Set Better Quotas!

Quota are used in most sales compensation plans, but few companies are satisfied with them. What is wrong?

Bad quota setting habits abound. The main reason is that very little scientific expertise has been applied to the subject ... until now.

This course takes you through a simple yet powerful process for setting quotas. It describes the four most important methods for setting quotas, and then shows you how to determine which ones are best for your situation.

Uniform growth quota: all quotas apply the same growth percent.
Relative growth quota: growth is allocated in proportion to prior year growth contribution.
Market potential quota: growth is allocated in proportion to each territory's unpenetrated market.
Sales forecast quota: forecasting methods are used to create forecasts, which are then used to set quotas.

This course gives you powerful tools for setting quotas. For example:

Quota Tool: every essential aspect of the course is integrated into Quota Tool. Managers add the required data, and Quota Tool makes all the necessary calculations. Managers then review the output and make adjustments as they see fit.

Quota Error: This course introduces a simple and effective way for measuring quota error. It is called Absolute Quota Error (AQE). It is an essential tool for testing alternative quota setting formulas.

If your quotas have low credibility in the company, or if they are not viewed as logical or fair by your salespeople, this course is for you. It is divided into ten chapters. The minimum viewing time for the course is 1 hour 15 minutes. More time is required to complete the quizzes and exercises.

Chapter 1 Overview: In the Overview, we set context, define the four roles of quotas, and outline the quota setting process. (Quick view: 5 min.)

Chapter 2 Distributions: In Chapter 2 we define frequency distributions and identify which type of quota distribution is best. (Quick view: 4 min.)

Chapter 3 First Bad Habit: In Chapter 3 we identify three warning signs that quota setting has gone awry. Then we describe the first bad habit: using quotas as a way to give positive or negative feedback through easy or hard quotas. We identify common rationalizations for this bad habit, and expose their faults. (Quick view: 6 min.)

Chapter 4 Database: In Chapter 4 we specify what is needed in a quota setting database. (Quick view: 7 min.)

Chapter 5 Quota Math: In Chapter 5 we examine two basic ways to set quotas: uniform growth and relative growth. Every person involved in quota setting needs to understand the strengths and weaknesses of these two methods. (Quick view: 5 min.)

Chapter 6: Quota Testing: In Chapter 6 we describe: the need for quota testing, how to do a quota test, how to measure quota error to find the best quota setting method, and how to further analyze the test through charting. Quota testing is a new concept that can help you increase quota setting accuracy. (Quick view: 8 min.)

Chapter 7 Second Bad Habit: In Chapter 7 we define over-assignment, or quota padding. Then we expose its various flawed rationalizations. We have yet to find a valid case in favor of over-assignment. (Quick view: 8 min.)

Chapter 8 Third Bad Habit: In Chapter 8 we define market potential and explore the various problems associated with not using market potential data during quota setting. (Quick view: 6 min.)

Chapter 9 Quota Tool: In Chapter 9 we integrate the essential ingredients from the prior eight chapters to create a powerful, yet easy to use quota setting tool. All managers, or those who are assisting them, need do is assemble the requisite data. From there, managers can review the initial quotas generated, make their adjustments as needed, and submit their recommended quotas for review. (Quick view: 14 min.)

Chapter 10 Implementation: To conclude, we describe the fourth bad habit (releasing quotas late), provide a five-step program for effective quota communications,and describe key administrative issues and best practices for resolving them. (Quick view: 9 min.)

Each chapter includes: a quiz, a downloadable chapter copy (pdf), and a glossary of terms used.

The course provides a total of 10 exercises. They help you master the material, identify where you can improve your quota setting process, and give you actual Excel files to adapt for your own quota setting efforts.
  • Chapter 1 Introduction
  • Chapter 2 Quota Distributions
  • Chapter 3 First Bad Habit
  • Chapter 4 Database
  • Chapter 5 Basic Quota Math
  • Chapter 6 Quota Testing
  • Chapter 7 Second Bad Habit
  • Chapter 8 Third Bad Habit
  • Chapter 9 Quota Tool
  • Chapter 10 Implementation
Completion rules
  • All units must be completed
  • Leads to a certification with a duration: Forever