If all of your sales reps are consistently not meeting quota, it is up to you as the sales manager to develop an action plan that addresses the root causes for not meeting quota. Meeting quota is not about luck but about encouraging your sales people to make the most of the opportunities that they have. Following you will find some of the most common causes for sales people not meeting quota and strategies that you can use to correct these issues.
1. Sales People Need to Set Realistic Expectations
Sales people by and large tend to be an optimistic group, which helps them build confidence and bring a great attitude to the bargaining table. On the other hand, being overly optimistic about the chances of success with a given opportunity, and the work that needs to be done to exploit that opportunity, can lead to sales people not reaching the bargaining table with a prospect. Sales people can still be optimistic while being realistic about the leads and prospects that they are working. Help your sales people understand the fundamentals of setting realistic expectations for opportunities by:
- Teaching your sales people how to realistically qualify all leads and prospects so that their time management is focused on the most qualified early opportunities.
- Encouraging your sales people to pay attention to how long it takes to complete common sales tasks so that time is always spent effectively and sales people do not approach the end of a period with tasks left undone.
- Tracking metrics for how many leads are converted into prospects and how many prospects are converted into sales to give individual sales people baseline expectations for completing outreach and follow up on a regular basis.
2. Sales People Need Coaching on Understanding Closing Rates
Misunderstandings about closing rates are a common cause of sales reps not meeting quota. Again returning to the optimistic viewpoint that most sales people share, many sales people do not realize that their average closing rate does not tend to change from quarter to quarter and should be a baseline for predicting the likelihood of meeting or not meeting quota in a given period. Chances are good that you are already tracking the average closing rate for your sales team. If you are not already doing so, begin tracking closing rates at the individual level and use these to coach sales people who are not meeting quota by:
- Helping your sales people track the deals in their sales pipeline throughout the quarter to understand how likely it is that they will meet quota before there is a real risk of not meeting quota.
- Analyzing individual sales pipelines at regular intervals to make sure that sales people have the right number of active deals to meet quota based on past average closing rates.
- Working with sales people to ensure that the highest quality opportunities have the highest closing rates so that sales people are focusing their energy in the highest payoff activities.
3. The Sales Pipeline Is Not Accurately Forecasted
Sales pipeline forecasting can have a huge impact on sales people meeting or not meeting quota for a given period, since quota is based on historical and forward projected sales pipeline data. Since it is not uncommon for any quarter to have outlying data, such as a larger than usual number of incoming leads or a record or near-record deal, it is important for sales managers to learn how to look for events that can skew sales pipeline data and change the way that forward projections should be forecasted. Make sure that you are using average data from at least four quarters when forecasting the pipeline and that enough opportunities are entering the pipeline to ensure that all of your sales people can meet quota.