Quota Planning for Sales Leaders

𝐎𝐧𝐞 𝐨𝐟 𝐭𝐡𝐞 𝐦𝐨𝐬𝐭 𝐜𝐫𝐢𝐭𝐢𝐜𝐚𝐥 𝐜𝐨𝐧𝐯𝐞𝐫𝐬𝐚𝐭𝐢𝐨𝐧𝐬 𝐟𝐨𝐫 𝐚 𝐬𝐚𝐥𝐞𝐬 𝐥𝐞𝐚𝐝𝐞𝐫 𝐢𝐬 𝐰𝐡𝐞𝐧 𝐡𝐞/𝐬𝐡𝐞 𝐝𝐢𝐬𝐜𝐮𝐬𝐬𝐞𝐬 𝐭𝐚𝐫𝐠𝐞𝐭𝐬 𝐰𝐢𝐭𝐡 𝐭𝐡𝐞𝐢𝐫 𝐭𝐞𝐚𝐦. After two decades of sitting in those goal-setting rooms, here's my take: The number is never the problem. The absence of a path is. When a target feels impossible, your team does not need more motivation. They need more clarity. So here is what I do every single time: 𝐒𝐭𝐞𝐩 𝐮𝐩 𝐭𝐨 𝐭𝐡𝐞 𝐛𝐨𝐚𝐫𝐝. 𝐋𝐢𝐭𝐞𝐫𝐚𝐥𝐥𝐲. Break the big number into cohorts, and then cohorts into channels. Break channels into daily inputs that an individual salesperson can actually control and own. A $500k target is paralyzing. But break it down using the known conversion rate and that's forty leads per day per rep. Add a clear pipeline review cadence every Tuesday morning to guide the team before they need to ask you for it. Same number. Completely different energy in the room. 𝐂𝐨𝐦𝐩𝐥𝐞𝐱𝐢𝐭𝐲 𝐝𝐨𝐞𝐬 𝐧𝐨𝐭 𝐣𝐮𝐬𝐭 𝐬𝐥𝐨𝐰 𝐞𝐱𝐞𝐜𝐮𝐭𝐢𝐨𝐧 𝐝𝐨𝐰𝐧. 𝐈𝐭 𝐪𝐮𝐢𝐞𝐭𝐥𝐲 𝐤𝐢𝐥𝐥𝐬 𝐜𝐨𝐧𝐟𝐢𝐝𝐞𝐧𝐜𝐞. 𝐀𝐧𝐝 𝐚 𝐭𝐞𝐚𝐦 𝐰𝐢𝐭𝐡𝐨𝐮𝐭 𝐜𝐨𝐧𝐟𝐢𝐝𝐞𝐧𝐜𝐞 𝐰𝐢𝐥𝐥 𝐬𝐚𝐧𝐝𝐛𝐚𝐠 𝐞𝐯𝐞𝐫𝐲 𝐟𝐨𝐫𝐞𝐜𝐚𝐬𝐭 𝐲𝐨𝐮 𝐠𝐢𝐯𝐞 𝐭𝐡𝐞𝐦. The best sales leaders I have worked with are not necessarily the best motivators. They are the best architects. They make the invisible visible. 𝐃𝐨 𝐧𝐨𝐭 𝐠𝐢𝐯𝐞 𝐲𝐨𝐮𝐫 𝐭𝐞𝐚𝐦 𝐚 𝐪𝐮𝐨𝐭𝐚. 𝐆𝐢𝐯𝐞 𝐭𝐡𝐞𝐦 𝐚 𝐦𝐚𝐩. Because people do not run harder when you raise the target. They run harder when they can see the finish line.

It’s that time of year…let’s completely deflate 80% of the sales organization in 2026 time of year! Most quota methodologies are probably destroying team morale Many sales leaders set quotas using last year's results plus a growth factor. "We did $50M last year, so we need $68M this year. Divide by number of reps." This approach assumes all territories and reps are identical. They're not. Some territories have higher market potential. Some have been farmed longer. Some have a better concentration of our ICP Some reps inherit hot accounts. Others get burned territories. Setting uniform quotas across different situations creates instant unfairness. High-potential territories get easy quotas. Challenging territories get impossible ones. The reps who need the most support get the most pressure. Better quota methodology considers: Market potential ➡️ What's the addressable market size for each territory? Account maturity ➡️ How long have these accounts been worked? Historical performance ➡️ What's the realistic baseline for this specific territory? Pipeline health ➡️ What's already in motion for next year? Investment level ➡️ How much marketing/SDR support does each territory get? The goal isn't equal quotas. It's the right quota based on the territory. Fair means each rep has a realistic path to success based on their specific situation. When quotas feel achievable, reps stretch for them. When quotas feel impossible, reps give up before they start. We just started implementing BoogieBoard for this exact reason for clients. Excited to see the potential results!

Want your AEs to self-source more of their own deals? Below are some incentive ideas. Mostly carrots (but a few sticks 😬). 1. Higher commission for self-sourced deals Increase commission rates for AE-sourced pipeline vs. marketing-sourced or SDR-sourced deals. Example: - Self-Sourced: 12-15% commission - Inbound/SDR-Sourced: 7-10% commission This makes it financially beneficial for AEs to generate their own pipeline. 2. Pipeline sourcing bonus Implement a quarterly bonus tied to AE self-sourced pipeline. Example: - $5K bonus for generating $500K in pipeline. - $10K bonus for generating $1M in pipeline. This rewards consistent outbound activity, not just closed deals. 3. Qualification incentives Pay a partial commission upfront when an AE self-sources and qualifies a deal (even before it closes). Example: - AE gets 1% of pipeline value upon an opportunity reaching a Stage 2 or 3 (e.g., meeting held + qualified). This encourages outbound efforts even if deals take time to close. 4. Minimum prospecting quota (with stick & carrot approach) Require AEs to generate at least X% of their own pipeline (e.g., 30-50%) to unlock accelerators. Example: - If an AE self-sources 40% of pipeline, they get accelerated commission (e.g., 20% higher) on all deals. - If they don’t hit the target, they lose access to accelerators or have reduced OTE. 5. Tiered quota adjustments based on self-sourcing Adjust AE quotas based on their pipeline mix. Example: - AE Sourced 50%+ Pipeline -> Quota stays at $1.2M. - AE Sourced <20% Pipeline -> Quota increases to $1.5M (forcing reliance on inbound/SDR). This naturally pushes AEs to take control of their own pipeline. 6. Team based incentives for sourcing & closing If your model requires AE/SDR collaboration, incentivize AEs to work outbound deals with SDRs. Example: - If an AE sources an opportunity and an SDR books the meeting, both get a shared spiff ($500-1K per deal). This prevents friction over lead ownership and keeps outbound motion strong. 7. SPIFFs for first meetings booked Reward AEs for setting and running their own first meetings. Example: - $250 per AE-booked first meeting (capped at 5 per month). - If they book 10+, they get an extra $1K bonus. This keeps outbound behavior consistent without needing long-term pipeline attribution. 8. “Outbound Multiplier” on larger deals If an AE self-sources a deal above a certain size (e.g., $100K ARR), they get a 1.5-2X multiplier on commission. Example: - $150K inbound deal -> Standard 10% commission = $15K. - $150K AE-sourced deal -> 20% commission = $30K. This drives outbound for higher-quality deals, not just volume. The ideas above aren’t just theory - they’re pulled straight from what’s actually working for the leaders of Sales Assembly member companies who have gone from asking nicely, to actually incentivizing their AEs to drive their own pipeline. You don’t grow a tree by yelling at it. You feed the roots.

3 things your VP of sales forgot to mention about comp plans. (This is how comp plans are really set with finance) 1. Quota to OTE ratio. The average AE is $75k base, $75k variable = $150k OTE (on track earnings) The rule of thumb is a 4-5X multiple on OTE to quota. Sometimes you might see 3-7x ranges. $600k - $750k would be the expected quota. This scales with enterprise reps. $150k base, $150k variable = $300k OTE. $1.2m - $1.5m quota. This is general board level benchmarking for efficiency, it's not based on attainment. Usually the multiple you end up with trends in the direction of historical performance of the team. 2. Cost of sale (%) This can vary greatly, but normally companies target 15-20% all in. Meaning the total commission dollars paid out on a new business deal is 20% or less. This includes everyones variable combined. BDR's, AE's, Mgr's, Dir's, VP's, CRO, etc. The biggest misconception about comp plans is that simple is better. No. It isn't. Unless of course you want to be paid less as a top performer without BDR's, Sales engineers, or Mgrs! Take a flat rate for that $150k OTE rep on a $600k quota. $75k / $600k = 12.5% 2.5% - 7.5% remains... and we aren't factoring in kickers, bonuses, and accelerators. The problem here quickly becomes under performers cannibalizing big % chunks of deals when they are only at 20% attainment. This is also why sales leadership will see an inflated target above the board plan. Adding some complexity here can really allow you to pay out your top 40% of reps in a way that recognizes their contributions with much higher $$$. Yes you pay for their added $$$ with the under performance of the bottom reps. This is NOT the only way to do it, but just one example of HOW to do to make the math work. 3. CAC Payback Period (Months) CAC Payback Period = Customer Acquisition Cost (CAC) / (Monthly Recurring Revenue (MRR) * Gross Margin) This one is played up as rocket science. It's super simple. Add up all sales and marketing costs (salary, benefits, tech, spend, commission, etc.) Take MRR (monthly recurring revenue) multiplied by gross margin aka how much money is left after COGs. Usually "good" in tech it's 80-90% gross margin. The target here is to have a 6 to 12 months "CAC payback period", meaning for every deal you do... the company breaks even on the CAC within 6 to 12 mo's. TYING IT ALL TOGETHER! If quota is lowered, but OTE stays the same, CAC goes UP! Can't doit. If quota is lowered, with some added complexity, OTE can stay the same. CAC stays flat. You can sell this to finance. The reality? Negotiating with finance shouldn't be us vs. them. It's a bit of science and art. It's a partnership. Science = we need to fit into the financial banding that maps to industry standards. The math is the easy part. Art = how do you create a plan that motivates and retains employees, while hitting the growth goal of a business, while staying under budget. Operating is hard.

It’s mid-February 2026, busy setting targets and quotas and trying to keep the excitement of “this is our year” alive with the sales team! Quotas feel tougher than ever. Sales cycles are becoming longer. Buyers and Customers are squeezing every rand and demanding clear ROI before even scheduling a demo or getting a proposal. Account Managers are juggling new AI tools, drowning in admin, and burning out fast. This sound familiar to all of you? I’ve been leading IT sales teams for more than 20 years through uncertain times, setting targets that looked aggressive on paper but realistic . The truth is, the old playbook of “just add 15-20% YoY and go” isn’t cutting it anymore. What actually moves the needle right now: 1. Data over gut feel — Review 2025 honestly before locking in 2026 numbers. What % of pipeline actually converted? Where did we lose deals ?Use that to build capacity-based quotas, not just top-down wishes from management. 2. Territory & account realism — Uneven territories kill morale and forecasts. We’re seeing better results when we balance by true potential. We also factor in ramp time for new hires, and are align tightly with marketing on plays and messages to market. 3. AI as a co-pilot, not magic — Tools are helping with forecasting signals and deal health and white space opportunities. 4. Protect your sales team . Burnout is the silent quota killer. Account Managers spending time on non-selling tasks can’t hit numbers hard. Simplifying processes, better coaching and transparent compensation plans make a massive difference. We’re not going back to easy buying cycles anytime soon. I believe the organizations that treat target-setting as a cross-functional, data driven strategy will pull ahead this year. What’s one thing you’re changing in your 2026 target setting process , if any? #SalesLeadership #ITSales #Salestargets #Quotas #iworkforaltron

Average skills. Crushed quota. Natural talent. Missed every month. I've seen this play out dozens of times. The difference almost every time? The crushers knew their numbers. The missers were winging it. This applies to you too leaders/mangaees/VPs! You have to know the numbers Here's what knowing your numbers actually means: If your goal is $200k and your ACV is $18.2k — you need 11 deals. If your close rate is 20% — you need to run 55 demos to get those 11. If your show rate is 76% — you need to schedule 72 meetings. That's not theory. That's your activity plan. 72 meetings scheduled. That's the only way 11 deals close at that math. THEN you need to do th same math around pipeline generation. Connect rate. Conversion rate, etc. That will give you your lead and activity targets. Most reps look at their quota and start working. Top reps look at their quota and build a plan. Massive difference. You can't hit a number consistently you haven't actually mapped. The best closers aren't the most charming people in the room. They're the ones who know their math. Do you know exactly how many demos and dials you need to run this month to hit your number? Not an estimate — the actual math.

I coach dozens of sellers making over 500K-1M/year, and there’s one thing they have in common which nobody talks about that’s foundational to their success: They have great comp plans! Each of these sellers has a high OTE (On-target Earnings), fair quota, and generous accelerators which allow them to get financially rewarded when they crush their number. So how do you know if you have a great comp plan which allows you to make life-changing money? In today’s video, I share everything you need to know about tech sales comp plans. This training includes critical information to maximize your income, including: - What are good OTE’s for SMB, Mid-Market, Commercial, Enterprise, and Strategic segments? - What is the quota range you should expect based on your segment? - What’s a great commission % in software sales? - What are accelerator bands and how do they work? - How much do you need to sell to make 500K-1M as an Enterprise AE? Here are a few of the top insights from the video: 1. The key to making 500K+ is the unique combination of a high OTE plus a low quota. This gives you an opportunity to blow out your quota and get into accelerators quickly, where the real money is made. 2.  Comp plans with a 5x OTE to quota ratio are highly favorable, 6x is much more common, and 7x is less than ideal. So if your OTE is 300K, a 1.5M quota is great, a 1.8M would be more common, and anything over 2.1M is less than ideal for making big money. Enterprise AE’s at large companies (Oracle, Salesforce, SAP) typically see 7x + ratios, since they have bigger deal sizes in that segment. I’ve seen clients with a 300K OTE and a 900K quota (3x ratio), which has incredible earning potential. I’ve also seen clients with the same 300K OTE and a 3M quota (10x), which becomes more challenging because you must sell 9M ACV to hit 300% of quota. Please note that I’m referring to growth quotas, not renewals. So if you work in a consumption model, just look at your growth number. 3. Most commission plans have accelerators that multiply 1.5x, 2x, and 2.5x when you overachieve. So if your base commission rate is 10%, that means you make 15%, 20%, or 25% of revenue based on the overachievement band that you’re in. 10% base commission is healthy, 15%-20% commission in accelerators is good, and anything over 20% is excellent. 4. The best comp plans have no commission decelerators. For example, anything over 200% will pay at the highest accelerator level. At larger companies, decelerators are more common, typically when you reach 200% of quota. This means that your commission rate goes down, which actually encourages reps to sandbag for next year once they reach the highest commission tier. Decelerators = demotivators. At the end of the training, I share a link to a free income planner to help you calculate how much you need to sell to make 500K-1M based on your own comp plan. Watch the full training here: https://lnkd.in/g_dptprk

Lower Quotas = Higher Revenue I've never seen this not be true. Yet most companies raise quotas in effort to increase revenue. The reason this is generally backwards is because people don't sell best when being squeezed like the juice of an orange. People sell best when they're comfortable and confident. People are comfortable and confident when their role is predictable and the goalpost never moves. People sell best when they're "crushing it" because their dopamine and serotonin receptors are firing off like the fourth of July, which drives them to produce more (while enjoying it). On multiple occasions I've tested reducing quotas by 20% and have seen each time roughly a 20% increase (or more) in average revenue per rep. Of course, it's not as simple as a tweak in the numbers. There's leadership that goes behind it to make it work. But generally speaking, raising quotas in hope of higher revenue is usually a fool's errand. Raising quotas is also often done in effort to reduce compensation with the expectation that it won't disrupt performance. This is the kind of strategy a CFO brings to the table, but it's a short-sighted decision that leads to the ultimate degradation of team momentum, engagement, and sales performance. Lower those quotas and inspire your team effectively. You just may find the one true sales hack that works. WDYT?

I've hit 100-250% of quota for 13 straight years. Not because I'm some sales genius. Because I do 5 things that most reps completely ignore. Last week I was talking to a rep who's struggling. Good guy, works hard, knows his product inside and out. But he's at 67% of quota with 3 months left in the year. His problem? He's doing what everyone else does. Aiming for quota, hoping for the best, and praying his "big deals" close. That's not a strategy. That's gambling. Here's what actually works: 1. Stop aiming for quota. Sounds backwards, right? But quota is just some number your company made up. What's YOUR number? The one that changes your life? That's what you should be chasing. 2. Most reps have no pipeline diversity. They've got 3-4 "monster deals" and if one falls through, they're screwed. Spread your risk. Build a pipeline that can handle losses. 3. There are only 3 ways to make more money in sales. More activity, better close rates, or bigger deals. Most reps just spam more emails and wonder why nothing changes. Work on all three levers. 4. Break everything down into bite sized pieces. $1M sounds impossible. $4,167 per day? That's just a couple decent calls. Your brain can handle daily goals way better than annual ones. 5. Every goal needs daily activities. "I want to hit 200% of quota" isn't a plan. It's a wish. What are you doing TODAY to make that happen? How many calls? How many demos? Work backwards from your goal to your daily actions. The biggest mistake I see? Reps who work harder instead of smarter. They're making 100 calls a day to unqualified prospects. They're chasing deals that were never real. They're hoping instead of planning. Stop hoping. Start systematizing. I break down all 5 strategies with real examples and math in the carousel below. These aren't theory... they're exactly what I used to consistently crush quota year after year. Your comp plan will thank you. — Sales Leaders! If you're running a team and want us to help diagnose your revenue leaks and get your reps crushing it, book a call here: https://lnkd.in/ghh8VCaf

2021 VP of sales: We can hit the number, just give me 10 more sellers. 2025 VP of sales: Hiring 10 more reps would screw everyone over. Here’s why this mindset has shifted: The VP is now expected to hit the number with 10 less reps even though the original plan was built with those 10 budgeted. The heads came out of the plan, but the target stayed the same. Here’s why top VPs are embracing this change: There's fewer team members to manage. Each will get more leads. The business will be more efficient. CAC will be better. It will be easier to retain top performers. Also, with a higher ratio of top performers: The lead conversion rate will be better The close rates will also be just a bit better. The average deal size will also be just a bit better. They will each have a larger book of accounts, which means… They’ll self source more opportunities They’ll be more satisfied with their role overall. (to be clear, metrics like close rates, opp creation will be better because of a have a higher quality of rep vs. a diluted, larger team). More of them will hit quota (as a %). The VP of sales will generate MORE bookings. It’s an interesting thought exercise, but it’s more than that. If you’re a director of sales, VP of sales, or want to be one, you need to know this type of model inside and out. You need to be able to create it. You need to be able to explain it. You need to be able to defend it. Then when you’re in the seat, hopefully you can pull off what a lot of us in prior VP sales generations couldn’t do too well: Convince the CEO, CFO, and boards not to over-hire sales team members… Over-capacity has been a key pain point for decades for sales leaders. Check the sheet below and let me know which assumptions you'd challenge and why? A big one is a constant state of inbound demand. If the org can push that up meaningfully, THEN and only then really the org should consider growing headcount. As the head of sales, your job might seem harder with less reps. But it just comes with the territory. Check salaries, OTE, quota attainment, culture, reviews and more for 13,000+ companies: https://lnkd.in/edndxAKN