A 2009 study conducted by CSO Insights revealed that just 51.8% of sales reps made quota, which means 48.2% of the reps MISSED quota. Our benchmarking data shows that world class sales organizations have 75% or more of their reps making quota.
So what’s causing almost half of all sales reps to miss their quotas? TIME!
Assuming we use the model that sales reps work 40 hours per week for 50 weeks per year, they have 2000 total hours to dedicate towards hitting their quota.
Here are 4 reasons why time is killing your reps’ ability to meet quota.
- Territories Improperly Designed – Many territories are determined based on factors of convenience, such as the proximity of sales reps to customers, rep tenure and perceived revenue potential. Companies fail to determine sales rep capacity measured in time and total available market. Do you know how much potential each of your territories has? What percent of wallet share do you have today and what can you realistically get in the next 12 months? How much time does it take for the sales rep to close 1 deal? Do they have time to close enough deals to hit quota? If the answers to these questions tells you a sales rep only has time to sell enough deals to hit 50% of the quota you gave them, perhaps it makes sense to re-evaluate.
- The Peanut Butter Approach – Management SWAGs the number based on lagging indicators (last year’s results, year-over-year quota attainment, etc) rather than leading indicators (market trends, competitive landscape, territory potential). Often, it is spread evenly around the organization like peanut butter on a peace of bread. $10M growth number and 10 reps? How about $1M each? In this case, time is the enemy because not enough of it was spent on building the quotas equitably. An insufficient job was done working through the process, so everyone is left to hope the number gets hit rather than knowing it will.
- Poor Hiring & Training – With the urgency to produce results quickly, managers are anxious to put new reps into the field to sell as quickly as possible. As a result, the hiring and training processes get short circuited. The wrong person is hired and their training is an afterthought. How much better could they be if time was spent hiring the right people and giving them world class training?
- Leads – How do your reps get leads? Are they given Sales Qualified Leads (SQLs) to call on or are they responsible for generating their own? If they do get SQLs from a lead generation source, do those leads close faster than self-generated leads? If they are responsible for creating their own leads, how much time are they spending on lead gen activities versus actual selling? How much more could they sell if this activity was pushed down to a lower-cost resource (ie Lead Development Rep)?
Part of the discovery work we do on projects is to determine where sales reps are spending their time. We do this to better understand how much time they spend on selling activities versus non-selling activities.
The survey example on the left shows sales reps spent just 33% of their time on selling activities. If they only spend 1/3 of their 2000 hours actually selling, what is likelihood they will hit their quota?
Some questions to ask regarding your quota process:
- What is the current make-up of my sales territories? When was the last time they were reviewed to determine current wallet share versus potential?
- What process am I using to assign rep quotas? Can I clearly explain and justify the “how” and “why” to my reps?
- Am I taking hiring and training shortcuts in order to get bodies on the street? What criteria have I assigned to proper hiring methods? Am I vigilant about training my reps and sticking to the process?
- Does my team have enough opportunities to make their quota? Are there activities they are doing I can distribute elsewhere?
Time is our most valuable resource. If you or your team are not hitting the numbers, perhaps it’s time to take a closer look.