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Setting your target on next year's sales quota


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Having a target, the RIGHT target, is critical to business growth.

As sales people, we often struggle with knowing how many deals to close in order to make the numbers that the business requires from us. I will introduce you to how I manage sales people and their capabilities in order to meet the target number they require. It is very difficult as a salesperson when you are in the mud, to figure out how to get out of it. It's much easier when you take this approach at a macro view.

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Setting your target on next year's sales quota

  1. 1. Setting Your Target OnNext Years Sales Quota
  2. 2. Introduction to the formulaHow To achieve nextyear quotaForecasting BusinessGrowthExamples
  3. 3. Having a target, theRIGHT target, is critical OK ... Dont get scared Here is the formula
  4. 4. Meeting Your Quota if G <1 then Performance You are below 1.5 Formula Index 1A= How many deals have you closed in the last 24 months? =G .5B= How many deals is the Company average in the last 24 months? # of # of must win # must win deals toC= K=H/I What is your quota for next year? =HD= What is the average size of a deal in your company? Close Win Size of sales Average Ratio Pipeline needed deal SizeE= How many deals have you chased, in the last 24 months? =I K*D=LF= How many have you closed? Performance Index Average Adjusted deal Size Number Of Size of sales deals to chase Pipeline needed (L/G)/C=X
  5. 5. First How are you performing?A=how many Deals You can also testhave you closed? this with DollarsB=How about the rest Maybe your dealsof the company? are bigger in dollarA/B and above averageif the answer is under1 then you are belowaverage
  6. 6. How many deals must you win This uses a conservativeC= What is your quota Variablefor next year?D= What is theaverage size of a deal So Ifin your company? your Quota is $20MC/D= will give you & avg deal is $1.1 youthe Must Win Deals need to close 19 deal
  7. 7. What is you close win RatioE= How many deals if youhave you chased, inthe last 24 months? chased 30 opportunitiesF= How many haveyou closed? and won 10 then your close winE/F= I your Close Win ratio is 33%Ration
  8. 8. How many deals must you chase? Close Win Ratio # deals toOk Stay with me.. chaseIf your Win ratio is K=H/I33% and you must Average # ofwin 19 deals - that deal Size must winmeans you need tochase 57opportunities K*D=L # deals to Size of sales chase Pipeline needed
  9. 9. How big of a sales pipeline do you need?OK you need to find 57opportunities... Right? Average deal Sizedo if you companyaverage deal size is $1.1Myou need a sales pipeline K*D=Lof $63m # deals to Size of sales chase Pipeline neededTrust me if you carry TheRight Sales Pipeline yourwill make your salesnumbers!
  10. 10. Adjust to your prior year performance..So if your Quota is $20m Performance Average Index deal Sizeand you need $63m andperformance .9 you need to (L/G)/C=X$70m sales pipeline to makeupfor the performance Indexso if you have $1.1m avg deal Adjusted Size of sales Number Ofyou need find 63 opportunities Pipeline needed deals to chase
  11. 11. ConclusionIf you want read the original article - if you need help understanding the articlereach out to meMarco Giunta @marcogiunta orcall me (201) 305 3305