Beyond Sales Quota Achievement: A Smarter Approach to Sales Performance Measurement

The Shift in Sales Performance Measurement

Professional selling has evolved — but how we measure sales performance hasn't.

Most organizations still rely heavily on revenue vs. quota to measure salesperson performance. It's simple and objective, but it's also incomplete and can lead to brand-impacting behavior.

What the Data Shows

A recent study indicated that 100% of the sales leaders interviewed from Canada, USA and the UK use revenue vs. quota to measure salesperson performance. However, when asked if they would use the same approach to identify their top 5 salespeople, no sales leader agreed.

Why the apparent contradiction? Many sales leaders intuitively understand the potential impact of only considering financial outcomes, such as revenue to quota, in evaluating performance. For example, one sales leader observed:

"They [the salesperson] may be selling machines but they want you to do their paperwork and clean up their messes… and they leave broken bleeding bodies in their wake."

Far too much emphasis is being placed on the outcomes generated by salespeople, rather than how those outcomes are achieved — and this is causing problems. One needs only to read the business press to find articles about salespeople acting in less than customer-friendly ways such as aggressive up-selling, misrepresenting their company and their products, and even fraud.

What Top Sales Leaders Actually Do

Leaders use:

• Objective measures to track results and compensation
• Subjective measures to understand the story behind the results, assess skills, and provide insight in support of coaching conversations

Example: A sales rep hits quota but damages relationships — most leaders would not rate them highly.

Why This Matters More Than Ever

Reconsidering your performance measures has never been more important. As products have become more complex, sales cycles have gotten longer, frequently crossing budget periods. This has made financial outcomes problematic as measures. In addition, while quotas appear to be solid objective measures, the fact is that they are highly subjective, because the quota-setting process is highly subjective, particularly for new products or in highly volatile markets where historical trends provide little guidance.

Revenue to quota results also provide very little support for supervisory coaching. Effective sales coaching requires rich insight into how selling is being undertaken. While financial outcomes indicate areas of potential concern, they offer nothing to help understand what the problem is and how it might be corrected.

Finally, the expectations of professional salespeople continue to expand. We now look to salespeople to prime competitive intelligence gathering and lead a team that co-creates value with the client. But these activities are not captured using financial outcomes — and good performance measures need to adequately represent the activity they are measuring.

What Sales Leaders Should Do

1. Combine objective and subjective metrics. A hybrid approach is necessary as neither objective nor subjective measures are perfect, but together they let you triangulate what happened and why, ideally measuring the effectiveness, efficiency, and competence of your salespeople.
2. Align metrics to purpose. The same metrics the organization needs for compensation purposes are likely not the same ones needed for insightful coaching discussions.
3. Design for insight, not simplicity. While choosing 1 or 2 objective measures might seem straightforward and reasonable, often this simple approach leads to incorrect performance conclusions. Even a broken clock is correct twice a day.

Bottom Line

Revenue to quota tells you what happened. It does not tell you why.

Performance without context is misleading.

The following provides a framework for selecting an integrated set of objective and subjective measures of salesperson performance.