Before raising sales quotas, ask this
As Account Executives (AEs) and sales leaders navigate the choppy waters of sales quotas, one of the common concerns is how to increase quotas.
In this episode, we take an in-depth look at the questions and strategies that you need to consider when facing an increase in AE quotas.
Understanding AE Quotas: An Overview
Quotas serve as benchmarks by which a company measures its sales staff’s performance. AEs and sales leaders must align their strategies with these targets to fulfill revenue expectations. However, when these quotas inflate arbitrarily, especially if driven by finance rather than grounded in production reality, the challenge becomes how to handle it effectively.
Essential Questions to Ask When Facing AE Quota Increases
When facing a proposed AE quota increase, embark on a proactive interrogation process. This involves asking a series of questions designed to clarify the reasoning behind the increase and how it can be realistically achieved.
How Many Reps Have Successfully Hit This Number?
This question examines how feasible it is for most reps to achieve the proposed quota increase. If around 40% of your reps have routinely hit a similar quota, it might be achievable. Below 20%, and things look more precarious.
What Support Did Successful Reps Receive?
This question hinges on the concept of deal distribution and the resources made available to successful reps beyond personal aptitudes. Understanding the correlation between deal assistance and quota fulfillment is key.
Where Will the Increased Performance Come From?
With AEs already working hard, asking where the extra performance will come from is vital. Will it result from more deals, a higher win rate, or a hike in average contract values (ACVs)? Responsible sales executives need to explain how increased performance could be sourced without overtaxing the AE.
How Is Deal Distribution Going to Be Managed?
Lastly, the mechanism of deal distribution becomes critical. Will there be an emphasis on self-prospecting, or will there be a more strategic allotment of deals based on their lead quality, reps’ proficiency, and associated conversion rates?
Strategies for Navigating AE Quota Increases
As we examine quota increases, various strategies can help navigate this challenging landscape. These strategies revolve around making changes not just to the quotas but also to the sales process and team management.
Rethinking Deal Distribution: Instead of uniformly dividing the deals among AEs, establishing a more strategic distribution process can be beneficial. This entails feeding your most efficient reps more high-quality, convertible deals, then filling in the rest based on proficiency.
Promoting Efficiency Gains: Rather than obsessing strictly about hitting higher quotas, promoting efficiency gains can yield better results. By ensuring every AE focuses on opportunities they are best suited to close, you may precipitate a rise in overall conversions without increasing quotas.
Advocating For Fair Opportunity and Transparent Metrics: Advancing transparency in quota allocation, rewarding top performers with better deals, and tying distribution to promotion paths can make quota increases more palatable to AEs.