Are you considering a new sales opportunity or just evaluating your current situation? The most important factor by far is the percentage of reps currently hitting quota.
This metric will tell you almost everything about an opportunity, and not just from a money perspective. The answer to this question will also tell you a lot about the product, culture, advancement opportunity, and other important factors.
If you’re interviewing for a new opportunity, this information will give you a true idea of what you can expect to earn, and help to evaluate the company without asking about every aspect of the business. If a low percentage of reps are at or above quota, there might be some underlying issues that are totally out of your control. The specific issues might be challenging or impossible to uncover during the interview process, but they exist if the team isn’t performing. If a high percentage of reps are at or above quota, it’s very likely a solid overall opportunity. This metric will save you time, and help to step back and evaluate a company objectively – regardless of how many ping pong tables they have or how much you loved the team.
If a low percentage of your current team is currently hitting quota, there are probably better opportunities out there for you – especially if you are one of the few above plan.
So what constitutes a solid percentage of reps at quota?
When it comes to tech sales, 60% of salespeople achieved quota last year according to a recent Harvard Business Review survey. I believe that serves as a good cut-off point when considering a new opportunity. There are many factors, but anything below 60% probably requires some extra research. The actual breakdown by percentage is shown here:
Percentage of team at quota by industry:
- Computer Software: 52%
- Computer Hardware: 60%
- Cloud/SaaS: 61%
- Telecommunications: 66%
- Prioritize this information over items like base salary, or what the top earner made last year. These are good to know, but these can be misleading if given too much weight.
- Start-ups and earlier stage companies may have a lower percentage of sales reps at quota, or may have no data at all. These companies often compensate for this risk with some amount of equity. Extra research is highly recommended in these situations.
- If it’s very early in the process and/or a company is unwilling to talk about OTE, you can always ask about quota. Once you have this information you can work backwards to the OTE.
- Some companies operate in several different cities/regions, and it’s important to find out how the sales reps in your area are doing.
HBR Source: https://hbr.org/2013/12/new-insight-into-key-sales-metrics
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