Quota attainment can get confusing quickly. It’s simple concept, but:
- Do you mean percent of reps at 100% of their quota or above some lower bar? Board members bark rules like, “we should shoot for 80% of our reps at 100% of quota,” almost hearing the unspoken words, “because that’s what we did back in the day at GreatCo.” How much of that is nostalgia I’m not sure, but here in the real world, I almost never see 80% at 100% [1]. In fact, getting to 80% at 80% is actually quite an achievement.
- Do you mean on a quarterly or annual basis? The telltale of a dilettante is when asked they reply: ”uh, well, we need 80% at 100% on a quarterly basis.” In my enterprise B2B world, that literally never happens. Getting to 80% at 100% on an annual basis is nearly impossible. On a quarterly basis, it’s absolutely impossible. See this post, and the spreadsheet at the end of it, to demonstrate this point quite tangibly [2].
- Do you mean productivity or quota? Quota is the target we assign to reps. Productivity is what we expect them to actually sell. Many people build a quota model and then subtract a cushion to get productivity. I prefer to build a productivity model [3] and then uplift to quota. Note that both the thickness and layer-by-layer allocation of that cushion is an important sales culture issue. But, back to our main point: when you say 80% or 100%, my question is: of what? [4]
- Do you mean rep-by-rep achievement or overall realization of assigned quota? Most people mean rep-by-rep. But it’s also quite interesting to view realization as professional services teams do. If we model a consultant to bill 2,000 hours per year at a list price of $200/hour, they should bill $400,000 per year. If, due to beach time, discounts, and rework, they end up billing $300,000, we would say their realization is 75%. We realized only 75% of their theoretical billings. By analogy, we can say that if we assign $10M in street-level quota [5] and sell $7.5M that we realized 75% of our assigned quota.
In short, there’s enough potential for confusion here that I recommend three things:
- Track percent of reps below 50%, above 80%, and above 100% of quota [6].
- Track realization of overall, street-level quota.
- Make the conversation concrete by building and playing with a simple quota attainment model [7].
I have embedded such a model below, and you can download it here.
Let’s quickly have some fun looking at the scenarios I created:
- Scenario 1 realizes 100% of assigned quota and does that with three stars and one superstar. 20% of reps are less than 50% of quota [8]. Fun, but rarely happens.
- Scenario 2 is what I view as realistic for a high-performing company. We made plan. We’ve got 80% of reps at 80%. Only 20% are below 50%. 30% at 100%, which might be a tad light for most sales managers. (That’s why I started making it green at 40%.)
- Scenario 3 explores highly uneven achievement. We’re still making plan, but half of total sales are coming from one rep. 50% are below 50%. I lived a less dramatic version of this scenario and it’s unpleasant. The board will ignore that you’re making plan and complain endlessly about the unhealthy distribution of achievement [9].
- Scenario 4 will never happen in real life but it shows you what happens when everyone is at 80%. The good news is you’re 80% at 80% and 0% below 50%. The bad news is you’re 0% at 100%. Some people wish for this, but I’m not sure they actually understand what they’re wishing for.
- Scenario 5 is a more realistic version of scenario 3. Again we make plan and this time we get 30% at 100%. But save for one person at 90%, everyone else is in various degrees of trouble. 50% are below 50%. Half the salesforce is thinking of quitting.
- Scenario 6 is an utter disaster, sadly not uncommon in early-stage startups where quotas are mis-set. Either we have hired 10 bad reps or we are setting quotas too high. Change the quota to $600K and watch everything change [10].
- Scenario 7 demonstrates that you can’t actually have 80% at 100% without overperforming. Only rep 7 is over quota (and by only $200K) and the other $600K comes from the contributions of the stragglers.
If you find yourself in conversations about attainment and things start to get confusing, I’d whip out a model like this and start playing with scenarios. You can download this sheet here.
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Notes
[1] Nomenclature: X% at Y% means X% of reps at or above Y% of their quota.
[2] The title is about “proving a repeatable sales process” because a common use of attainment statistics is to prove sales model repeatability.
[3] When done my way (i.e., based on productivity) every number in the model (except the one row with quota) is a realistic take on what we expect to sell. The alternative is to have every number uplifted by 20-30% and then need to do constant mental discounts. That’s too much work that’s too easily forgotten. Start your model on Earth.
[4] Some companies run two layers of cushion: quota to productivity (to account for the fact that 100% of quota is rarely realized) and then productivity to plan (to add extra cushion to increase the odds of hitting plan).
[5] The sum of the quotas for each of the reps, forgetting management layers and cushions, which can complicate things endlessly.
[6] “At” here means “at or above.” I wanted to make many sentences less wordy.
[7] People aren’t great at statistics and distributions and often screw up even simple mental math. For example, if you have a 20% cushion between quota and productivity and you say we need 80% of reps at 100% of plan, then you are also saying that the plan is to beat plan. While that might sound like a great locker room speech, it’s bad analytics. If 80% are at 100%, you hit plan. Any over-performance (and there always is) by the hundred-plus percenters takes you above plan, and any contributions from the 20% of reps below quota take you beyond that.
[8] My intent at picking 50% is both that it’s an unacceptable performance and, while you should model it out for your company, they are likely unprofitable to carry, depending on cost of sales and marketing support resources. Reps at 80% aren’t achieving plan but they are usually squarely profitable.
[9] And they’re not wrong to do so, but well, you did make plan.
[10] Orange cells are drivers/input cells that you can type in. One only hopes their OTE is $150K so it’s inline with a 4x+ quota/OTE ratio and that they don’t require heavy support resources. Then, resetting the quotas might just be the solution.