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Sales - 6 min READ

How to set realistic sales quotas for your team

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Copper Staff

Contributors from members of the Copper team

Whether you’ve established a sales quota before or not as a sales leader or manager, it can be a daunting task.

You need to be sure your goals are reachable for sales success, yet big enough to satisfy founders and execs and sustain the growth of your company.

Sales quotas need to be set with care as they directly affect the motivation and satisfaction of sales reps, and therefore, the company’s bottom line.

Just how important is it to set the right sales quotas? Check out these stats:

In this setting sales quotas article, we’ll dive into what makes an effective sales quota and how you can use the tools at your disposal to set realistic goals for your sales team.

What is a sales quota? 

A sales quota is a target or goal that a manager (or founder, CEO, etc.) sets for a sales team.

The quota can be tied to a region, a specific team (like the SDRs or Account Execs), or they can be different for each rep. They’re typically daily, weekly, monthly, or quarterly goals. In rare cases, they’re yearly.

What types of sales quotas are there?

Different roles within the sales organization of your company will have different types of quotas. Generally, higher-ups, such as sales managers, will have revenue goals. And, science tells us it’s best if reps have smaller, activity-based goals.

You can categorize a sales quota as either a strategy or a tactic.

A strategy is an overall goal, usually set by a leader in an organization like the CEO or VP of Sales.

Tactics are the actions individuals will take to achieve those goals.

Here’s an example of strategies vs. tactics:

The Chief Revenue Officer (CRO) just set a revenue quota for Q1 of $2MM.

The sales managers that report directly to the CRO will decide how to hit that $2MM quota. Then, the managers will set tactical quotas for the sales reps.

The managers set the following tactical goals for reps:

  • Make 150 calls per day to MQLs.
  • Set 10 meetings per month with qualified leads.
  • Send referrals to 20 networking partners per week.

Harvard Business Review shared research from psychologist Karl Weick about how it’s much more effective to keep sales reps’ quotas and goals activity-based or tactical.

By allowing reps to track small wins during the sales process, they stay motivated instead of getting overwhelmed by big, overarching goals.

It’s much more motivating for a rep in a sales organization to think, “Awesome, I’ve achieved all 20 of my referrals this week.” than, “I’ve only achieved $1,000 of my $25,000 quarterly goal.”

Even if the rep is on track to attain the goal, that $1k doesn’t feel like much when compared to the overall goal of $25k.

Instead of a rep thinking, ”I’ve made all these calls today and only achieved $1,000 of my $25,000 quarterly goal,” when they’re focused on activity-based goals, reps stay motivated, making it easier for them to increase their success rates and hit a realistic sales quota.

Image for post Crush your number.
Pro-tip

Crush your number.

Learn about the 7 habits that reps need to crush their quota.

Avoid these traps when setting sales quotas.

The rear-view mirror trap

If you set your quota looking in the rear view instead of toward the future, you’re not considering the true market potential for your sales organization.

A recent SalesGlobe survey determined that the top sales quota challenge was that quotas are typically based on historical data, rather than market value and real opportunity. This means you need to do your research and set quotas and sales goals based on what’s out there so that reps aren’t demoralized by going after a number that’s not reflective of current market conditions.

The “punishing your best reps” trap

If your top sales rep consistently hits their quota, you’d be wrong to raise it without first considering the consequences.

Sales managers continuously raising quotas makes many top-performing reps feel cheated. They feel punished for being good at their jobs, and consequently, they may leave.

There are also logistical problems when raising quotas for top-performing reps.

Let’s say you're a sales manager and your best rep has closed most of the business in their assigned territory. You increase their sales quota, but keep them assigned to that same territory — how will they hit a higher quota, or sales goal, in a region with less opportunity?

The “demoralizing your team” trap

A sales quota that’s too high won’t be a secret to your team. Your reps will know when the sales process quota you’ve set is unrealistic and they’ll be discouraged from the get-go.

Another problem with setting a quota that’s too high is that sales leaders often lose the respect of their team.

If a leader doesn’t know how—or worse, is unwilling—to set a realistic quota, it’s harder for their team to trust them.

Pro-tip: Use your CRM data and reports to set sales quotas.

The best way to set an attainable, yet ambitious goal for strong sales performance is to crunch the numbers your team puts up currently.

Analyzing your CRM data will tell you what’s realistic, what’s in the pipeline, and which reps are over- (or under-)performing at each stage.

Set revenue quotas for management.

Revenue quotas are based on sales won: revenue coming in. With revenue quotas, salespeople aim to hit a dollar amount, and it’s typically a quarterly or yearly goal.

Since we know that measuring small actions is more effective than encouraging reps to hit big numbers (remember tactics vs. strategies), revenue quotas are often set as a team goal, or for team managers.

To set a revenue goal with Copper insights, head over to your Reports tab and check out the Sales Forecast and Sales Performance Reports.

With Sales Forecasts, you’ll see what’s coming down the pipe and you can use these numbers to set goals for the amount you’d like to close in a specific period of time.

copper crm's sales forecasts

For example, if you are a sales manager, and you know your team typically closes 40% of the deals in the pipeline, you can determine 40% of this forecasted number to set an achievable revenue quota. (More on sales forecasting here.)

Set activity quotas for reps.

An activity quota is a set number of activities that a rep will perform in an assigned period of time.

For example, a rep might need to make 50 calls per day, send 150 outbound sales emails per week, or land 10 meetings with qualified leads per month.

Again, when you set an activity quota for reps, they’re not worried about missing a number. Instead, they stay motivated because they’ll hit their email mark for the week.

To set activity quotas using insight from Copper, click over to the Activity Report under the Reports tab:

activities completed per rep in copper crm
See a bird's eye view of activity per rep

Pay careful attention to the reps that are hitting their current goals. Note the types and amount of activity they’re engaged in. You can use this information to set activity-based quotas for the rest of your team.

Another useful report for setting activity quotas that any sales rep can accomplish is the Activity By Source report.

This report shows which sources (emails, calls, ads) are generating most of your pipeline, which is very valuable in helping you set activity quotas for your reps. You can have reps focus more time on the activities that lead to more won deals.

Once you’ve selected which activities your reps will need to perform to hit their goals, you can plug those into Copper’s task manager to help keep your team focused on hitting their activity quotas.

copper crm's task manager

Set sales quotas with confidence.

Earn sales success, and set achievable quotas by making sure they’re tactics, not strategies. You need to make sure your sales reps get small, daily wins when working on sales goals, instead of worrying them with a big number.

  • Use data from your CRM to make sure you’re assigning reps realistic quotas based on their abilities and the company’s needs.
  • Consider market value along with the data from your CRM when setting goals for your team.
  • Don’t demoralize your team by punishing your top reps (like increasing their quotas without considering the consequences).

How does your team set effective sales quotas? Tweet us and share your best tips!

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