It is common for sales commissions and incentives to be tied to a quota. Setting sales quotas is a sales management function that involves a tradeoff between aggressive quotas that are difficult to achieve or quotas that set realistic expectations. In some cases, aggressive quotas backfire as they decrease motivation and become more of a dark joke that a serious target.
A monthly or quarterly revenue target such as a software salesperson with a quota to close $100,000 a month.
Unit Sales Quote
A quota based on a number of units such as 22 cars a month.
Customer Acquisition Quota
The number of customers you sign in a month. For example, a data services sales team with a quota to sign 50 customers a month.
A quota for add-ons of related products and services. For example, an electric car salesperson with a quota to sell 15 charging systems a month.
A quota for upgrades. For example, a cloud platform salesperson with a target to upgrade 5 existing business customers every month to a more expensive enterprise version of the service.
A target for average margins such as a salesperson for a homebuilder with a target to achieve 30% gross margins in a quarter.
Quotas for sales activities such as demos and proposals. For example, an aircraft sales person who is expected to deliver at least 10 demos a month.
Sales people who are expected to manage customer relationships and retain accounts may have a retention quota such as a 90% customer retention rate in a year.
Lead Generation Quota
A quota for generating qualified leads such as 100 leads a month.
|Overview: Sales Quota|
A revenue target for individual salespeople, teams and departments.
Motivation and goal setting