Determining a Sales Quota

One of the strategies we employ to determine a sales quota is to decide on the appropriate on target earnings (OTE) for the type of sales rep that makes sense for the product and market. OTE is the base salary plus commission for hitting quota in a calendar year. Here are some example OTEs:

• Sales rep that handles mostly in-bound leads for a product that isn’t too complex: $30k base + $20k commissions = $50k OTE
• Sales rep that cold calls and works in-bound leads with a semi-complex product: $30k base + $50k commissions = $80k OTE
• Sales rep that sells a complex product face-to-face with extensive travel: $100k base + $100k commissions = $200k OTE

Once you’ve determined the type of rep, sale, and desired OTE, backing out the quota based on commissions should be a simple math exercise. My advice is to get OTE right and make commissions fair with no cap on earnings.