Sales quotas are one of the most consequential decisions in revenue planning. Set them too high and you destroy morale and retention. Too low and you leave money on the table. Here is a data-driven framework.
The quota-setting inputs
- Total revenue target (from finance — usually ARR growth goal)
- Number of quota-carrying reps (QCRs) — exclude ramp, leave, management
- Historical attainment — what % of reps hit quota last period?
- Territory/segment capacity — TAM × penetration rate by territory
Common quota models
Top-down: Total target ÷ number of reps + management buffer (20–30%) - Simple, but ignores territory variation
Bottom-up: Sum of territory potential × expected win rate - More accurate, requires territory data
Bottoms-up with attainment model: Set quota so 60–70% of reps attain it - Research shows this maximises revenue per rep while preserving motivation
Quota attainment benchmarks
A healthy sales org has: - 60–70% of reps at or above quota - <5% of reps significantly below (50% of quota) - Clear top performer tier (120%+) driving outsized results
Use the sales quota calculator to model your revenue targets and per-rep allocations.