Table of Contents
Businesses have a number of different tools to help them achieve their sales goals. Sales quotas are one such tool, which allow managers and executives to set an expected revenue for each individual department or group within the company.
The “sales quota calculator” is a tool that allows users to set quotas for sales. The tool can be used with 3 templates that are free to use.
Sales quotas allow companies to hold revenue staff to minimum standards, anticipate sales, and set goals to meet corporate sales targets. They may be created using one of our three free customized sales quota templates, or by defining fair but aggressive objectives based on income, key actions, and number of deals. We’ll go through how to create a quota and best practices for making sure your salespeople fulfill your company’s goals.
What Is a Sales Quota and How Does It Work?
A sales quota is a minimal criterion for workers to meet in terms of sales output over a specified period of time. It might relate to a particular sales action that has to be accomplished, such as making calls, sending emails, or scheduling appointments, or it can be performance-based, such as establishing revenue-generating or deal-closing targets.
Sales Quotas Come in a Variety of Shapes and Sizes
Sales managers are in charge of establishing minimum activity and performance criteria based on the organization’s revenue, growth, and profitability objectives. They may be established for the whole sales department, or split down into teams or individual reps. Consider whether quotas should be distributed evenly or proportionately based on revenue or deal possibility when breaking down and allocating them to people or teams.
Here are three different Sales Quotas Come in a Variety of Shapes and Sizes commonly adopted to reach organizational goals:
- Quotas for sales revenue: The quantity of revenue that must be earned each week, month, quarter, and/or year.
- Activity quotas: The amount of actions (e.g., calls made, emails sent, appointments scheduled) or leads that must be created per week, month, quarter, and/or year.
- Quotas based on deals: The number of deals that must be concluded or the number of items that must be sold each week, month, quarter, and/or year.
3 Templates for Sales Quotas for Free
Setting sales thresholds might be tough if you’ve never done it before, but you can make it easier by utilizing our free sales quota templates. There’s also the extra strain of knowing that failing to meet a sales goal might result in financial loss or hardship for your company. To accomplish your company’s sales objectives, you’ll need to create quotas that are both tough and attainable.
Download and personalize these three free templates for your company:
Free Revenue Quota Template for Sales
This template allows you to create sales revenue criteria for the sales department, teams, and individual representatives if you know how much income you intend to earn over time. The income targets are segmented into teams, persons, and activities in this free template, which uses a top-down strategy.
Revenue Quota Template (PDF)
Template for a Free Sales Activity Quota
If you don’t know how much income your company needs to generate but know how much activity it should have each week, month, or quarter, use this template. It adopts a bottom-up strategy, determining the activities required to move leads into and through the sales funnel first. Then you may estimate income earned or sales completed depending on conversions achieved by activities.
If you know how much activity is required to satisfy revenue or deal minimums, you may use this template in combination with any of the other two. Sales goal trackers are a fantastic method to supplement a sales activity quota. With dashboards and reporting options, you can keep track of the activities of individual sales agent as well as your whole team.
Obtain a copy of the Activity Quota Template.
Template for a Free Sales Deal Quota
This template is ideal for your firm if you know precisely how many sales you need to close or want to complete within a certain time frame. It follows the same top-down methodology as sales revenue quotas, beginning with revenue targets broken down into deals, then the activities required to meet those closed-deal assignment requirements.
Deal Quota Template may be downloaded.
Best Practices for Establishing & Managing Sales Quotas
In your company’s sales plan, establishing minimum sales criteria for sales people and teams is an important strategy development component. Best practices for ensuring sales quotas are appropriate and realistic should be followed to be successful in helping your firm reach its objectives.
When it comes to defining and monitoring sales targets, there are five recommended practices to follow:
1. Make Use of Historical Information
Use past sales data on activity and performance to develop sales production criteria if your company has it. For example, if each sales representative generates between $100,000 and $200,000 in revenue in a typical year, that range might be used to determine how to establish sales quotas based on past data.
Sales trends and seasonality should be factored into historical data. For example, if your company typically does half of its sales in one quarter, quarterly sales targets should reflect this, with larger goals established during the busiest season and lower objectives set for quarters with traditionally low sales.
2. Create individualized sales quotas based on the likelihood of success.
It’s easy to split a complete sales team quota evenly, however this is a bad practice since not every sales person is created equal. Each sales production assignment should be customized depending on your sales people’ expertise, talents, and resources.
Consider a four-person sales team with two brand-new salespeople, one with three years of experience, and one with seven years of experience. Over the following year, the team must generate $500,000 in total income. Set relative quotas, such as asking the most senior rep to generate $200,000, the three-year rep to produce $150,000, and the new representatives to produce $75,000 apiece, rather than dividing it by four.
Activity-based quotas should be regarded in the same way—some salespeople may be more comfortable or skilled at certain sales duties than others. When representatives or teams don’t all have the same income potential, such as when selling items or services with different price points and profit margins, personalization is required.
Consider the following scenario: you have a three-person sales team, all of whom have about the same amount of expertise. One agent likes cold calling and has fantastic results, another generates a lot of leads via networking events, while the third excels at creating and nurturing leads through sales emails. Set exercise goals that match each rep’s abilities and encourage each rep to do more in their specialized areas.
3. Outline a strategy for meeting sales targets.
By default, activity-based quotas provide a minimal set of goals. You may, however, define segmented activity targets if you’re setting sales income or deal-based performance requirements. Provide assistance, direction, and continuous sales training to your sales personnel, regardless of the sort of sales targets you establish.
Consider setting a deal-based sales target of 25 deals for the next year. Your sales team is solely focused on cold calling, and you know that just 3% of calls result in a prospect appointment. Fourty percent of prospect meetings result in a business proposal being submitted to the prospect, and fifty percent of proposals sent result in concluded transactions.
Based on these figures, 4,166 phone calls are required to schedule 125 visits, make 50 offers, and close 25 sales. You may further divide this by dividing the suggested cold calls into weekly calls. To meet your yearly deal-based quota, you’ll need to make roughly 87 cold calls every week.
You may then split activity requirements evenly across your agents or proportionately depending on the need to customize them for particular representatives. Sales managers must meet with teams and sales people individually on a regular basis throughout the year to monitor and track success and provide one-on-one coaching.
4. Establish realistic sales targets
Minimum sales targets must be attainable while being hard enough to motivate and push your sales force. If the goal is set too low, a salesperson may underperform for the rest of the week, month, quarter, or year. Because sales representatives may feel hopeless if a sales quota is set too high, they may slow down and quit up attempting to meet it.
Looking at historical averages to determine what your company’s sales agents were able to achieve, then using those statistics as a benchmark for your current salespeople, is one approach to guarantee output requirements are reasonable. If you’re starting a new firm or have never monitored past sales activity, you may utilize industry metric standards for things like lead qualification, email open rates, and deal closing rates to create activity or performance objectives and work backward from there.
Small incentives and awards might be utilized early on and throughout to motivate reps to keep working to tackle the issue of reps slowing down their activity. For example, you may start by awarding gift cards to representatives who surpass their weekly criteria by a specific amount, then gradually raise the value of the gift cards while simultaneously raising the threshold requirements over time.
5. Manage Sales Quotas Using Technology
Customer relationship management (CRM) software, for example, is an excellent tool for defining and tracking sales targets. CRMs enable you to set activity or performance criteria for a certain time period, assign them to salespeople, and measure their success individually or as a team.
Freshsales, for example, has sales forecasting capabilities that let you take a sales estimate, add a quota, and allocate it to a team or a single person. The quotas may then be tracked using the CRM’s system and the sales forecasting dashboard.
Freshsales sales dashboard with progress on quota (Source: Freshsales)
Sales gamification software may also be used to establish contests for reaching sales targets, tracking progress, and rewarding teams or individuals that perform well or better. Spinify is an example of a sales gamification application that allows you to create contests based on activity, such as phone calls made, and track your progress on a scoreboard.
Leaderboard for Spinify phone calls (Source: Apple)
To boost sales performance, employ incentives to drive your sales personnel to strive for excellence and meet their production objectives as quickly as feasible. Managers may reward sales workers who meet their objectives with gift cards, prepaid cards, or contributions to different organizations using gamification solutions like Tango Card.
Tango Card is a catalog of gift cards (Source: New Pace)
Conclusion
Setting sales quotas for your company gives your sales teams and individuals a benchmark to aim towards. They also provide a plan for achieving sales revenue estimates. You can better assure your representatives will be enthusiastic to work toward attaining your organization’s sales objectives by using our free sales quota templates and guidelines for creating and managing the process.
The “example of sales quota” is a great way to help keep your business organized, and it’s easy to set up. In this article, we’ll show you how to do just that.
Related Tags
- types of sales quotas with examples
- how to calculate sales quota percentage
- methods of setting sales quota
- quota setting best practices
- what is sales quota
