According to an article in INC magazine, "The report found that on average, only about 50 percent of sales reps made their quota, and more than 42 percent of companies reported that less than 50 percent of reps were meeting or exceeding their quota." Feedback I received on this is that the quota is too high. Well, if half the folks can meet quota, is it really too high?
One thing that few understand about quota is that it isn't about being an arbitrary number set by upper management to meet Wall Street numbers. Sales quota should be set during performance reviews via an agreement between the salesperson and management. Why?
If the salesperson thinks the quota is unattainable it becomes negative motivation. As in Goal Setting [see PPT here], the quota should be just outside the comfort zone that the salesperson has to stretch to reach it. Really, you want the salesperson to have to stand on his experience, like a pile of books, to reach quota. Growth only comes when one is uncomfortable.
The other side of the coin on quota is that just looking at results isn't helpful. Last night, the Lightning lost Game 2 against the Bruins. If the coach just looked at the score, how does he know what to tweak, fix, improve, work on to get a better result in the next game? Same thing with sales.
It isn't about results (quota), it's about the daily activities and effort that the salesperson is putting forth to attain quota. It's about habits. It's about follow up, prospecting, needs analysis, referrals, networking, and the rest.
The thing that drives me crazy is when salespeople say, "Don't bother me. It's the end of the month." So? "I have quota to meet!" Oh. So you wait till the 30th to worry about it? Why can't you hit quota by the 20th?
That's the nice thing about being an agent with no direct contracts: No quotas. The quota is "How much do I want to make this month?" How am I going to do that? By daily sales and marketing activities and giving value first to my clients and prospects.