Sales Operations

Sales Quota Setting:
The 60-70% Rule

If 90% of reps hit quota, your quotas are too easy. If 40% hit, they're too hard. Here's how to set quotas that motivate and drive growth.

HEALTHY QUOTA ATTAINMENT DISTRIBUTION
0%40%60%70%80%100%
<50%
Too aggressive
60-70%
Optimal
>80%
Too easy
TL;DR

Sales quota setting best practices: Target 60-70% of reps hitting quota—lower means quotas are too aggressive, higher means leaving money on the table. Three methodologies: (1) Top-down (company target ÷ reps) is simple but ignores territory differences, (2) Bottom-up (historical performance × growth factor) is more accurate but time-intensive, (3) Hybrid combines both with territory weighting. Ramp quotas are essential: Month 1-3 at 25-50%, Month 4-6 at 75%, Month 7+ at 100%. Review and adjust quarterly—annual-only adjustments are outdated. Over-quota reps should earn accelerators (1.5-2×), not caps. Source: Optifai Sales Ops Benchmark 2025 (N=487 companies with quota data).

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Three Quota Setting Methodologies

Top-Down

Company revenue target ÷ number of reps

Traditional

Pros

  • +Simple to calculate
  • +Aligns with board targets
  • +Fast to implement

Cons

  • −Ignores territory differences
  • −Can demotivate strong territories
  • −No historical basis

Best For

Early-stage, uniform territories

Bottom-Up

Individual historical performance × growth factor

Traditional

Pros

  • +Territory-specific
  • +Based on real data
  • +More achievable

Cons

  • −Complex to calculate
  • −May miss company targets
  • −Time-intensive

Best For

Mature sales orgs, diverse territories

Hybrid

Top-down target distributed with bottom-up weighting

Recommended

Pros

  • +Best of both worlds
  • +Territory-adjusted
  • +Hits company targets

Cons

  • −Requires good data
  • −More complex
  • −Needs regular updates

Best For

Growth-stage, mixed territories

Ramp Quotas for New Hires

Expecting full quota from Day 1 leads to frustration and turnover. Ramped quotas account for onboarding and pipeline build time.

Month 1-2
25%
Onboarding & training
Month 3
50%
Building pipeline
Month 4-6
75%
Closing first deals
Month 7+
100%
Full productivity

Impact: Companies with proper ramp quotas see 35% lower new-hire turnover and 28% faster time-to-productivity. The "sink or swim" approach is outdated.

Accelerators, Not Caps

🚫

Commission Caps (Avoid)

Capping commission at 100% quota punishes top performers and encourages sandbagging deals into next quarter.

Result: Top reps leave, quota gaming increases
✅

Accelerators (Best Practice)

Increase commission rate above quota: 100-125% gets 1.25× rate, 125%+ gets 1.5-2× rate. Rewards overperformance.

Result: Top reps stay, push through ceiling
AttainmentCommission RateExample ($100K quota)
0-80%0.5× (reduced)$80K closed = $4K commission (5% × 0.5)
80-100%1.0× (standard)$100K closed = $10K commission (10%)
100-125%1.25×$125K = $13.1K commission
125%+1.5-2×$150K = $17.5K commission

Set Data-Driven Quotas

Optifai analyzes historical performance, territory potential, and pipeline data to recommend quotas that motivate and hit company targets.

See AI Quota Recommendations →
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