The Very Real and Very Negative Impact of Unsupported Quotas on Sales Teams
While the image above is pretty hilarious, it's no secret that quotas are often a stressor for sales teams. So much so, that even artificial intelligence knows it stokes fear in the hearts of sales professionals across the globe. And for good reason; quotas are often out-of-sync with the current tactics and strategies being used by the organization. This leads to a critical mass of stress, anxiety, and ultimately turnover with quarter after quarter of lackluster results. In this blog post, we'll dive deep into the negative impact of unsupported quotas on sales teams and offer some alternative solutions to help you achieve your growth goals.
What are Unsupported Quotas?
Unsupported Quotas are goals that are assigned to a person or group of people in an organization even though there's been no thorough plan established for corporate support.
Corporate support means providing additional expertise, training, and resources to help enable quota attainment.
A tell-tale sign of unsupported quotas is that they are often set without appropriate input from key stakeholders around each stage of the sales process. Companies with unsupported quotas often don't have any of the objective visibility they need to establish informed goals due to such limited collaboration. As a result, quotas are often arbitrary and don't reflect the reality of what it takes to close a deal. This can lead to frustration and discouragement among salespeople who feel like they're being set up to fail. They can feel disconnected from leadership, and therefore the vision of the company.
It is imperative for all executive leadership to have a firm grasp of the tactics and strategies necessary to achieve predictable sales growth. Growth is an organizational goal. And organizational goals are ORGANIZATIONAL GOALS!
Some of the most important areas you can focus on TODAY to grow sales as an organization are:
Understanding your inputs - aka Lead Generation
Are you generating enough quality leads at the top of the funnel to meet opportunity creation targets, let alone wins?
If not, is the problem quantity, quality, or both?
Have you mandated a constant feedback loop in your organization between sales and marketing so these areas can be optimized?
Your opportunity win rate
Of your won and lost opportunities, is your win rate sufficient? Do you have a target % set for your sales organization? Is it improving or slipping? Are some team members consistently winning at a higher rate? Are you workshopping/templatizing their success? What about providing extra resources to those who are struggling or seeing their win rate decline?
Are the right leads going to the right sales reps for the best chance of winning?
Remember, if your win rate is slipping your lead-gen and/or average sale must increase to compensate!
Your ability to increase the average sale
Whether adding additional products and services, increasing contract terms, raising prices, or simply reducing over-dependency on discounts in the sales process; it's critical to never lose focus of your average sale amount.
Your ability to increase customer lifetime value
Customer Lifetime Value (CLV) is an important metric because it shows how much money a customer brings in over the course of their relationship with a company. This can help businesses figure out how best to invest in customer service and marketing in order to keep customers coming back and spending money. How can you install KPI's focused on increasing this metric based on the products and services you provide?
Your ability to shrink time-to-close.
Accelerating your sales velocity means making more money in less time. Look at it this way. Imagine your sales process in stages - maybe it looks something like this:
If you are able to decrease the amount of time it takes to go from Stage 1 to 5 (Qualification to Closed Won or Closed Lost), it will allow you to manage more sales over the same time period and at the same labor cost. That's important if you're taking notes on step 1.
There's no way around it; the modern workforce requires access to lead generation tools, sales training, and sales intelligence technology that gives them the best position possible against their competition and to serve their prospects in the most elegant way possible. A competitive company must provide these things and view them as necessary investments to attain sales targets.
In addition, organizations with unsupported quotas often have forecasts that can be hyper-rigid, leading to more frustration if deals take longer to close than anticipated or if the buyer changes their mind partway through the process. This lack of flexibility can cause good salespeople to leave the organization in search of a company with a better quota philosophy and forecasting system. Remember, when forecasting it is important to use variables such as Forecast Categories, Probability, and Close Date.
Forecast Categories
Example Forecast Categories include
Pipeline
Out of all the opportunities in this category, only a few will close with success during the current period. 'Pipeline' means that the customer is still early on in their buying journey- so these deals need more development. As guidance, you should anticipate that only one-fourth of these deals will close within this quarter.
Best Case
The Best Case category contains sales deals that are qualified and have an embedded Close Plan, though there is still some work to be done in order to advance these opportunities. Generally, you can expect to win between a third and half of the deals in this category.
Commit
The Close Plan is proceeding smoothly for these opportunities. "Commit" means that you are certain of a positive outcome, and usually these types of opportunities slip from the current time period only in rare cases. For this Forecast Category, you should anticipate winning 90% of the committed opportunities.
Omitted
Deals that are set to be Omitted are those that have been Lost or disqualified. However, for the sake of reporting, other opportunities-such as renewal deals-may also be placed in the Omitted category. Conversely, the sales forecast includes every opportunity NOT in the Omitted category
Closed
All opportunities in the Closed Forecast Category are deals that have been won, and no additional sales effort is needed to secure the sale or revenue. Make sure to include all of these Closes Opportunities in your sales forecast for the month, quarter, or year.
Probability
Create "non-negotiables" in your sales process that are tied to Probability rankings and Stages. (e.g., In order for an opportunity to be at 75% probability, what MUST occur first?)
Leverage automated processes to specify up-to-date probability for each opportunity without overburdening sales reps with constant manual updates
Allow reps to add context to specific opportunities, including updating probability manually when appropriate
Close Dates (Primary, Secondary, Tertiary)
Repeat after me - Close Dates Can Not Be Crap-Shoots! While your first close date may need to be a temporary "educated guess", take the guesswork out by applying a close date that is automatically based on your organization's current average opportunity lifecycle.
Build on the accuracy of your close date as a main focal point. Work on up-skilling your sales reps so they are comfortable AND effective at garnering real close dates, and avoid the smoke-and-mirrors that often kill reliable forecasting at the last minute. We are proud to recommend our friends at Trustpoint, a Missouri-based Sandler Training Center. (Pro-tip: If you don't know about Sandler Sales Training, you do now and you're welcome!)
Finally, bigger quotas that don't come with expanded resources and encouragement can create an environment of competition rather than cooperation among salespeople. If people are focused on meeting their own quota rather than working together as a team, it can lead to infighting and backstabbing rather than collaboration and success. The last thing a leader wants to contribute to in their team is scarcity mindset. This is especially true when you consider the abundance of resources available to help leaders get to where they want to be.
So what's the solution?
Companies need to invest in the right mix of resources and training to give their sales leaders and sales teams the best chance at hitting their target. There are a plethora of lead generation solutions that could be right for your business, and sales training methodologies that could dramatically boost your metrics. However, you need to tread carefully. With more and more Software-as-a-Service offerings popping up, it's important that you have a trusted resource explore options with you and guide you into a reputable solution.
Salesforce is the perfect platform for companies looking to easily provide the resources and guidance necessary to help sales teams meet their quotas. Salesforce integrates beautifully with all major lead generation platforms, offers robust lead and opportunity management, follow-up and nurture automation, and last but not least Salesforce offers rich internal collaboration with Chatter and Slack (Salesforce acquired Slack in 2021 for $27 billion). All of this allows sales teams to focus on selling while Salesforce takes care of the back-end processes. As a result, companies are able to increase their sales productivity and close more deals more predictably.
Your homework???
Consider how Salesforce (which powers 90% of Fortune 100's) could benefit YOUR business, big or small. Can it help you provide more corporate support to your sales team? Can it help you create revenue predictability? Can it help you automate intelligently? You already know the answer...and so does our AI! Just check out this image it created when we prompted it with "sales team with full support of company" (Yeah...still a little creepy but they're obviously much happier!)
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