What goes into a quota calculation
Total revenue target. Number of quota-carrying reps. Territory potential per rep. Ramp time adjustment. Target attainment percentage (typically 60-80% of reps at 80%+ of quota).
Basic quota math
Total target / number of ramped reps = average quota. Adjust by territory potential. Reduce by ramp factor for new hires. Set attainment threshold.
Example calculation
Total target: $20M. Reps: 20 (15 ramped, 5 ramping). Ramp factor: 50% for ramping. Effective rep count: 15 + 2.5 = 17.5. Average quota: $20M / 17.5 = $1.14M. Adjust by territory: $900K-$1.4M range.
Calibration
After quota setting, model: how many reps will hit 80%+? If under 60%, quotas are too high. If above 80%, too low.
Frequently asked questions
How do you calculate a sales quota?
Total target divided by ramped rep count, adjusted by territory potential and ramp factor. Calibrate to 60-80% of reps at or above 80% of quota.
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