sales
Sales Quota
The revenue target assigned to a sales rep over a defined period.
Definition
A sales quota is the revenue (or new-customer count) target assigned to a sales rep, typically per month or quarter. Quotas align rep incentives with company goals and create accountability. Quota-setting math: each rep should produce 3-5x their fully-loaded cost in new gross profit. Lower than 3x and they're not paying for themselves; higher than 5x and the quota is probably impossibly stretched. Healthy quota attainment company-wide: 60-80% of reps hit quota. Below 60% means quotas are too high; above 80% means they're too easy.
In your business
- →Each rep should generate 3-5x their fully-loaded cost - that's the math floor
- →Healthy quota attainment: 60-80% of reps hit quota company-wide
- →Tie commission to gross profit, not just revenue - otherwise reps discount to hit quota