Ah, the summer months when the living is easy and your mind is anywhere but at work. And the problem really is that your prospects are feeling the same way. You call them and they don’t answer the phone. You email them and get an out of office email back. How are you going to make your Q3 quota if you can’t reach your prospects?
How was this quota set anyways? When your quotas were allocated to the quarters did the sales compensation plan designer just take the annual number and divide it by 25% for each quarter? Or was there thought given to the actual seasonality in your business? Did the designer understand the impact of that decision on your motivation?
When quotas are inflated even by a little the sales team is impacted in a negative way. Most people want to be successful in their work and the gold standard for a sales professional is quota attainment. Many plans also put a fair amount of money towards a quarterly achievement of quota. If the quarterly quota is unachievable, their paycheck can be significantly impacted.
Remember the basic principle of sales quotas is that they should be aggressive, yet realistic. Everyone in the organization should have the same probability of achieving the quota and at the end of the period half or more should achieve it.
Once the annual number is determined, the quota is allocated to the quarters. Seasonally allocate the quotas to the quarters is the answer for setting realistic quarterly quotas. Every company has peaks and valleys to their sales cycle. Sometimes these cancel out during the quarter so each quarter is roughly 25% of the year. But if you are a boat sales rep in New Hampshire, you will naturally sell a lot more boats leading up to and including this beautiful summer weather. If you’re in the same sale position but in Florida, your quarterly sales cycle is more consistent. If your selling software to professors, the sales cycle will mimic the start of the new terms and everyone across the country will have the same seasonality.
To understand the seasonality in your business you should review the historical data by quarter by rep as well as your revenue goals. More on how to set quotas in an upcoming blog.