An important aspect of sales performance management is ensuring that representatives are meeting their regular quotas. Supervisors have to set realistic goals for their staff members, but also ensure that agents are moving enough goods or services to help the company increase its revenue. This can be a fine line to walk, and managers do their best to ensure that employees can achieve their objectives. Unfortunately, new data shows that salespeople fail to hit their quotas more often than not.
According to the Xactly Corporation, 40 percent of sales teams finish their pay periods with less than 80 percent of their quotas filled. There are numerous reasons why a staff member would fail to meet his or her quota. For instance, the representative could have medical issues that make it difficult to meet with clients and generate leads. Additionally, managers might have short measurement periods so agents don't have sufficient time to sell their allocated volumes.
Whatever the case may be, Xactly's findings aren't good news for sales teams. Consistently falling short of the quota shows that the staff needs to improve and find ways to improve their returns. Moreover, SPM professionals must find ways to ensure that agents are properly motivated to hit their benchmarks every month.
Increasing motivation through incentives
Selling Power Magazine notes that managers should review their sales incentives when attempting to fill quotas. In some cases, employees may be able to earn their commissions without finishing their complete allocations. As a result, some staff members aren't motivated to sell anything beyond a certain threshold because they've already earned their paychecks. This means that companies are paying representatives as if they had completed their quotas without actually closing a sufficient number of deals. This model isn't sustainable because businesses may starting paying out larger wages than their revenue can support.
Managers must find ways to ensure that incentives are tied directly to quotas. For instance, an employer could withhold payments until representatives meet their goals. This would ensure that agents have to meet their quotas during every pay period if they want to earn their regular wages. Alternatively, companies can offer a tiered plan in which workers earn more and more as they come closer to reaching specific objections. Staff members will be motivated because every subsequent check will be larger than the last. Sales supervisors should consider every available option before deciding which is best for their organization.