Sales Quotas Won’t Exist in 2025 — Here’s Why
By Anita Little
Put the customer first. It’s boilerplate. But the past year has brought new weight to the adage, and businesses everywhere are discovering what it means to put the customer at the center of everything. A major consequence of this shift? We could be evolving past the need for sales quotas as the sole measure of performance.
“The sales environment is very different now,” said Tyler Smith, pricing and sales analytics manager at Lupin Pharmaceuticals. “We really want to hone in on our customers, and make sure that we were able to serve them.”
But can putting customers first and a “quotas over everything” mentality coexist?
Companies increasingly realize sales quotas promote a short-term mindset, can damage morale, and can even undercut profits, according to a Stanford study. A Fortune 500 company found that sales went up by $1 million a month after they abandoned quotas.
The sellers of the future may not be as focused on hitting numbers, because they’ll be too focused on creating a customer-first buying experience. There needs to be new definitions of success to support that behavior, rather than positions on a leaderboard.
What are sales quotas?
Sales quotas are clearly defined numerical targets salespeople are expected to hit in a specific time period. For the sales rep, it provides a goal and a deadline. For the sales leader, it helps measure performance.
The end of sales quotas as we know it?
The question is no longer, “how can I hit my numbers?” It’s “how can I help my prospect hit their numbers?” According to the latest State of Sales, 86% of sales reps say economic conditions have put building long-term relationships at top of mind. Long-term is the operative word here. Meaning a relationship that extends beyond the deal’s close date. Buyers want sellers to connect with them on a human level while providing them with a superior service experience. Performative persuasion has become gauche.
“What if we could focus less on next quarter’s quotas and more on delivering better outcomes and customer value? Just imagine if in five years, the high performers aren’t working on meeting quotas but rather using outcome- or adoption-based incentive models,” said Karen Semone, senior director of innovation at Salesforce.
Customers don’t want to hear about product features, benefits, or even solutions. They just want outcomes. They just want the job done.
SIMON MULCAHY, CHIEF INNOVATION OFFICER AT SALESFORCE
Some of today’s sales reps are so focused on meeting numbers and not being in the dreaded bottom 10% of their team that the customer experience gets lost in the shuffle, which ultimately runs counter to the organization’s goals. Even when sales goals are met, customer retention and renewal can suffer. Not to mention there’s more sales rep burnout and turnover.
“We’re definitely seeing a renaissance in soft skills, a return to that art of selling,” said Harry Datwani, a principal at Deloitte Digital where he leads digital transformation efforts for customer-facing organizations. “How do you create an empathetic seller, a seller who knows how to build rapport, especially in complex B2B sales?”
Some sales leaders out there are even taking a more hardline approach, wanting to abolish, not just reform, the sales quota system. They feel it ultimately isn’t worth the strain it puts on reps.
“The downward pressure put on sales reps to hit their monthly quota is so immense that it makes sales reps do some very unnatural things. If I was a VP of sales of a larger organization, I would remove monthly quotas as soon as I possibly could,” said John Barrows, CEO of JB Sales, a sales training firm.
“I would take that all off the table. If you’re falling behind, then we have more coaching, but I’m not going to sit there and say, if you don’t hit this number every single month, you’re going to get fired,” said Barrows.
What are better ways to measure success? Enter customer metrics
If we take away the carrot of sales quotas then what are we left with? It turns out way more than what we started with. A few metrics that can reveal a seller’s performance better than just the number of closed deals:
- Renewal/retention rates: Do customers come back for more or does loyalty fade?
- Engagement rates: Meaningful points of engagement can be an important metric for long-term relationship building. During the pandemic, Salesforce tracked its “5 Million Zooms” dashboard to ensure a regular cadence of engagement on every account.
- Adoption rates: How much time does a customer spend using your product?
- Customer lifetime value: Do you look at the net profit you stand to gain from the future of this relationship? Or do you just look at what you could gain this quarter?
- Customer satisfaction scores: Folks have plenty of choices when it comes to who they do business with. So do your customers like your product and you?
Cybersecurity company McAfee has been paying more attention to increased renewals as a metric, developing a “renewals engine project” that uses customer data to predict whether a renewal might be at risk.
“We want to protect our base, in other words, our renewals business,” said Jason Tompkins, director of commercial sales operations at McAfee. “It’s all about getting that 360 view of our customers.”
Seventy-nine percent of sellers said they had to adapt to new ways of selling during the pandemic, and 58% expect their roles to change permanently.
SALESFORCE STATE OF SALES REPORT
This is how you measure based on outcomes. But it does require radically redefining a seller’s job. Seventy-nine percent of sellers said they had to adapt to new ways of selling during the pandemic, and 58% expect their roles to change permanently, according to State of Sales research.
To keep up with this shift, the best-sellers are now personalizing the sales process for each buyer. They know every buyer has slightly different needs, and they can’t approach them with a generic strategy. Instead of an adversarial relationship, sellers need to become trusted advisors — coming to the table with valuable insights, research, and recommendations that will make a measurable impact for the customer’s business.
That means building trust through transparency and also educating them with strategy. You might not be meeting at the steakhouse or sitting courtside with them anymore as you would in a typical “wine and dine,” but the expectation of personalization hasn’t changed.
“Customers don’t want to hear about product features, benefits, or even solutions,” said Simon Mulcahy, the chief innovation officer at Salesforce. “They just want outcomes. They want the job done.”
The best salespeople analyze the buyer’s problem and figure out which specific insights will help them get closer to their target outcomes. This shows you took the time to understand their unique situation and develop a strategy in response to it. Instead of repeating the same pitch to everyone, listen closely and adapt your approach. In order to feel relevant to each customer, one needs targeted questions, relevant stories, and the best next steps.
The sale becomes just the natural consequence of your investment in the buyer relationship. Selling evolves into something that happens instead of something that you do.
Whereas there’s largely one metric today, there will be more in the future — a blend of quotas, engagement numbers, customer satisfaction, and value delivery.
SIMON MULCAHY, CHIEF INNOVATION OFFICER AT SALESFORCE
Mulcahy doesn’t believe quotas will ever completely be replaced though. He thinks the landscape will shift more toward customer metrics and quotas, not customer metrics instead of quotas.
“Whereas there’s largely one metric today, there will be more in the future — a blend of quotas, engagement numbers, customer satisfaction, and value delivery. So today’s reliance on quotas will be offset by a customer outcome-based model, to balance their value.“
Mulcahy adds: “The selling behavior of today is driven by the one metric sellers can see: quota attainment. We are already seeing the future and it’s salespeople being able to see a more complete picture of their accounts so they can seed and grow each one.”
That human touch won’t ever go away, it will just be manifested differently.
HARRY DATWANI, PRINCIPAL AT DELOITTE DIGITAL
How do we combat quota culture?
So how do we tear ourselves away from our quotas and invest more time in building buyer relationships? Wining and dining was often the way to go. You get folks out of the conference room, and they start connecting. The pandemic put that on hold, and they’re likely not coming back anytime soon.
“My heart breaks when I say it, but I don’t think the fancy dinners and golf rounds will return in the same way,” said Datwani from Deloitte Digital. “That human touch won’t ever go away, but it will be manifested differently.”
Sales leaders should enable sellers so that they have the bandwidth to be customer-first instead of scrambling to hit numbers. Two-thirds of a seller’s day is spent on non-selling activities, according to the State of Sales. Reps get bogged down by internal processes and administrative tasks that they can’t do what they do best: solve customers’ problems. To allow today’s sellers to focus on buyers, businesses are looking for ways to free up their precious time.
At Equifax, that meant building out an entirely new function: customer success. These folks swoop in after the seller has closed a deal to continue the buyer relationship throughout the adoption process. They bake strategy into post-sales, so the buyers maintain confidence in the promised outcome and feel further supported in their journey. The rep is allowed to position themselves for the next deal but the customer isn’t left high and dry.
Equifax is also streamlining internal processes as much as possible so sellers aren’t encumbered by overwrought workflows. This means heavily leaning on the CRM to be the place where everything happens.
“Our vision is really for Salesforce to be our single desktop for sales. We don’t want them to leave Salesforce, so we put everything, including training, in there,” said Tressa Mild, the senior vice president and chief customer experience architect at Equifax.
The future salesperson is a hybrid of hard and soft skills
To be a seller means you’re adapting to new scenarios constantly. Sales teams will need to be open to experimentation and new ways of measuring success. Having a balanced model of different performance metrics will evolve sellers into a perfect blend of hard and soft skills: agility, strategy, and expertise, yes, but also empathy, curiosity, and communication.
The changes of the past year provided further evidence that sellers will need to choose customers over closing. Achieving this means looking beyond sales quotas and quarters and reinterrogating the goals that motivate us. The companies that harness this will be the ones that thrive in 2021, 2025, and beyond.
Time travel with us in our Future of Selling webinar where Salesforce’s Office of Innovation takes a deep dive into the next generation of selling.