterly reviews to keep everything on track. Having a simple KPI tracker is a good way to keep tabs on things. Make sure you’re regularly checking in, and ask people to flag any roadblocks or necessary adjustments as soon as they identify them.

One of my biggest mistakes while running PlanGrid was not paying enough attention to sales operations, particularly around quota planning and territory assignments.  Our quota overassignment revolved around 40%, from the front-line reps all the way up to the head of sales.  In other words, we assigned 40% more street quota than our actual company revenue target.  Even though we hit our aggressive triple-digit growth goals during those years, we weren’t able to generate the pipeline needed for every rep to succeed.  As a result, many sales reps consistently missed their targets, leading to high turnover. My board taught me to focus obsessively on financial metrics like magic number, NDR, gross margin, churn, which are all important.  But these metrics offer an incomplete view of the business, as they’re far removed from the day-to-day reality and culture of the customer facing organization. Hindsight is 20/20.  In 2016–2018, most of our sales team wasn't hitting quota, even though the head of sales and company did.  That’s a broken model.  A small percentage of top performers carried the team, while the majority of the team struggled to hit their OTE.  Many reps weren’t making enough to support their families.  Naturally, they self-selected out.  That attrition came at a high cost: we lost tribal knowledge, had to spend time and resources recruiting replacements, and then had to ramp new hires from scratch. If I could timewarp back to 2015, when our first sales reps joined, here’s what I would do differently: 1. Limit Quota Overassignment (low single digits) This would place more responsibility on managers to help their teams succeed and align the full organization around achievable goals. 2. Ensure Equitable Territories With a land-and-expand business, new reps without a renewal base had no realistic shot at hitting their OTE in year one.  If we had allowed managers to participate in territory planning and fairly distribute accounts, we could have better retained talent and improved team wide performance. Transparency is key.  It would have relieved a lot of disputes about account assignments. 3. Adjust Quotas in Down Years No one enjoys hitting only 70% of quota, regardless of the number.  People don’t wake up aiming to do a C-minus job.  In years when the majority of the team was significantly below target, we should have reduced quotas to protect morale and performance. Our HR team estimated that it cost about $7,000 to hire a sales or marketing employee, and $10,000 per engineering hire (just for sourcing, process, and interviews).  Attrition is expensive. Note: these benchmarks are from the mid 2010s. 4. Ask Better Questions A few critical questions to revisit regularly: "How do we raise the bar without breaking the team?" "Who carries the weight, reps, managers, or leaders?" and “Does our compensation reflect that?” "Which segments do we double down on, and where do we shift territories to maximize growth.”

It’s mid-February 2026, busy setting targets and quotas and trying to keep the excitement of “this is our year” alive with the sales team! Quotas feel tougher than ever. Sales cycles are becoming longer. Buyers and Customers are squeezing every rand and demanding clear ROI before even scheduling a demo or getting a proposal. Account Managers are juggling new AI tools, drowning in admin, and burning out fast. This sound familiar to all of you? I’ve been leading IT sales teams for more than 20 years through uncertain times, setting targets that looked aggressive on paper but realistic . The truth is, the old playbook of “just add 15-20% YoY and go” isn’t cutting it anymore. What actually moves the needle right now: 1. Data over gut feel — Review 2025 honestly before locking in 2026 numbers. What % of pipeline actually converted? Where did we lose deals ?Use that to build capacity-based quotas, not just top-down wishes from management. 2. Territory & account realism — Uneven territories kill morale and forecasts. We’re seeing better results when we balance by true potential. We also factor in ramp time for new hires, and are align tightly with marketing on plays and messages to market. 3. AI as a co-pilot, not magic — Tools are helping with forecasting signals and deal health and white space opportunities. 4. Protect your sales team . Burnout is the silent quota killer. Account Managers spending time on non-selling tasks can’t hit numbers hard. Simplifying processes, better coaching and transparent compensation plans make a massive difference. We’re not going back to easy buying cycles anytime soon. I believe the organizations that treat target-setting as a cross-functional, data driven strategy will pull ahead this year. What’s one thing you’re changing in your 2026 target setting process , if any? #SalesLeadership #ITSales #Salestargets #Quotas #iworkforaltron

Yesterday a CEO asked me how to get his salespeople to hit quota. My first question was how many reps are hitting quota today? His answer... none My second question was how did you set the quota? His answer... it's 5x their OTE My third question was how did you set the OTE? His answer... it's the industry average --- Ok, let me break this down... - You don't have a quota if no one is hitting it - You don't have an OTE if no one is earning it - You don't have a business if nothing is working A business is not an industry average or statistic; it's a one-of-a-kind entity made up of unique people, products, and data. Your job as the leader is to understand the minute details of each of those 3 categories and build an employment, revenue, and customer satisfaction engine that's scalable and profitable. To do this you must let go of "industry averages" and focus on YOUR DATA. - Set quotas that the majority of salespeople can hit - Set on target earnings that are competitive yet profitable When you build a winning and thriving company, you don't need every data point to match identically to the industry averages. You should have your own unique structure for everything. Some details may be below the industry average and some may be above. Your strengths make up for your weaknesses when you follow this model. Maybe your OTE is lower than the "average" but your reps are employed 3x the average tenure. Maybe your quota is lower than the "average" but your reps are averaging 120% attainment. Stop trying to replicate whatever data you're finding in ChatGPT or some legacy playbook. Start learning YOUR BUSINESS and build a company that has an actual sense of individuality rooted in REALITY. This is how you get your salespeople to hit quota. It's not rocket science... it's called building a revenue organization.

Top Down revenue planning is how a lot of CROs/VP Sales end up building a plan that looks great in a board deck and falls apart in execution. It usually starts like this. “We need 5x ARR growth.” Not because the market says it is realistic. Because it sounds best in class. Let’s run through a simple example (all fictional numbers). 1) Revenue plan Grow 5x from £5m to £25m ARR Because that is what the board expects. 2) Capacity plan AE quota is £150k per quarter So you need 33 AEs That assumes zero underperformance, zero ramp time, and no attrition. 3) Pipeline creation plan Win rate is 15% ACV is £40k So each AE needs 25 deals per quarter That is where the cracks start showing. The problems with this approach First, market size. Do you even have enough good fit accounts to support that target? Second, pipeline creation. Is that deal volume anywhere near what your team can generate today? Third, hiring becomes the whole strategy. The plan only works if you hire fast and every new rep ramps quickly and hits quota. Top down planning is useful for one thing. It tells you what needs to be true. But it cannot be the only plan. The fix: build a bottom up plan alongside it Start with what is real and measurable. How many accounts are actually in your TAM? How many of those are likely to buy (your real serviceable market)? How much pipeline have you created in the last two quarters? Where did it come from and what was the quality? What is the current win rate? What is the current ACV? Now you can calculate the gap between current reality and the target. And more importantly, you can decide what to do about it: Assess if the target is genuinely achievable Spot the funnel bottlenecks you can improve to close the gap Align the business on what is achievable vs what is simply desirable If your revenue plan depends on perfect hiring and perfect execution, it is not a plan. It is hope with a spreadsheet.

Setting up SDR quota models that actually work needs to be a 𝘀𝗰𝗶𝗲𝗻𝗰𝗲. Too many companies are treating it like an 𝗮𝗿𝘁. Before you even set the numbers, the model itself needs to walk a fine line - keeping SDRs motivated, rewarding the right behaviors, tying everyone to business outcomes, and staying precise but not complex. However, there's a foundational discrepancy happening - while most SDRs are targeted on meetings, opportunities or a mix of both: 💰 Some are looking to target on the revenue size of the pipeline SDRs are generating 🎯 Some are looking to target on closed-won revenue 📉 While the research shows that sales development models might actually be regressing (with a clear pivot from fully qualified opportunities to semi-qualified opportunities and introductory meetings over the last 2 years). That is a lot of competing, and contradictory, information, and after designing and testing multiple models which have included ALL of the above, I can tell you there's no one-size-fits-all solution. However, there is a robust approach you can take to identify the sweet spot for YOUR business: ✅ A 𝟳𝟬% 𝗯𝗮𝘀𝗲  (research-proven sweet spot) ✅ A 𝟯𝟬% 𝘃𝗮𝗿𝗶𝗮𝗯𝗹𝗲 (tied to 𝟮-𝟯 𝗲𝗹𝗲𝗺𝗲𝗻𝘁𝘀 and no more than that) ✅ Accelerators/decelerators based on business needs ✅ Targeted bonuses for pre-identified and pre-determined outcomes that matter. And those elements? Well, they depend on your business, and need to be aligned with your Sales stakeholders, but will mostly be composed of: 📅 Meetings 🚪 Opportunities ⏳ Late-Stages Progression (if you have a long sales cycle) OR 🎯 Closed/Won The result of a properly-designed SDR quota model? 𝗦𝗗𝗥𝘀 𝘄𝗵𝗼 𝗮𝗿𝗲 𝗺𝗼𝘁𝗶𝘃𝗮𝘁𝗲𝗱, 𝗳𝗼𝗰𝘂𝘀𝗲𝗱 𝗼𝗻 𝘁𝗵𝗲 𝗿𝗶𝗴𝗵𝘁 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗼𝘂𝘁𝗰𝗼𝗺𝗲𝘀, 𝗮𝗻𝗱 𝗽𝗿𝗼𝗽𝗲𝗿𝗹𝘆 𝗮𝗹𝗶𝗴𝗻𝗲𝗱 𝘄𝗶𝘁𝗵 𝗸𝗲𝘆 𝘀𝘁𝗮𝗸𝗲𝗵𝗼𝗹𝗱𝗲𝗿𝘀 𝘀𝘂𝗰𝗵 𝗮𝘀 𝗦𝗮𝗹𝗲𝘀. 𝗣𝗦 A handy hint - think long and hard about compensating on the revenue size of pipeline; message me if you want details... 𝗣𝗣𝗦 If you have 6+ elements in your model running the entire funnel from activity to closed-won, something is broken somewhere; message me if you want help... #salesdevelopment #sdr #quotas #compensation #revops #b2bsales

You can waste years of your career in med sales pursuing the wrong goals. I’ve been in the industry for more than 6 years, and I learned the hard way that if your only goal is to hit the target given to you by your company, you’re making a big mistake. A mistake that can deprive you of long-term motivation, fulfillment, and huge growth. Your quota is just an arbitrary number imposed on you by your company, and it's usually framed in the context of making more revenue for the company and more money for yourself. This approach does not consider whether you believe this number is reasonable, whether it resonates with your vision, or the big why behind the mere numbers. You deserve to be driven by more worthy pursuits. Here's what to do instead: Let’s say your quota for Q1 is 500k $. Step 1: You need to logically and carefully inspect this number; Is it reasonable and achievable? Is it impossible to achieve? Or, is it noticeably lower than the current potential of your territory? You need to buy into the goal you set for yourself; → If the goal is too easy, you’ll feel lethargic and bored, → If it’s too hard you’ll feel anxious and discouraged. → Your goal should be challenging yet tractable. This is the optimum state. If it’s too easy, set a higher goal for yourself; a goal that you believe is more reasonable and a bit challenging to give yourself the motivation to grow. Let’s say it’s 650k. If the proposed quota is unreasonably high, you need to discuss it with your manager or whoever is responsible. Share logical rationale and reasons for why this is not achievable, and propose a specific number that would be more reasonable. If your company never listens and you keep getting unreasonable quotas that you can never achieve, Start looking elsewhere! Until you find another company, your goal is to hit the reasonable number you set for yourself. Your goals should be your own choice not just imposed on you, and you must feel in congruence with the pursuit of achieving this target. Step 2: Set aside any financial rewards you might get, and ask yourself; Why do you want to achieve this goal? Is it about serving patients? Is it about personal and professional growth? Is it about having a bigger impact and a feeling of significance? Or is it about your desire to connect with more people and build meaningful relationships? When you have this clarity and this new framing of the reason for striving to achieve this goal, → You’ll be more motivated, → You’ll derive greater satisfaction, → You’ll be more driven and passionate, → and you’ll be more likely to achieve this goal. Can you see the difference between: "my company set a target for me to sell 500k" and "I want to sell 650k$ worth of my device/medicine to help patients and to challenge myself to achieve this feat and grow my impact" This is the simple process to make your goals meaningful, motivating, and aligned with your values. ♻️ Share or repost if you like it.

Actively supporting 50+ Amazon businesses that generate $100M+ annually taught me why most growth goals fail—and how to set ones that actually work.   Here are 4 lessons I've had from supporting so many business owners:   Lesson 1️⃣: You can't fight seasonality. One client wanted to maintain 300% summer growth through winter. When search volume drops 60% and conversions tank, no amount of ad spend saves you, in fact it will likely kill your profits. Make sure to use YoY data to respect market cycles, don't fight them.   Lesson 2️⃣: Fantasy goals kill team morale "6-figure month-over-month growth" (with no catalog expansion or spend increase) would be considered a fantasy goal. When owners set impossible targets, teams tune out. We've seen it repeatedly—unrealistic goals don't motivate, they demotivate.   Lesson 3️⃣: Growth requires process change Want different results? Pick a path: Path A: Lower margin %, higher spend, more profit dollars Path B: Launch products, capture new markets Standing still while expecting growth is magical thinking.   Lesson 4️⃣: Check your actual MoM growth rate. Growing 15% monthly? Set goals at 20-25%, not 200%. Stretch goals based on real data rally teams.   Strong realistic goals pushed our clients further in one year than fantasy goals do in three.   The formula: Respect seasonality + Set achievable targets + Change your process + Base goals on actual data = Sustainable growth your team believes in. #Amazon #ecommerce #digitalmarketing #goals

Your SKO just ended. The team is fired up. The quotas are announced. You're in your hotel room doing the math. It doesn't work. The quota math assumes accounts that don't exist. Leadership set quotas at $1M per AE. 30 AEs = $30M in new revenue. Map it back to accounts: → You need 600 new logos at $50K ACV → Your SOM has 15K accounts total → You closed 200 last year → That's 1.3% of your addressable market This year you need 600 out of the remaining 14.8K. That's 4% conversion of your entire remaining SOM. Last year you converted at 1.8%. The quota assumes you'll more than double market penetration without changing account selection, routing, or sales motion. The territory assignments ignore propensity. You divided your SOM into 6 territories by account count: → Territory 1: 2,500 accounts → Territory 2: 2,500 accounts → Territory 3: 2,500 accounts But you didn't grade them first. Territory 1 has 400 Grade A accounts. Territory 3 has 90 Grade A accounts. Same quota for both. By Q2, Territory 3's rep is burned out chasing garbage while Territory 1's rep is at 80% of quota. The growth assumptions ignore actual funnel metrics. Your plan: "We'll improve sales efficiency by 30%." How? Better account fit? Better propensity scoring? Better sales execution? "We'll just close faster" isn't a strategy. If you haven't mapped what's broken (fit scores, propensity models, conversion rates by grade), you can't claim 30% efficiency gains. The capacity model assumes perfect execution. Your plan assumes: → 8 conversations per AE per day → 20 selling days per month → 50% meeting show rate → 15% opp conversion Last year's actuals: → 5 conversations per day → 16 selling days (after meetings, admin, travel) → 38% show rate → 11% conversion Your FY plan assumed away a 40% productivity gap. What happens next: Option 1: Hope it works out. Run the playbook. Watch the forecast deteriorate. Option 2: Fix the foundation. Week 1-2: Map true SOM by territory Week 3-4: Score by fit + propensity Week 5-6: Rebalance by expected value Week 7-8: Adjust quotas by Grade A distribution Week 9+: Route with precision Teams that do this in February: 90%+ of plan. Teams that wait until May: 60% of plan. Your SKO just ended. Execute the plan as announced, or fix the foundation?