With Quotas Up $180K and Quota Achievement Down to 51%
Though Sales Numbers Are Down, Revenue and Quota Targets Continue to Move Up
BOULDER, CO – September 20, 2010 — CSO Insights announces the release of their 3rd annual 2010 Sales Compensation & Performance Management Report. The overall results are a bit of a mixed bag, reflecting the general state of the economy. Companies have enjoyed a fairly strong recovery and are sitting on more cash—about $2T—than at any time during this decade. But they remain tentative, holding off on hiring and remaining slow to pull out their checkbooks, reflected in persistent protracted sales cycles.
More than 1,200 firms responded to the 2010 Sales Compensation & Performance Management survey. Of these, the largest single segment at 36% were less than $50M in revenues; the next largest at 29% had annual revenues greater than $1B. The report covers 40-plus metrics, some of which are:
• Frequency of setting quotas/goals
• % of reps expected to make quota during plan design
• Sales rep turnover rates
• Impact of comp and incentive program on sales force retention
• Average annual quota for sales people
• Sales compensation expense as a % of total revenues
Key findings surrounding sales compensation and performance management indicate a challenging sales environment. Here are a few examples supporting this contention:
• Targeted compensation is down 4.7% from $127,560 to $121,625.
• Sales rep assigned quotas (weighted average across all participants) jumped up $180K this year to $1.76M.
• Percentage of reps who achieved or exceeded quota was 51% in 2009, a drop from 53% in 2008 and 59% in 2007.
“Management will have to do more than simply try to motivate reps to make their numbers,” said Barry Trailer, Managing Partner. “Other than urging everyone to work harder and faster, urging them on really hasn’t offered anything new. Secondly, even reps motivated to do better will need systems, tools, and training to help them do so.”
Firms who state their compensation plan consistently drives the precise selling behaviors desired remains unchanged this year—and is only true for 1 in 9 firms. Those indicating their plans generally drive desired behavior gave up 3 points, and Do Not Know is down 1.5 points, all of which accrued to minimal or no impact. One in 7 firms feels its plan is not helping.
The good news is that positive selling and management behaviors are both up—proactively identifying which reps need extra coaching (51%) to fostering a positive sales team culture (48%) and accurately forecasting business (33%)—all point to a more informed and involved sales manager. A strong correlation was also seen between companies tracking a higher number of performance management metrics and positive selling behaviors. These firms are distancing themselves from those that continue to focus solely on results.
Get the full Sales Compensation Report or email Laura Andrus at [email protected]
About CSO Insights
CSO Insights is a sales effectiveness research firm that specializes in measuring how companies are leveraging people, process, technology, and knowledge to improve the way they market and sell to customers. For 16 years, CSO Insights’ surveys of over 10,000 sales effectiveness initiatives have been the standard for tracking the evolution of how the role of sales is changing, revealing the challenges that are impacting sales performance, and showing how companies are addressing these issues.
• To interview Barry Trailer, please email [email protected] or call 415-924-3500.
• To obtain a PDF copy of the full report, please email Teresa Acosta at [email protected]
• Tags: sales compensation, sales quota, performance management, compensation design, sales management