Back to Basics: How to Set Good Sales Quotas

Posted by Chad Albrecht on Tue, Oct 21, 2014

In prior Back to Basics blog posts, we have walked through how to establish pay levels, pay mix, and the incentive plan design. But many plan designs are tied to performance vs. sales quotas and, as any salesperson will tell you, the plan design is only as good as the quota that goes with it.


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Back to Basics: Incentive Compensation Plan Periods and Payout Frequency

Posted by Chad Albrecht on Thu, Oct 02, 2014

The majority of companies follow an annual incentive plan period for salespeople.  This is likely for multiple reasons.  First, executive compensation and broad-based compensation programs – two additional categories of compensation programs – are almost always annual.  For consistency, companies place salespeople on annual plans, as well.  Second, most companies have an annual business planning process and annual incentive compensation plans and goals tie in nicely with this planning process.


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Back to Basics: Calculating Your Incentive Compensation Plan’s Payout Formula

Posted by Chad Albrecht on Tue, Sep 16, 2014

In the last 2 blog posts, we discussed metrics to include in the incentive compensation plan and the plan types that you should use. Now, we turn to the actual calculation of the payout amount.


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Plan Design Done? Don’t Forget About the Quotas

Posted by Chad Albrecht on Thu, Dec 05, 2013

Most sales compensation leaders are feeling good about where they are in the 2014 sales incentive plan design process. The management team is finalizing the design, developing the rollout plan and expressing confidence that the plan is aligned with the strategy.

But inevitably, if reps’ incentive pay is based at least in part on attaining their quota, when these plans roll out, the field will not be satisfied until they see their quota.


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Can 60% of Your Salespeople Really Hit Quota?

Posted by Steve Marley on Thu, Sep 05, 2013

When I help companies set quotas for their salespeople, project sponsors—typically sales leaders and compensation designers—sometimes tell me their objective is to have at least 60% of their people hit quota. I believe this comes from a commonly published perspective that states 60 to 70% of your salespeople should hit their quota if quotas are to be motivational.

While the motivational aspect of having 60 to 70% of your salespeople hit their quota is clear, the math behind the statement is not.


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