Adam KayRevenue executive, experienced in scaling early stage startups, fundraising and hiring and developing world-class teams

Why Cutting Quotas Isn’t The Answer

Name: Why Cutting Quotas Isn’t The Answer
Uploaded: 2023-10-10T19:16:21+00:00
Duration: 40 s
Channel: Adam Kay
Description: Excerpt from a YouTube conversation about sales quotas and compensation. Speakers debate the practice of reducing quotas so more reps hit target and the…

10 Oct 2023 · 1 min

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Excerpt from a YouTube conversation about sales quotas and compensation. Speakers debate the practice of reducing quotas so more reps hit target and the business risks of overly-generous commission/OTE structures. The core claim: chopping quotas to make targets look achievable can mask unsustainable pay practices that threaten the company's viability.

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It's also not cool to have a whole floor missed target. Some reps will bring up the idea. It's like, well, then chop the quota in half, and then we have a dying chance to actually get there. And really cool to get that perspective from you on that particular problem.
I want reps to be making an exceeding quota, and as a business owner, I like to write very big checks. But those checks also have to make sense in context of the business's cost structure and revenue model and all these things. And if I'm paying a rep $300,000 a year OTE, if they meet or exceed their number and their quota is only $500,000, then all right, we' winning the battle, but we're losing the war. The company is going out of business actively by paying out commission rates that high. It's just not sustainable.