Do you really need quotas in sales?
To some that have been raised with a quota, the answer may be of course “Yes”. But to others, quotas seem almost dated, and a bit draconian.
Quota or not — won’t reps just close as much as they can — since they want to make their commissions?
Especially if the comp plan is a good one, won’t it just incent folks to close as much as possible? Who needs an icky “quota”?
I wasn’t sure for a while. In fact, back in the day at EchoSign / Adobe Sign, we had goals but not really traditional “quotas”.
I asked a seasoned account exec this question a little ways back, and his answer was, “Quotas don’t matter anymore. I want to make as much as I can. In fact, I spend every dollar I make. Quotas won’t change that.”
But time has gone by and I’ve learned the reality is, you need both:
🥕 Commissions are the carrot
🥢 Quotas are yes, the stick
All carrot — you stop when you’re full. That may or may not be what the org needs out of sales.
Quotas:
- Add a check-and-balance to the system, and make sure everyone acts at the level of performance the org needs to thrive.
- Make the goals clear to everyone. Otherwise, it’s too easy to hide from a bad month or quarter.
- Align individual goals with team and company goals. For example, an AE might be fine with 40% quota attainment if they only have to work 15 hours a week to hit it, or are working a second job. But that might be a big waste of leads for the startup, which could route them to someone with 100% attainment,
- Moves everyone out of “best efforts” mode. Best efforts sounds nice and comfortable. But only the very, very best perform their best when there aren’t clear goals.
It may seem a bit mechanical, a bit dated, quotas. But sales is about putting up numbers. Not just the numbers that a rep might choose to hit, but about the numbers the organization needs to survive and thrive.
Sales has a lot of tough parts. It’s not for everyone. It’s not really a best efforts role in the end.
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Jason Lemkin, Khareem Sudlow
