Dear SaaStr: What Quota Should I Give to my Enterprise Sales Reps?
For enterprise sales reps, quotas typically range from 3x to 5x their fully burdened on-target earnings (OTE). This means if your rep’s OTE is $200K, their annual quota should be somewhere between $600K and $1M in bookings. The exact number depends on your deal size, sales cycle, and how mature your sales process is.
Here’s how to think about it:
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Smaller Enterprise Deals ($25K-$50K ACV): Reps will likely struggle to close more than $400K-$600K annually. These deals require a lot of effort for a relatively small return, so quotas should be on the lower end.
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Mid-Sized Enterprise Deals ($50K-$100K ACV): A $700K-$900K quota is more reasonable here. Reps can close fewer deals but still hit their number because the deal sizes are larger.
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Larger Enterprise Deals ($100K+ ACV): For big-ticket deals, quotas can go up to $1M or more. These reps are typically working fewer deals but with much higher value, so the math works out.
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Adjust for Ramp Time: If your reps are new, give them a ramp period of 3-6 months where their quota is lower. For example, if their annual quota is $800K, you might set it at $200K for the first quarter to give them time to build pipeline.
- Be Flexible in The Very Early Days: Before $1m ARR especially, be more flexible. It may be enough if your very first reps just break even. Then, scale it up to 3x-5x their OTE after. This will build their confidence and not really cost you any net cash.
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Factor in Yield: Not every rep will hit quota, and some will miss entirely. Assume a 60%-75% yield when planning your overall revenue targets. If you need $10M in new bookings, and your reps have a $1M quota, you’ll likely need 12-15 reps to get there.
The key is to set a quota that’s ambitious but achievable. If it’s too high, reps will get discouraged and leave. If it’s too low, you’re leaving money on the table.
A little bit more here:
