2014 sales territory and quota planning

© Copyright 2013 The Sales Management Association.

Sales Management Association Webcast

12 September 2013

Presented by

Territory and Quota Planning

Checklist: Preparing for 2014

#SalesTerritory

http://www.linkedin.com/in/mattzink

http://www.linkedin.com/pub/derrick-russ/1/894/6b8

https://twitter.com/CallidusCloud


About The Sales Management Association

Slide 2

© 2013 The Sales Management Association. All rights reserved.

A global, cross-industry professional association for sales

operations and sales management.

Focused in providing research, case studies, training, peer

networking, and professional development to our membership.

Fostering a community of thought-leaders, service providers,

academics, and practitioners.

Learn More: www.salesmanagement.org #quotaplan

http://www.salesmanagement.org/

Today’s Panelists

Slide 3


#quotaplan

#SalesTerritory





© Copyright 2013 The Sales Management Association.

Sales Management Association Webcast

12 September 2013

Presented by

Territory and Quota Planning

Checklist: Preparing for 2014

#SalesTerritory





CSO Challenges

Context: Big gaps for the Chief Sales Office to close…

• Talent, Incentive Compensation, Forecast %, Lead Conversion have not

improved over the last 5 years

• Organizations are not very good at hiring the right sales people (43% of CSOs

believe they need to improve their ability consistently hire sales reps who

succeed at selling)

• Significant difference is performance (20% of sales people bring in 60% of the

revenue for their firm, coupled with the fact that anywhere from 33% to 51% of

sales reps are not making quota)

• Approximately 22.5% of sales people are leaving organizations each year –

recurring revenue drain

For Chief Sales Officers, delivering growth has become the primary challenge

for organizations and the Selling agenda has become increasingly complex…

#SalesTerritory

Slide 5 Copyright © 2013 Accenture. Used with permission by the Sales Management Association. All rights reserved.

Sales Effectiveness

Given revenue pressures, more CSOs are focusing on improving

areas related to quota and coverage

Related to Quota & Coverage

#SalesTerritory


CSOs are seeing their traditional levers not delivering traditional results…

• Influence driven strategies. The challenge is “influence” – Customer and

Influence Driven Interactions

• Pricing/promotions /Incentives deliver less durable lift, easily matched by

competitors and difficult to implement due to collaborative challenges with

customers. Need for Spend Optimization

• Variability Reduction Sales Processes with large variations are causing

unpredictable results, lack of quota attainment and inefficient execution

• Talent Dilemma - Aging workforces, lack of talent management discipline

and investments are driving 70% to 80% talent gaps

…while they try to capture new growth potential of disruptive forces.

• Digital and mobility are catalysts to fundamentally re-architect the routes-

to-market, the customer interaction processes

• Convergence of marketing, sales and service to speed responsiveness

and capture new customer segments and global markets

• Customer analytics are moving beyond isolated optimization to E2E value

chain optimization e.g. Digital Merchandizing,

• Cloud/SaaS solutions offer rapid, and more widespread solutions to users

CSO Complications #SalesTerritory


Typical Quota Process

The typical process is top down, with bottom-up input from the field

• Quota totals generally must equal the forecast, but over-assignment is common

• Bottom-up input is less data driven and more qualitative

• Hierarchies are in place before goals are cascaded and rarely adjusted

• Processes differ by business unit, geography and role and are rarely documented

• The most common quota management tool is Excel

• Forecast science • Technology limitations • Inadequate governance and process • Over and under assignment policies • Reliance on historical performance • Intuition stacking • Static hierarchies • Rigid / forced interlock • Opportunity disconnect from forecast • Gaming & agent influence in goal negotiation • Quota frequency

FORECAST & GOAL LAYERS INPUTS QUOTA QUALITY INFLUENCERS

#SalesTerritory


Examining Quota Quality

Quota Attainment Is Often More Volatile Than Perceived

Total population attainment distribution Attainment distributions by role

1.7% of the population sustains top 20% attainment over three periods (44 / 2,500)

The average difference between Hi & Low attainment of >50%.

High Attainment Is Rarely Sustained

#SalesTerritory


• Attainment variance and chance outliers related to quotas and coverage typically drive ~8% in excess cost and impact performance management

• Why the variance and impersistence? – Resource imbalances

– Over / underserved territories

– “Success tax”

– Gaming (Boom-Bust)

– Biases due to goal size, product type, location, role, level, manager, channel, etc.

Examining Quota Quality #SalesTerritory


Examining Quota Quality

P1 P2 P3 P4

80th-100th 40% 42% 47% 46%

60th-80th 53% 51% 54% 52%

40th-60th 55% 58% 55% 53%

20th-40th 52% 53% 50% 52%

0-20th 50% 46% 44% 47%

PERFORMANCE

PERCENTILE

GOAL PERCENTILE

Goal Size As A Key Contributor To Attainment

• Large goals present higher certainty

• Small goals present higher variance – but greater opportunity

• The top quintile typically has the lowest average goals

#SalesTerritory


5 Keys to Quota Success

1. Opportunities: Lead with bottom-up forecasting of known

and potential opportunities

2. Methodology Alignment: Align forecasting and allocation

methodologies with RTM/GTM

3. Rules Based Decision Making: Leverage minimum quotas,

coverage ratios and algorithms to allocate goals

4. Rebalance: Move resources between accounts and

territories based on opportunity to ensure optimal coverage

5. Measure and Correct: Make corrective action based on

reporting and analytics

Keys to Quota Effectiveness #SalesTerritory


How Technology Can Help

• Standardization & Automation

• Data Analysis for Decision Making

• Enablement

• Tracking & Monitoring Through Data Analysis

#SalesTerritory

Standardization and Automation

• Systems Can Define & Support

Standards

• Must be Flexible

• Support, Not Inhibit, Change

• Automation

• Workflow Processes

• Communications

• Supports Rapid Change

#SalesTerritory

Data Supported Decisions: Bring

different sets of data together to

support the decision making process.

• Historical data to support recurring

revenue, account retention targets

• Market data – market share, addressable

market, product penetration – to support

new business and growth targets

• Pipeline data from CRMs to support both

• Training and coaching to match capabilities

Data Analysis for Decision Support

#SalesTerritory

Move the Target Setting Closer to

the Potential

1. Assign Targets to Accounts

2. Link Accounts to Territories

3. Assign People to the Territory

Enablement

#SalesTerritory

Performance Monitoring

• Not just Attainment

• Ranking

• Competition

• Measure Performance of

• The Territories

• The Individuals

Tracking and Monitoring Through Data Analysis

#SalesTerritory

Questions and Discussion

Slide 18


Enter your questions in the

“Questions” box on the right

hand side of the webinar

application window.

Did we run out of time before we got to your

question? Presenters can follow-up with you

via email. Feel free to submit more questions if

you’d like an offline response.

#SalesTerritory




2014 sales territory and quota planning

Business

sales management

examining

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quota planning

quota attainment

goal size

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data analysis