What is the best way to set targets for SaaS sales people?

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JASON LEMKIN

I try to model 3 overall plans for the year:  C-90, C-60, and C-10, not just for the sales team, but the whole company.

The C is for “Confidence”.  The odds you think you can hit it, from the CEO’s perspective.

The base plan, the plan I use for the overall sales and revenue goals, is the C-60 plan.  A plan I as CEO/founder/etc. have a 60% confidence we’ll hit.

And if we hit the C-10 plan, everyone should make serious coin.

The C-90 plan (the one I should make almost certainly, unless we really screw up) I only use for financial planning with the CFO.  We use that for worst-ish case cash planning.  I don’t share that with the team or externally.

So:

  • First, figure out the C-60 Plan.
  • Then, from that, figure out quotas that are realistic, that at least 60% of the sales team can hit.  You don’t want quotas no one can hit.  That’s demoralizing and counter-productive.  Use your top performing reps to figure out what a Pretty Good rep can do.
  • Pay them market if they hit these quotas.
  • Pay them real bank if in the end, you hit the C-10 plan.  And focus that back on comp for blowing out the quota.
How I do it, at 20,000 feet, at least.
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Published on January 31, 2016
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