Sales&Marketing Management
Sales Quotas: The Harm of the Annual Start-Over
Imagine the following: You’re given a job to build something and paid a set amount to do it. Your job is to keep building, and you’re paid for each one you complete.
Scenario #1: After each thing is built, you’re paid. The completed thing is then put on a shelf for all to see. You’re provided with another one to build. This repeats itself.
Scenario #2: After each thing is built, you’re paid. The completed thing is then disassembled in front of you and put back into its box. The box is then handed back to you and you’re required to build it again. This repeats itself.
In each scenario, it’s the exact same job and the exact same pay. But in which scenario are you more likely to remain engaged, motivated, and excited?
A similar scenario was explored in a research study using Lego models. Participants in Scenario #2 gave up much sooner than those in Scenario #1.
Sales Leadership and Quotas
In sales leadership, you tend to create a Scenario #2 environment for your reps after each deal, and especially after every year, right?
Your sales team is tasked with uncovering, cultivating and closing deals. For each one they close, they’re paid a commission. But without even speaking a word, you send them the message, “You’re only as good as your current (month/quarter/year).” They’re on to build their next deal. What they built is disassembled and forgotten. As the year ends, their attainment resets to zero along with all their peers, as though what they produced never happened. It’s time for them to rebuild.
In the process of starting everyone over each year at zero, the ironic thing is this: You’re actually penalizing your top performers and rewarding your bottom performers. Your top performers are no longer your top performers, and your bottom performers are no longer your bottom performers when everyone is back to the starting line at zero. What’s past is past.
Is that really what you want?
Rethink the Annual “Starting Over at Zero” Approach
As a selling professional, or really any human being, we do our best work when the aim of our work means more than just quota attainment. We do our best work when we can see the fruits of our labor, when we can make an impact beyond just the numbers.
You’d like to keep your top performers optimally inspired, right? Consider these ideas for inspiring your sales team members:
- Allow carryover credit. Is there a way for their quota to start based on their impact on the business long-term? Assumedly your top performers are paid higher than others already. Is there way for those team members to feel recognized for the work they’ve already done?
- Create a customer wall. One sales team has a wall in their office with all of their customer logos on it. You can take this further by including the rep’s headshot next to logo. Or, build pyramids of logos by the reps who’ve brought in the customers over their tenure. As companies and reps come and go, let the wall reflect that. It will create a source of pride for the reps who’ve helped build the company over the years. And selling deals with companies that stay long term can become another symbol on the wall.
- Give out achievement bonuses or titles. In my last role, I periodically ran a report that showed “lifetime achievement by rep,” and talked about the results in sales meetings. While that was well received, it was by no means enough. If it’s possible, provide accelerating bonuses or else titles to individuals based on their overall impact on the business.
I’m confident there are many other ways to reward top performers and grow the inspiration of your team. Importantly, establish practices that lead to high performance, low turnover, and more advocacy amongst the reps for you and your company.
