Your quota determines whether you're a hero or a failure. But how do companies actually set these numbers? And how do you know if yours is fair?
How Companies Set Quotas
Most companies use one of these methods:
- Top-down: Company revenue target ÷ number of reps
- Bottom-up: Based on territory size, historical performance, market potential
- Historical: Last year's number + growth percentage
- Hybrid: Combination of the above
The best companies use bottom-up or hybrid approaches. The worst just divide the board's revenue target by headcount.
What's a Reasonable Quota?
Industry benchmarks suggest:
- 50-70% of reps should hit quota in a healthy org
- 5-10x your OTE is typical for quota (e.g., $150K OTE = $750K-$1.5M quota)
- Year-over-year increases of 10-20% are normal; 30%+ is aggressive
Red Flags Your Quota Is Unfair
🚩 Warning signs
- Less than 30% of the team hit quota last year
- Quota increased 30%+ with no new resources
- Territory was cut but quota stayed the same
- Top performers from last year are now missing quota
- No clear explanation of how quota was calculated
Questions to Ask About Your Quota
- What percentage of reps hit quota last year?
- How was my specific number calculated?
- What resources/support will help me hit this?
- Is there a ramp period for new territories/products?
- How does my quota compare to similar territories?
What to Do If Your Quota Is Unfair
Document everything. Track your pipeline, activities, and results meticulously. If you're working hard and still missing, the data helps you either negotiate a change or explain the situation in future interviews.
Track your progress to quota
Know exactly where you stand at any point in the quarter.
Try Comish Free →Bottom Line
A fair quota is challenging but achievable. If most of the team is missing, the problem isn't the reps - it's the quota.