In sales, the importance of quota attainment cannot be overstated. It is everything. It is the only thing that matters.
It’s why reps stay late at the end of the month to hit their call quota. It’s why account executives focus on deals that are most likely to close at the end of the quarter. It’s why sales managers spend time setting realistic goals in the first place.
But according to recent research, only 60% of salespeople hit 100% of their quotas. That’s a whopping 40% that falls short of their goal.
So if you’re in that group of 40%, how can you find out why you missed your goal and increase your sales quota attainment going forward?
Assuming that your goals are realistically attainable, you can dig into certain key metrics to find out where you came up short and what you should do differently going forward.
To reveal your shortcomings, you should analyze the following five key sales metrics:
- Open Opportunities
- Closed Opportunities
- Average Deal Size
- Win Rate
- Sales Cycle
(In this post, we’ll be focusing on open and closed opportunities. To learn about how all five of these metrics can help you attain your quota, check out our FREE guide: Why You Didn’t Hit Your Number.)
The number of deals you close traces directly back to the the number of open opportunities you started with. And if you don’t have enough open opportunities, then it’s unlikely that you’ll close enough deals. By looking at three different open opportunity metrics, you can see where your team fell short.
Number of Opportunities Per Rep
There are many reasons why a sales team doesn’t hit its number, but one of the most common is that reps don’t have enough opportunities to work. Monitor the number of opportunities per rep to see if everyone is on track to attain their quota by looking at individual historical win rates. These calculations will allow you to see whether or not all of your reps have enough opportunities or if they’re running thin.
Inflow of New Opportunities into Pipeline
You should also make sure that your pipeline is growing at a fast enough rate to keep your reps stocked with new opportunities. Keep a close eye on the inflow of new opportunities minus the number of recently closed opportunities. Ideally, this net flow will increase over time. But if it remains steady or decreases, it may be the reason why you didn’t hit your number.
Pipeline History and Trend Over Time
Another screen to investigate is the trend of your pipeline over time. This will give you a holistic view of your pipeline health and show you a breakdown of how many opportunities you have in each stage. If your pipeline is growing, but you still missed your number, then it’s probably not because your reps were lacking opportunities. However, a slow, steady, or declining pipeline could be mean that your reps were in need of more opportunities.
Like open opportunities, closed opportunities can provide you with deep insights to help you find out why you missed your number. Your reps should close a certain number of deals each month, whether won or lost. If they’re falling short of goal, you need to find out why.
Closed Opportunities Per Rep
Look at conversion rates for each rep to see where (or in which stage) opportunities were lost. If you missed your number, this can reveal the source of your problem. Increasing low conversion rates can help you turn the closed-lost opportunities into closed-won opportunities next time around.
Ambitious sales teams will always challenge themselves by setting high goals that not everyone will hit. For individuals (and sales teams) that miss their number, digging into the historical data is the only way to find out what went wrong and how you can improve going forward.
So next time you miss your quota, keep the lame excuses to yourself. Instead, adopt an analytical mindset to reveal the exact source(s) of the problem.