Here it is, the beginning of another year, and I know many sales operations professionals and compensation administrators are still scrambling to figure out their annual sales plans. Your sales representatives are eager and ready for a great year of selling; they just want to know how much they need to sell and how much they’ll be paid for what they sell.
If you haven’t completed the process of setting your sales quotas, then most likely you haven’t completed the process of designing and rolling out your incentive compensation plan either; especially if your incentive compensation plans are quota driven. Well, you’re not alone.
According to a recent SiriusDecisions survey, on average, only 56% of organizations have completed their sales planning before the start of the new fiscal year, 36% of organizations at the start of the new fiscal year, and 5% of organization after the new fiscal year. Clearly, many organizations are cutting it close and waiting too long to finalize their sales plans.
It’s no wonder that quota setting is consistently at or near the top of the list of sales compensation challenges for most organizations and ineffective sales quotas can derail even a well-designed incentive compensation plan.
Over the holiday break, I decided to revisit a couple of books by Mark Donnolo, a managing partner at SalesGlobe, on sales quotas and compensation, What Your CEO Needs to Know About Sales Compensation and The Innovative Sale. I would recommend them both to anyone in sales operations and compensation.
As I flipped through the pages again, I decided to connect with Mark, partly to wish him and his family well over the holidays, but also to see if he would be willing to co-deliver a webinar with me to discuss top quota setting challenges and his techniques for overcoming them. Mark gets just as excited about this topic as I do and immediately agreed. As we talked, he started listing questions that would be top of mind for sales operations and compensation professionals this time of year and that we could cover during our event:
- Should we set quotas on historical performance or market opportunity?
- Are we actually penalizing our best sales reps?
- Is the issue the people, performance, process, or quota target?
- What can real-life experiences from other organizations teach us?
- How can we combine the art and science to get beyond the math?
As Mark will tell you, “Quotas are the linchpin between the sales force and the strategy of the company, but setting effective quotas isn’t just about the numbers – it is also about the people, and process, and getting the sales quotas right is a blend of art and science.”
Needless to say, I’m rereading Mark’s books and am looking forward to working with him. Don’t miss this webinar and the chance to hear what he has to share about the importance of quotas and his best practices for designing ones that will help you kick off a great year of selling.