While you never want to set unrealistic sales quotas, it's important to make sure they grow with your business. If your executive team forecasts 15% growth in the third quarter, adjust quotas accordingly.
Top-down quota setting is when finance directors email lists sales leaders set quotas based on growth goals over the skills of their salespeople.
The danger with a top-down approach to quotas is that it gives less weight to historical data and the proven skills of a sales team. It's driven almost entirely by where the company's board or executive team would like to be and less by the realistic and healthy expectations of the sales team.
A top-down approach starts with a quota and works its way up to the activities needed to achieve that number.
Ideally, sales teams should take a bottom-up approach to setting quotas. Sales managers can start by looking at historical data that shows what their reps are capable of generating and calculate a quota based on those results.
Pro tip: If your company needs to take a top-down approach because it's a new company or coming back from an atypical year, you may want to consider expanding your sales team's headcount or skill set to achieve those revenue goals. Just remember to set aside some of your budget for this and plan accordingly.
Step 3: Set Activity Goals
Once you've calculated a baseline quota and adjusted it for seasonality, repeatability, and growth goals, it's time to set activity goals.
