Thoughts on entrepreneurship, startups, and tech.


Sales Quotas Are Just One Pea In The Pod

Have you ever taken a Fitness Gram / Cooper Pacer Test? It’s a program that is used by sports coaches and trainers to estimate an athlete’s VO2 max (maximum oxygen uptake) that is one of the dominants of endurance sports performance criteria. The particularity of this “field test”, which is often taken on track, is that it requires you to run each lap continuously faster than the precedent (marked by exasperating beeps) until you can no longer keep up with the rhythm. Although this test is widely used as a reference for an athletes potential, it is also comprehensively (and measurably) only one facet of athletic performance and thus should be kept in perspective. The same rationale should be applied to sales quotas — they’re just one “pea in the pod” of sales performance.

The Sales Quota has made its way onto most business dashboards today and most often has taken one of the primary spots — measuring sales performance by essentially a monetary value. Take a moment and look through a bunch of job descriptions on popular job boards for Sales positions and you’ll see just how prominent and widespread the phenomenon has become. What’s novel about this bias is that when you question most leaders and those running sales or biz dev, there’s almost an unconditional consensus that the figures aren’t mathematically sound, no one can corroborate on the origin of the preset goals or figures that compile the results and most astonishingly; that any outcome does not correlate with the person’s activity, sustainable growth of the account and customer satisfaction.

So why continue the massacre?

Because no one has the nerve to simply cap its influence on overall sales performance. Let’s be honest, the issue at hand is plainly control — and setting up a sales quota is a quick & easy choke collar. Management are notoriously nervous about working with people who spend the greater part of their time away from their desks (escaping the most fastidious of tasks designed exactly for that reason, completing unending fields in SFA/CRM) and doing qualitative things that most companies tend to overlook. A good place to start looking for the telltale signs of sales performance, and curiously the single most important aspect of a sale, is “usage”. At any stage of your sales cycle, usage is what translates to whatever form of satisfaction that is necessary to justify the exchange of an amount of money or its equivalent for goods or services. So if your customers are happily and intensely using your product or service then your sales / account / bizdev has accomplished more than you think and most of that, under the traditional radar of standard sales kpi’s. Things like brand awareness, promotion, competition, affiliation, product knowledge and usage — throughout your customer’s organization (that can all be measured) are probably more revealing on quality sales performance that merely meeting or beating a quarterly sales target.

As with many results, sales performance is a combination of a myriad of skills, personality, and heart and putting too much focus and pressure on one element can shadow the surrounding components and lead to failure — “the whole is greater than the sum of its parts”.