Quotas are Dead: Why giving your salespeople quotas will have the opposite effect of hitting your goals.

#RIPQuotas.

Quotas are dead. Yep, I said it. Dead and gone. As they should be. If you’ve been in sales, or sales management, for a number of years this statement could give you a panic attack or make you feel liberated from the tyranny of budgets.

I've run sales teams for the past 13 years, without quotas, and have exceeded my budget numbers for 13 out of 13 years (in both up and down markets). One of the main contributors to that track record is, you guessed it: no quotas.

Let's talk about what quotas really are. Quotas are an expectation a manager determines and gives to a sales rep so that they know how much revenue they have to bring in for the company (for the month, quarter, or year) so that they can fill in the blank ______________ (keep their job, earn a commission, hit a bonus, etc.).

The problem is, that number is my number, management's number, the company's number. It's not the salesperson's number.

What motivation does a salesperson have to hit your number? It's not zero, but it tends to be pretty weak.

What if you kept the "budget number" to yourself (which roles up to an annual number that you, or someone else, decided on during the budget process)?

What if you asked your salesperson what their number was? Then, you asked their "why?"

Nine out of 10 times the salesperson (and collectively, the team) will come up with a larger number than my "budget" — and it's their "why" that makes it happen over the course of the next year. 

Sales is hard. Understanding each salesperson's motivation for the incentive (or commission) you’re providing to hit a number is critical to managing a sales force. When you understand their "why," your little budget number becomes obsolete and insignificant relative to the personal motivations salespeople have to hit their own numbers. 

A few examples of personal "whys":

• Paying for my daughter's college because I promised her she could go anywhere she wanted.

• Saving up for a down payment on a house so my husband and I can start a family.

• Maxing out my 401(k) every year because I don't want to be stressed about my future finances like my parents are right now. 

Are you getting it? Your quota means nothing to a salesperson. And if you have good salespeople that you help set goals that are personally significant to them, they’ll work harder than you can imagine to hit their goals.  You can then make the basis of your work with them to hit their personal goals, and when you do that, you smash your budget. 

When you give salespeople quotas, you’re asking them to help you fulfill your obligation to the company by recording a number each month, or quarter, and in doing so you almost doom your team to not hit them.

Quotas are dead. Guide your salespeople through a goal-setting process and let them surprise you with how motivated they are to hit their own numbers, based on their individual "whys." It will almost surely be bigger than your number.

#RIPQuotas.