Well-set sales quotas balance company growth targets with rep-level attainability.
Quota setting sits at the intersection of finance planning (what does the company need to book?) and sales management (what can a rep actually sell?). Get it wrong and you either miss the number (quotas too low) or watch rep attrition spike as reps miss quota quarter after quarter (quotas too high). The healthy target: 60-70% of reps hit or exceed quota in a given period, with total quota capacity 15-25% above the company plan.
Quota coverage = Total quota assigned across the team / Company revenue target. Standard best practice is 1.15-1.25x — you assign 15-25% more quota than you need to book, so the company still hits plan even if some reps miss. Below 1.1x, you have no room for error. Above 1.4x, quotas are demoralizing and reps disengage.
For enterprise AEs: 4-5x is standard (a $200K OTE rep carries $800K-$1M quota). For SMB AEs: 5-7x. Ratios below 4x mean the business can't afford the sales team; above 7x, quotas are unrealistic and reps churn.
Standard ramp: month 1-3 at 25% of full quota, 4-6 at 50%, 7-9 at 75%, 10+ at 100%. Skipping ramp torches the first quarter of a rep's tenure and their comp.
Equal quota per rep is simple but ignores that territories differ. Territory-scored quota — score each patch by market size, existing pipeline, historical yield — reduces complaints but requires ops maturity. Most companies move from equal to territory-scored post-Series B.
Quotas are typically set annually with H1 midpoint review. Mid-year changes should be rare and only upward. Publishing methodology to the team builds trust in the numbers even when reps disagree.
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