There are no moral victories in sales. You win or you lose. There are no style points, silver medals or commissions for outstanding effort. You get paid based on performance. You are considered for promotion based on performance. You are recruited by others because of performance. There is only one number that matters in sales and that’s performance.
Sales has always been driven by numbers. The unrelenting innovation of technology has added even more visibility, transparency and analytics to the already overwhelming amount of reports and data available to sales people, managers and leaders. Big data is already an issue for the enterprise and will soon become a major talking point for sale leaders. Data, dashboards and analytics can capture and report on anything. But when it’s all said and done its performance, quota attainment, that gets rewarded, respected and promoted. Pretty straightforward stuff for the sales person and manager, here’s your quota go make it. It’s when you get to the sales leader that quota attainment tells a deeper, more precise story about the sales organization’s ability to perform and grow.
Black Art of Quota Setting
Quota setting has long been considered a black art. Financial alchemists in dark accounting rooms fabricate, manipulate and calculate quotas for the sales organization that sales leaders promptly over assign it to the field by some percentage. It is meaningless to compare quota attainment between different organizations because of the wide range of quota setting philosophies, strategies and tactics. However, within a single organization, quota setting is fairly consistent on a year over year basis assuming no major executive change.
Connect quota setting consistency with the flat to low, slow growth economy since 2009 and you have the proverbial level playing field. No big economic recovery for all sales people to ride or nasty recession to hide behind. This presents a semi-stable market environment to analyze the performance drivers of the sales organization and how the sales leader’s investments in sales training, operations, enablement and technology are impacting sales performance. Is the sales organization getting better?
Percent of Sales People Achieving Quota
In a flat economy more sales people should be making plan each year if the investments in infrastructure are paying off. Healthy sales organizations grow as their business expands. Healthy sales organizations have people constantly moving up in the organization and continuously bring in new people from the outside. This means a continuous flow of new people and existing people in new roles. Sales leaders must invest in the sales infrastructure to support growth and to improve the performance and productivity of the existing sales organization. Percent of sales people achieving quota becomes the one metric to capture organizational improvement.
Performance Improvement Investments
Behind the quota carrying sales force are the people in sales infrastructure roles. Sales Training focuses on new hires, sales managers and improving the competencies of existing sales people. Sales Operations drives the back office data services, technology and reporting. The now essential Sales Enablement function delivers messages, tools and intelligence into the hands of the sales organization and hopefully on to the customer.
Quantifying investments in these functions is challenging because there are so many factors involved in performance. However, when asked to defend incremental budget requests for sales infrastructure or productivity initiatives, the sales leader who can demonstrate an increasing percentage of sales people making plan as justification for the requests will win.
Nothing is stable is the world of professional selling as markets evolve, products change and competitors adapt. Staying with a legacy strategy is a strategy to fall behind. In this fluid market, if you are not getting better, you’re getting worse. Consequently all sales people and sales organizations must constantly seek to improve their ability to perform. Sales organizations that make targeted investments in their sales infrastructure will see improved performance quantified with more sales people achieving their number. That is the hallmark of great sales leaders, more people making “the number”.