How to Align Quotas with Sales KPIs

The basic purpose of Quotas is to measure sales performance to predefined targets. But to be effective, it is essential to accurately identify the Key Performance Indicators (KPI) for each Sales Role. Quota Management cannot just be "one size fits all".

Establish Sales KPIs by Role

Sales key performance indicators (KPIs) are metrics that help sales organizations measure their effectiveness and efficiency, with the overall goal of improving methodologies and processes to drive sales. 

For best results with Quota Management, it is essential that you identify appropriate KPIs for each Sales Role and create a mapping from your Sales and Activity data to your Quota Management in order to capture and measure performance to KPI effectively.

Different Types of Quotas by Organization and Role

To accurately measure of performance by KPI for each role within your sales organization, different types of Quotas must be established, based upon the type of product or service that your business offers and your particular sales processes. 

The most common types of Quotas are:

  • Revenue quotas – the total revenue received from sales
  • Volume quotas – often related to the volume of physical product sold
  • Profit quotas – set in place to reduce excessive discounting
  • Activity quotas – number of sales calls or sales activities undertaken

The relationship between Quotas, Tiers and Accelerators

Quotas enable establishing targets for performance, but Quota Attainment-based Tiers (Tiers) and Commission Accelerators provide a structure to motivate sales performance and to pay competitively for different levels of performance. The Multi-Tier Accelerator Model is widely accepted as a powerful tool to motivate sales performance.

Multi-Tier Quota Attainment-based Accelerator example

The Multi-Tier Accelerator model uses Quota Attainment percentages to increase commissions through a set of steps (Tiers), thereby providing Sales People increasing incentives that are sufficiently within reach to motivate additional effort to achieve each next Tier.

Pulling it all together for Revenue and Growth

For best impact on Revenue and Growth focus on the following guidelines:

  • Accurately define Sales KPIs by Role 
  • Align Quotas with Sales KPIs for each Role
  • Set Quota Targets to be realistic and achievable for the majority of the team
  • Establish Multi-Tier Accelerators to motivate sales performance and to pay competitively for different levels of performance

About CloudComp Quota Management for Salesforce

CloudComp Quota Management is built into our 100% Salesforce Native CloudComp Commission Anything App and you can evaluate the fully functional app free for 30 days.

Contact Surfwriter today to learn more about how we can help you do Quota Management and Multi-Tier Accelerators right in Salesforce or to see a demo of our CloudComp Commission Anything App in action.  Learn more at

Escape From Manual Commissions Spreadsheets

If you're still processing sales commissions in manual spreadsheets, it's time for a change!

CloudComp Commission Anything processes your sales commissions calculations automatically using your existing Salesforce data.

Processing sales commissions via manual spreadsheets exposes you to a variety of issues including:

  • Calculation errors
  • Untimely results
  • Poor visibility for sales reps
  • Security / access control risks
When you run your sales commissions with CloudComp in Salesforce, you'll have: 

  • Automated, precise calculations
  • Commissions and quota attainment continuously updated automatically
  • Visibility for sales reps in reports and dashboards, right inside of Salesforce where they work.
  • Salesforce security and access controls

CloudComp is Certified 100% Salesforce Native. So your valuable customer sales data and your sales commissions will be processed in your Salesforce org and nowhere else. CloudComp uses the same Salesforce security and access controls that you trust to keep your data secure. So you can be sure that sales commissions are kept private between sales reps, even if your Opportunities are shared between reps in your Salesforce org.

Contact Surfwriter today to learn more about how we can help you do commissions right in Salesforce or to see a demo of our CloudComp Commission Anything App in action. 

5 Mistakes to Avoid in Sales Commissions Management

Whether you're updating your compensation plans in your existing cloud-based system or implementing a new sales commissions management application; for best results, avoid these five common mistakes that (otherwise) smart people often make in sales commissions management projects. 

1. Definitions of Sales Data not Documented 

Most sales organizations these days are maintaining their sales data in Salesforce or other similar cloud-based SFA systems, and of course, they have their compensation plans documented, but have you every noticed that documentation of the specific sales data in Salesforce or other SFA is totally missing from almost all compensation plan documents today? In my experience, very few organizations are maintaining a technical document to define the sales data that constitutes the basis for quotas and commissions. Hard to believe, given the business-critical nature of the sales data and the huge amount of money expended on sales commissions, right? 

To avoid this all-to-common pitfall, create and maintain organizational documentation of the sales data (API names of objects, fields, etc) that constitutes the basis for quotas and sales commissions with sufficient detail that a Salesforce (or other system) report can be created from the description. For example. if there are different commission rates for "New Logo" vs "Renewal", document the API names of the fields and values that map to those rules in the compensation plan. Create non-controversial reports that represent the basis for quota and commissions and socialize them throughout the sales organization. 

2. Overly Complicated Compensation Plans 

All too often we find that very few people in a sales organization actually understand the commission rules well enough to communicate them and demonstrate the math. This creates tremendous friction at multiple levels of the organization. Salespeople cannot be incentivized by formulas or math equations that they don't understand, Sales Operations has difficulty reconciling the results generated by automated systems and new changes in rules or rates are difficult to implement due to the sheer complexity of the rules. In short, the disadvantages clearly outweigh the advantages. 

To avoid this mistake, just apply the old KISS principal. Keep it Simple Salespeople! Reps can only be incentivized by what they can easily understand. If almost nobody in the sales organization knows how to do the math for the commissions you're doing it wrong. Just saying... : ) 

3. Complex Work-arounds for Discounts and Variable Margins 

We've seen a wide array of bizarre commission formulas over the years that were intended to deal with the reality that margins often differ between sales deals. These often seemed to frustrate both Sales Ops and Sales people not to mention the inflexibility and cumbersome technical overhead they create. 

In my experience, the best way to handle variable sales commissions for sales channels where discounting is a factor, is to commission on sales margins rather than gross sales. Yes, this means that you need to establish the ability to maintain data on costs in your SFA, but in my view, this is a worthwhile effort that will enhance your business intelligence and render a variety of welcome benefits above and beyond sales commissions management. 

4. Insufficient or Untimely Visibility of Results 

Poor visibility comes in a variety of forms, including non-timely results, lack of granularity, difficulty with reconciliation, hidden math equations etc. The bottom line is this: If you want your salesperson to be incentivized by sales commissions, she needs to be able to see and understand her results in a timely manner. She needs the ability to reconcile the results herself and feel confident that her commissions are accurate. 

So, if you haven't gotten out of manual spreadsheets into and automated sales commissions management system yet, or you're in a system that isn't rendering timely visibility of quota attainment and commissions for your team, it's time to make your move. 

5. Compensation Plans Misaligned with Desired Performance 

To put it in plain english: Some sales organizations have bad compensation plans. We could give these bad comp plans the benefit of the doubt and say they've been outgrown by their organizations... But really, some just seem to have never been a particularly good idea to begin with... I've seen some comp plans that I figured must have started out their life as a few notes scrawled on a cocktail napkin by a VP in Cabo San Lucas after 3 pitchers of Margaritas 10 years ago... Then they got stretched, morphed, extended and subverted by teams of otherwise well-meaning Executives and Sales Ops folks and somehow never got thrown in the proverbial recycle bin out of some kind of organizational inertia.  If your organization has compensation plans like these, it's time to move on and make a fresh start! Compensation plans and systems should be designed for a win-win of organization and sales people featuring timely visibility of results driven by rules that are easy to understand, goals that are both reasonably attainable and in alignment with the objectives of the organization. It really is that simple.

Contact Surfwriter today to learn more about how we can help you do commissions right in Salesforce or to see a demo of our CloudComp Commission Anything App in action.