Quota

A quota is the share of the team plan that one seller owns for a period. It is usually set in revenue for a month or a quarter. Some teams set it in won deals or margin instead. The sum of all quotas should cover the team plan with a little room.

The quota lives in the commission plan and on the sales dashboard, next to each seller's won revenue. The CRM supplies the actual side: deals won in the period, counted by close date. The quota itself is a decision, made by the head of sales with the owner.

A plan of $120,000 a month and 4 ramped sellers: a quota of $30,000 each. With room for misses, $33,000 each.

Check progress against quota weekly, in the weekly pipeline review. The head of sales looks at won revenue plus the cautious forecast for each seller, against their quota. The owner sees the team total once a month. A seller sees their own number every day.

The quota changes where you spend coaching time. A seller far below quota with thin pipeline needs more inquiries or better prospecting. A seller with plenty of pipeline and low results needs help with qualification or proposals. Pipeline coverage per seller tells you which case you face.

Set quota from capacity and coverage, not from hope. Look at what a ramped seller has actually closed. Then look at their territory and the pipeline they can build. Tie the commission plan to the quota, so pay follows the same number the forecast uses.

• Setting quotas by dividing the plan equally. Sellers differ in territory, ramp and deal size. Adjust each quota for what that seller can realistically build and close.
• Giving a new seller a full quota on day one. They have no pipeline yet. Start with a reduced quota during ramp and raise it step by step.
• Changing quotas mid-period. Sellers stop trusting the number and start hiding deals for next period. Change quotas only between periods, and explain the reason.
• Quotas that add up to exactly the plan. Some sellers will miss. Example (invented numbers): set quotas that sum to about ten percent above the plan, and test that buffer against results.

By Friday, the head of sales builds one table: each seller, quota, won revenue so far, cautious forecast and open pipeline. Check whether the quotas add up to more than the team plan. Mark any seller whose open pipeline cannot cover the rest of their quota. Bring that list to the next one-to-one meetings.

A weekly meeting on stuck deals that ends with a decision and an owner for each.