All the signs were there. It was time to take action. But I didn’t.
That was how I ended up on the side of the highway with smoke pouring out of my engine.
When we ignore warning signs, serious damage is sure to follow.
The engine of my car had given me some subtle signs that it was about to croak, but I wasn’t paying attention. It wasn’t until the engine stopped working entirely that I was forced to take action.
Unfortunately, the same thing often happens with sales quotas.
Are you paying attention to the subtle (or not-so-subtle) signs that your sales quotas need an overhaul?
In this article, we’re going to discuss five signs that your sales quotas need some serious TLC, as well as some tips on what to do when you see these warning signs.
Watch out for these five signs that it’s time to change your sales quotas.
1. Your whole team is missing the goal.
This may be the most obvious sign that your sales quotas aren’t working. A bit like the smoke that was pouring out of my engine, this sign is a cry for help from your sales team that needs to be addressed immediately.
So, what went wrong?
See if this sounds familiar: your team was doing so well with their sales quotas before. Then the new quarter came around, and the company decided it had loftier goals to reach. So, to fit the revenue goals of the company, the sales quotas were increased.
A few months have gone by, and only a couple of reps have been able to hit their quotas, and even then it’s not consistent.
No, your whole sales team hasn’t suddenly forgotten how to sell. If a recent increase or change in the sales quotas has resulted in the whole team missing their goal, it’s time to revisit them and make them more realistic.
Pro-tip: Learn about the 7 habits that reps need to crush their quota.
2. A negative atmosphere has taken over the sales team.
If no one is complaining, the situation must be okay, right?
Unfortunately, no. As the sales team leader, your team might not feel comfortable approaching you directly to tell you that the sales quotas aren’t working.
Even when the majority of the sales team is reaching their quotas, they may be under too much pressure to hit a quota that’s unrealistic. When this happens, your team could be close to burnout without you even realizing.
As the sales manager, you need to make sure you understand how your team members are feeling.
What’s the general atmosphere when you listen in on sales conversations? When you assess and coach individual team members, what kind of attitude do you perceive towards the current sales quota?
Making these coaching sessions more effective can also have a large impact on your team. In fact, one study found that companies that effectively coach their sales team see 16.7% higher revenue growth than companies that don’t.
However, the same study also found that more than half of all companies don’t coach their teams effectively.
Spending more time coaching your team helps you get involved with your sales team and motivate them to do their best. It’ll also help you see when your sales quotas aren’t working for the team.
3. Your whole team is hitting the goal.
This may seem like the opposite of a warning sign. After all, isn’t it better when the whole team hits their quotas?
This subtle warning sign is telling you that your team isn’t being challenged. Instead of stretching to the limit of their abilities and being proud of their accomplishments, they’re simply plodding along with an easy sales quota.
Balance is the key here: while you don’t want your sales team to be on the edge of burning out, you also don’t want them to be floundering aimlessly.
A little bit of stress is healthy, because it keeps your team actively working towards their goals. And it’s normal for a few team members not to hit their quotas. In fact, more than two-thirds of all salespeople miss their sales quotas.
If your team has a higher proportion of team members hitting their sales quota, you know you’ve hit gold.
4. Star performers reach the goal, but go no further.
Again, this is a sign that your team just isn’t being challenged.
Imagine there’s still a week left in the month, and your star performers have already hit quota. When the end of the month comes, you’d expect them to have gone beyond their quotas.
If star performers are unmotivated to keep pursuing sales after they hit their numbers, then something needs to be changed.
It may be that your sales quotas are too easy for your team. Or, it may be that they need some extra incentive in their compensation plans to drive them to reach out for more sales. For example, do your reps seem to slow down when they hit the ceiling on commissions?
This may be the time to change up your incentives and help motivate sales reps to continue selling even after they pass the finish line.
5. Your sales team has a high turnover rate.
How many sales reps have quit your company in the last year? How many quit in the last quarter?
How many quit since you last changed your sales quotas?
The reality is that unattainable sales quotas are the second most likely reason that those people quit your company.
That means if you’ve seen a sudden rise in the number of reps quitting, there may be a serious problem with the quotas you’ve set.
Obviously, it’s too late to salvage the reps that have already quit. But it’s not too late to make sure your current sales reps don’t leave as well.
If you see more than one rep quit in a short period of time, it’s time to act fast to overhaul your sales quotas and save the rest of your team.
If you’re seeing these signs, it’s time to take another look at your sales quotas.
Are you starting to see the smoke coming out of the engine?
If you’re noticing one or more of the warning signs mentioned above, it’s time to take action and revisit your sales quotas.
Here are three tips that will help you fix your situation before your sales engine croaks.
Set a different base for your sales quotas.
If you currently base sales quotas on revenue or profit, it may be time to switch up your base.
Another great way to set quotas for your team is by using sales activities instead of sales volume.
There are plenty of tasks that your sales reps need to accomplish in order to work a new prospect through the sales pipeline.
Why not use those tasks to track team success?
Setting quotas that involve the number of meetings taken, cold calls answered, or emails sent per week or month can help your sales team focus on the tasks that are most important.
Using your CRM, you can assign and monitor the tasks that your team is accomplishing, giving you a clear view of what your team is doing to achieve their goals.
Get the honest opinion of your sales team.
It’s time to sit down and talk with your sales reps individually and see what’s going on in their minds.
Involving your sales team in the process of creating sales quotas will help them feel more motivated to reach the goals they themselves helped set.
But how can you as a sales manager make sure your team gives you their honest opinion?
Let your team see you as another person, someone who is there to help the whole team progress and succeed. And don’t just talk the talk. Be approachable and invite all opinions, whether they speak positively or negatively of the current sales quotas.
That way, it’ll be easier to see how your team really feels about their current quotas, and you’ll be there to help them reach their goals and prevent burnout.
Give your team a quota they can reach, but that still challenges them.
Setting sales quotas that are realistic involves checking the past performance of your team. If you’ve set a sales quota that’s solely based on the revenue goals of the company, it’s no wonder you’re seeing the warning signs mentioned above.
Goals that are calculated with historical performance in mind will give your sales team a better shot at working within their capabilities.
Of course, a balance is needed: you still want your sales team to be challenged.
So, be cognizant of the ability of your whole team, and equally importantly, give them the motivation they need to work hard and reach their goals.
The warning signs are there—are you listening?
Hopefully, there’s no smoke coming out of your engine yet. You still have time to overhaul your sales quotas and keep your team engaged.
But you have to be listening to the warning signs.
While the most obvious sign is your entire sales team missing their sales quota, more subtle signs also exist and may slip by unnoticed.
If your team reeks of negativity, or if several team members have recently quit, it could be that they’re burning out trying to reach unattainable quotas.
On the other hand, if your sales reps are all reaching their quotas and no one is pushing beyond the goal, this could mean your team is unmotivated and unchallenged.
Whatever the warning sign, there’s still time to act!
Take action early and don’t overlook your sales quotas.