Why Your Focus On Quota Is Killing Revenue Growth

In this article, Nancy Nardin observes that the majority of companies live and die by quotas. They use quotas as a measurement of performance, a way to evaluate the company’s health. Nardin, however, suggests that by focusing solely on quotas, companies are acting like a magician who distracts his audience with one hand while he conceals the quarter with his other hand. The company loses sight of understanding sales productivity when it focuses on the numbers only. Instead of calculating a mathematical equation to get an idea of what to expect in revenue, Nardin suggests two questions to ask ourselves.

Are your reps generating as much revenue as they could be? The answer is most likely no, and that answer can’t be calculated with a quota. Nardin says you can’t increase sales productivity without assessing how salespeople spend their time. What would happen if you could increase the time salespeople spent communicating with prospects from 35% to 50%? Your salespeople could spend these additional hours per month talking to more prospects or better planning and preparing for each pitch.

What do salespeople do with 65% of their time? Nardin pulls from the legend of UPS to explain how to get more out of your salespeople’s time by understanding how that method can be used today. UPS realized it could save route time and fuel if drivers only made right-hand turns.

Find out what tasks or processes are consuming too much time in your company. Uncover extraneous tasks that may be keeping your reps from spending more time with real prospects. Ask your salespeople where they lose time, and improve Sales Productivity by genuinely considering their input.

Quotas may be important, but the real key to growth is understanding and assessing Sales Productivity. Make the commitment to find out how to free up more time for your sales force.

What do you think would happen in your organization if you started asking these two questions?