Share of potential

The quota method that sets each territory's quota as the same share of its potential, the company target over total potential, so two reps with the same quota have the same reach. Quotas sum to the target by construction, and a rep can check the quota account by account.

DefinitionThe quota method that sets each territory's quota as the same share of its potential, the company target over total potential, so two reps with the same quota have the same reach. Quotas sum to the target by construction, and a rep can check the quota account by account.

Against history

Quota from last year's revenue punishes the rep who grew and rewards the one who did not.

Adjustments on top

Ramp, known changes and mid-year moves are dated lines, and the identity still holds after them.

How it is computed

Company target divided by total potential gives one share. Each territory's quota is that share of its own potential.

Example

Total potential is $80 million and the target is $52 million: 65 percent. A territory with $6 million of potential carries a quota of $3.9 million.

Where it goes wrong

Quotas set as last year plus a percentage, which rewards territories that under-performed.

Articles that use this term

Territory, capacity and quota planning

Quota setting from potential: three methods compared, and the identity each must pass

Three ways to set territory quotas, top-down allocation by last year's revenue, bottom-up from rep commitments, and share of potential from the ledger and the norms, what each rewards and punishes, a worked comparison on the same four territories, the identity that the quotas sum to the company target under every method, and why the third method is the only one a rep can check.

16 Sept 20263 min read Board and management reporting

The shape of attainment: what the distribution across reps says about the plan

How to read quota attainment as a distribution rather than an average: the share of reps between 80 and 120 percent, the tails, the spread by tenure and by territory potential, and what four common shapes mean, a plan that was too easy, one that was too hard, one that was uneven across territories, and one that describes a team with a coverage problem rather than a quota problem.

16 Sept 20263 min read Territory, capacity and quota planning

Territory potential on four territories: the whole arithmetic on one page

The complete territory potential and quota calculation on four territories, small enough to check by hand: current revenue per territory, the gap at norm across its current accounts, the universe accounts not buying valued at the segment norm and discounted by a stated realisation factor, potential per territory, the share of potential that reaches the company target, the quota per territory, the balance check, and the identity that quotas sum to the target, so a reader can reproduce every figure and then run it on their own ledger and universe file.

17 Sept 20263 min read