LeapComp - Sales Performance Management Blog

The Alexander Group recently completed their 2009 survey on sales quota. David Cichelli notes that the number #1 question they are being asked during this uncertain economic market is “what are people doing with sales quotas?”

As a reminder, simply put, a quota is a sales goal assigned to the sales force. The higher the quota is, the more ‘widgets’ an employee must sell in order to earn or exceed the expected market rates.

The press release announcing the survey results mentions:

While in a normal year, less than 5% of companies would be making across the board sales quota adjustment, the Survey found that 50% are adjusting quotas to match market realities. The other 50% are either: 1) doing fine and don’t need to make adjustments, 2) going to wait before making any adjustments, or 3) planning to let their sales personnel “suffer/participate” with the rest of the company personnel now being subjected to no pay raises, layoffs and curtailed expenses.

Here are the highlights I find most interesting:

58.02% of the sales departments were assigned a 2009 sales objective greater than 2008 actual sales results.

Companies were optimistic about the economy at the time quotas were set.

At the end of the first calendar quarter, only 29.24% of the reporting sales departments are reaching their year-to-date objective. And, at this time, only 58.97% expect to achieve their 2009 sales objectives.

The economy did not recover as fast as anticipated. But…

37.8% of all sales personnel are achieving sales quota on a year-to-date basis.

So it might not be so bad. And…

68.40% will not make any across-the-board changes to sales quotas. 15.09% will decrease sales quotas and 4.25% will increase quotas.

The Alexander Group notes that in a normal year, about 5% of companies are expected to adjust their quotas ‘across-the-board’. In 2009, if this survey is representative of the general market trends, we expect almost 20% of the companies to adjust their quotas across the board, and another 30% to adjust some of their quotas.

The executive summary is available here (registration required).