“How you sell matters. What your process is matters. But how your customers feel when they engage with you matters more.” – Tiffani Bova

Selling is a mix of art and science. It’s a skill that makes perfect sense if implemented carefully. It impacts a company’s revenue, growth and employee morale in general. That’s why it’s important to implement realistic sales goals, sales targets and sales quotas. Let’s go one level deeper to understand the type of quotas and how they are implemented in an organization.

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Let's talk about the most common sales quotas

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‍Forecast Quota

As the name suggests, a forecast quota is the forecasted or predicted amount of money that an individual, team or company will make over a set time period. It’s a good statistic to keep track of because it shows your performance and growth. Forecast quotas can help you understand your business and predict if targets are going to be met or not and when.

• Example: Maria makes $5,000 in Month 1. She needs to increase her sales by 5%. Her forecast for Month 2 is therefore $5,250

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Profit Quota

Typically used by companies that sell exclusively high value products. Usually there are profit based targets. Profit quotas can assess if this will be met or not. Additionally profit quotas take into account the whole sales process but are independent of product volumes. This allows this model to solely focus on the money coming into the business by a particular team or individual.

• Example: Tim and Maria both sell designer bags. Tim sells 50 bags for $100 each making his $5,000 target. Maria sells 10 bags for $500 each, also making her the same target. Both meet their forecast targets but have different profit quotas as the bags were originally sourced for $75 so Tim made $1,250 and Maria made $4,250

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Volume Quota

The reverse of profit quota is volume quota. Instead of having monetary targets, there are volume based targets, i.e. sell 150 items in the month of July. This model works well for businesses with fixed price items so that the money side of things is consistent across the sales reps.

• Example: If Tim and Maria had volume quotas, Maria sold only 10 bags and Tim sold 50 bags therefore Tim outperformed Maria even though she actually made more profit. Volume quota only works if the price is fixed or it can lead to inaccurate data

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Activity Quota

Activity quota is the go-to model for businesses with longer sales cycles and/or fewer sales overall. This is because it focuses on the activities that are taken to get to the sale, rather than the sale itself. Activities recorded tend to be scheduling meetings, taking/making calls, email correspondence etc.

• Example: Maria obviously made more money, however, if you were to track her activity quota maybe she spent more hours getting those sales than Tim did to get his. By focussing on an activity you can see the time that goes into a sale

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Combination Quota

Companies find value in using a combination of those mentioned above. Mostly an activity quota and whichever other quota suits your business model the best. So as an example if a sales team is selling set price items, you’d be able to set targets for the number of meetings booked and volume sold per month.

• Example: Tracking the profits and activity for Tim and Maria makes the most sense. Profit quotas give an overview of who made the most money and activity quotas show how much time (and therefore money) was spent to make that profit

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Now you know about common sales quotas and where they are used, learn how to set a realistic sales quota here.

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Flyte can help sales people achieve their quota by improving their productivity by >30% through automated call notes. You should focus on the conversation without worrying about tracking specific details or manually updating your notes in the CRMs. Not only that, you get individual call insights such as talk time, call sentiments, engagement and clarity, inquisitiveness so you understand the call quality and where clients have objections or questions.

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So you are ready to exceed sales targets? Track call notes automatically and learn from your previous client conversations!

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Book a demo now by clicking here and try Flyte for 30-day free trial!

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Keywords: sales goals, sales pipeline, conversational AI, aggregated analytics, customer insights, product insights, executive decisions, call recording