quota allocation

What An MBA Didn’t Teach You About Sales

The sales profession is challenging. You need to work hard at it to succeed. You need to learn from the best. You need to improve your skills continuously. If you think you can sell since you are a hit at parties and have a lot of friends, you may soon find that you are a failure as a salesperson. Blunt truth:

because the sales profession is so hard, you have to focus on doing everything in sales very well, or you will be considered a failure.

I call this blog, Skinned Knees because I try to relate all of the learning that I have done over the past 4+ decades (while skinning my knees in the learning process).

I hope that you learn from my mistakes so that your business will grow!

Your Sales Compensation Plan Is Quietly Managing Your Sales Team

by Sean O'Shaughnessey

A salesperson reaches the final week of the quarter with a major opportunity ready to close. Legal has approved the agreement. The customer is prepared to move forward but asks for a 15 percent discount.

The salesperson understands what the discount does to margin. So does the sales manager. Finance knows as well. Yet the salesperson is measured on revenue, the manager needs the deal to make the quarterly forecast, and neither is directly rewarded for protecting margin.

The discount is approved. The deal closes. The commission increases. Everyone celebrates.

The company may have just paid someone extra to give away its profit.

No one acted dishonestly. The compensation plan worked precisely as designed. That is the problem.

Compensation Is a Management System

Most companies treat sales compensation as an administrative process. Leadership creates a plan, finance calculates payments, and managers resolve disputes when the numbers do not match expectations.

That view misses the strategic role compensation plays.

A compensation plan influences which customers salespeople pursue, how aggressively they discount, whether they favor one-year or multi-year agreements, how they collaborate, and whether they prioritize new business, renewals, margin, or market share.

What the company pays for will eventually outweigh what its leaders say they value.

Many sales leaders inherited plans that accumulated years of exceptions, temporary accelerators, regional variations, product overlays, split-credit rules, and special arrangements. The resulting spreadsheet may be technically functional while being strategically incoherent.

The warning signs are familiar:

Salespeople maintain private spreadsheets because they do not trust their commission statements.

Managers spend time resolving payout disputes instead of coaching pipeline.

Quotas are created by adding a percentage to last year’s number rather than analyzing territory potential.

A handful of top performers benefit from every contest while most of the team decides the competition is irrelevant.

These are not motivation problems. They are design problems that consume selling time, reduce margin, and erode trust.

Read the rest of the article…

Assign Selling Quotas That Drive Growth

by Sean O'Shaughnessey

A selling quota is the mechanism that turns a company’s revenue goal into an executable operating plan, with named owners, measurable commitments, and enough resilience to withstand real-world pressures. If you only set “the company number” and call it a plan, you have created a budget aspiration, not a revenue system.

Most leadership teams already know their revenue target. The gap is translation. Quotas are that translation. They convert the budget into individual accountability, coverage clarity, coaching focus, and cross-functional credibility. Without individual quota ownership, goal attainment becomes a matter of luck, and luck is a poor operating model.

The real problem quotas solve

A company revenue goal answers one question: “What do we want to achieve?” It does not answer the questions that actually determine whether you get there:

Who owns which portion of the number?
Where will the revenue come from, specifically?
What activity and pipeline levels are required by person, by segment, by time period?
What happens if the plan takes a hit from turnover, lost deals, or market friction?

Quotas exist to clarify those questions. They put names next to revenue responsibility. They make coverage visible and discussable. They surface whether the business has sufficient sales capacity to achieve the stated goal. That is why quotas are a growth tool, not an administrative exercise.

A quick reality check on adoption

In a recently published survey, only 28% of small and mid-sized businesses assign individual sales quotas. If that statistic is even roughly correct, most SMBs are trying to grow without translating the budget into individual commitments.

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