Thomas, setting sales quotas is a bit like setting art work quotas or scientific discovery quotas. When entering the realm of motivation, creativity, imagination, relationships and those tricky abstract things, setting quotas is problematic, which is why you ask the question.
Having spent a few years selling things, quotas didn't mean much to me other than as irrationally based measuring sticks to determine minimum performance, usually of a lowest common denominator type.
My laziest year ever, when I actively tried not to get new customers, while keeping all my existing customers happy and maintaining my personal reputation with anyone I dealt with, I had a quota-busting year, got bonuses and stuff and quit the company. I took Fridays off, goofed off most days and generally put my mind to other things.
In my last half year in Canada, having told my boss and his boss that we'd be going back to NZ, I worked all the time, got new customers and a really good one in the last few days, had everything going well. He [the boss's boss] initially wondered whether he should fire me when I told him we were planning on going home in a few months. He said that people usually slacked off once they'd decided to quit. I explained that I thought I'd give him a chance to plan for somebody else, rather than drop things at the last moment, pointing out I didn't need to tell him I was going to leave and that I wouldn't be slacking off, obviously. I enjoyed what I was doing and was well paid and treated. I give bang for buck.
The difference between the two quittings had nothing to do with payment, incentives, quotas or anything like that. It was just the way I'd been treated by the two managements, what I thought of the companies and what I wanted to achieve.
When BP management wanted to bring in quotas for sales engineers, I argued against it at a conference. The attitude from some people [in management] was that I was against quotas because I doubted I'd be able to perform. At the end of the year, when we had another conference, it was me who was saying we should review quotas and results to see how we all went. Guess who had done best compared with quota.
Similarly when sales engineers were given the job of selling LPG [in big tanks mainly for vehicle fuel, but other uses too]. I'd sold half the facilities at the end of the year.
This isn't idle boasting. You hit a hot button, so I thought I'd give a little rant and support that I know a bit about how to do it. My point is look to motivation, respect, integration of the teams trying to get results, the sort of person you hire, the training and support they get. That's where results come from, not quotas. An enthusiastic person doesn't need quotas, they just enjoy performing, like any achiever does.
Irwin Jacobs isn't given a quota - maybe he gives himself one. Albert Einstein wasn't on a quota system when he came up with his Theory of Relativity and the Gravitational Constant, which is entertaining people right up to now. Weekend golfers hacking away, trying to break 10 for a handicap are wanting to see how good they are. Infants taking their first steps don't need reward, quotas or anything. They just want to go and fulfil internal drives.
However, being of scientific bent, and acknowledging the cultural basis of business in fact, if not Utopia, I like things measurable and rational, including art and scientific creativity, so quotas are a great idea too. Perhaps not quotas, but results measurement anyway [total sales and profits at the end of a year is not a pass or fail business, it's degree of success]. But throwing a few numbers on a piece of paper and calling them a quota is the usual approach, because managers are busy and fussing around with microscopic detail to set quotas is more effort than it's worth [to them]. Sure, they try to do it through a reasoned approach and usually get within a bull's roar of a sound position. But over 10 years of being out on the front edge in two countries and 3 companies, quotas are never more than an approximation with a greater or lesser degree of sense.
Which doesn't tell you how to do it, but there are some thoughts anyway.
Be quick, it's nearly 2004 and budgets must be due!
Mqurice
PS: On reviewing this, I suppose I'm making a distinction between quotas and goals or objectives, which are necessary. |
