Why sales reps increasingly missing their quota?
Touchy topic, isn't it?
This is a touchy question with a lot to unpack, so let’s dig in. One of the most interesting aspects of this issue is how answers can vary dramatically depending on who you ask. Sales reps might provide one set of explanations, while management might offer a completely different perspective. Our goal here is to be fair and, most importantly, exhaustive.
First, for those new to the field, let’s clarify: what is a sales quota? A sales quota is a target or goal that a salesperson must achieve within a specific period, such as monthly or quarterly, often measured in revenue, units sold, or new clients acquired. Here are some alternative (and humorous) ways to think about it:
The 3M: Monthly Masochist Marathon: an arbitrary goal set by someone who’s never met your clients but assumes they can buy twice as much as last month. The reward? Another quota that’s even higher!
The Salesperson’s version of a Piñata: you whack away at it day after day, and if you’re lucky, it might spill out some commission. If not, well, just keep swinging.
The Boss’s favorite mythical creature: much like a unicorn, it’s beautiful and inspiring in theory, but no one’s quite sure it actually exists or is achievable.
Regardless of how you view it, your performance against your sales quota directly impacts your standing within the organization. There are many possible scenarios, but to simplify:
Significantly below quota: You may either be terminated or decide to leave.
Above quota: You’re treated like royalty.
Most sales reps find themselves somewhere in between these extremes. But is it really true that many reps are missing their quotas? Historically, studies have shown a decrease in the percentage of sales reps meeting their targets. For example, RepVue data on the U.S. market shows variations in quota attainment by role. Notably, there is a lack of sources contradicting this downward trend, though the data does vary between studies. (See end of the article for the different sources used).
Let’s explore the reasons commonly cited to explain why sales reps are missing their quotas. While external factors like market changes and increased pressure are often mentioned, let’s focus on internal factors that organizations can address.
Internal Factors Contributing to Missed Quotas
Complex compensation plans: overly complicated compensation plans can confuse and demotivate sales reps, leading to lower quota attainment. And you would be surprised how complicated some can be. Simplifying these plans is essential to ensure reps understand how they earn commissions and stay motivated to achieve their targets. (see “How can 'Usain Bolt eating 1,000 Chicken McNuggets' Shape Your Compensation Strategy”)
Unrealistic quotas: setting quotas that do not reflect market conditions or historical performance can frustrate sales reps and lead to widespread failure. Unrealistic quotas may be used to generate revenue without paying commissions, but this is not a sustainable strategy.
Misaligned sales activities: misalignment between sales activities and business objectives can hinder performance. For instance, reps might focus on selling familiar products rather than newer ones that better fit market needs, leading to longer sales cycles and missed quotas. Regular strategy changes can also disrupt performance, much like a large ship trying to change course. (See “BtoB Sales: What Can We Learn from Dentists?”)
Poor time management: Sales reps often spend a large portion of their time (up to 70%, according to some studies) on non-selling activities like administrative tasks. It’s worth examining what reps are asked to do and considering whether some tasks should be reassigned to administrative roles. Specializing functions could significantly improve time management. Defining what constitutes “selling-activities” could be an interesting challenge. What do you think falls under this category? (Maybe a topic for another article). (See “Sales Success Secrets: What Top Performers Do Differently”)
Long ramp-up periods for new hires: new sales hires take time to reach full productivity, often requiring 90 days to start selling and up to nine months to become fully effective. Organizations should plan to support new hires during this ramp-up period to reduce the impact on quota attainment. The higher the turn-over (Reps leaving), the larger the impact.
Lack of structured sales processes: without clear guidance, reps may struggle to advance deals effectively, leading to missed opportunities. A structured sales process with defined steps and milestones can improve quota attainment and ensure consistency across the team.
Conclusion: taking action to bridge the quota gap
The challenges preventing sales reps from achieving their quotas are complex but not insurmountable. Sales leaders must look beyond surface-level explanations and critically examine internal processes, compensation plans, and sales strategies. Remember, you hired your reps, so their success reflects on your organization’s structure. Simplifying compensation structures, setting realistic quotas, aligning sales activities with business objectives, and reducing administrative burdens are all crucial steps toward improving quota attainment.
Now is the time to evaluate your sales team’s challenges as interconnected parts of a larger ecosystem. By addressing these internal factors, you empower your sales reps to succeed and position your organization to thrive in an increasingly competitive market. Take this opportunity to reassess your strategies, actively listen to your sales team, and implement changes that align with your business goals and the needs of your sales force. A motivated and supported sales team is the key to driving growth and achieving your revenue targets. Let’s take action today and turn quota attainment into a shared success story.
Sources for this article:
https://www.salesforce.com/news/stories/sales-research-2023/
https://salestalentinc.com/blog/percentage-sales-reps-hit-quota/
https://www.vainu.com/blog/most-sales-reps-dont-hit-quota/
https://www.quotapath.com/blog/
https://www.thequota.co/articles/heres-the-average-base-salary-and-quota-attainment-data-for-sales-reps-in-november-2023https://www.revenue.io/blog/sales-quotas
LinkedIn State of Sales Report (several editions)