Definition
Quota setting is the process of assigning revenue targets by rep, team, or segment based on capacity, pipeline, and business goals.
Formula
Quota per rep ~ target bookings / effective reps
Example
If the team target is $2M and you have 10 effective reps, quota per rep is about $200k for the period.
How to use it
- Combine top-down goals with bottom-up capacity to avoid impossible targets.
- Adjust for ramp, seasonality, and territory differences.
- Validate that pipeline coverage and win rate support the quota.
- Review quota fairness by segment and role to prevent churn.
- Stress-test quota with conservative and optimistic attainment scenarios.
Common mistakes
- Setting quota without a capacity model.
- Ignoring ramp time for new hires.
- Assuming identical conversion rates across segments.
Why this matters
This term matters because small changes compound in SaaS metrics. Use consistent definitions by cohort and segment so you can diagnose retention, payback, and growth quality.
Practical checklist
- Write a 1-line definition for "Quota Setting" that your team will use consistently.
- Keep the time window consistent (weekly/monthly/quarterly) when comparing trends.
- Segment results (channel/plan/cohort) before drawing big conclusions from blended averages.
- Use a calculator that references this term (e.g., Sales Capacity Calculator (with Ramp)) to sanity-check assumptions.
- Read the related guide (e.g., Sales quota setting: a practical framework (capacity, pipeline, and ramp)) for context and common pitfalls.
Where to use this on MetricKit
Calculators
- Sales Capacity Calculator (with Ramp): Estimate period bookings capacity from team size, quota per rep, expected attainment, and ramped vs ramping mix.
- Required Pipeline Calculator: Estimate how much pipeline (and how many opportunities) you need to hit a revenue target given win rate and average deal size.
- Quota Attainment Calculator: Calculate quota attainment and pacing from booked revenue to date, quota, and days elapsed in the period.
- Sales Quota Calculator (Team to Rep): Sales quota calculator to estimate quota per rep from a team target using expected attainment, ramp mix, and optional pipeline coverage checks.
Guides
- Sales quota setting: a practical framework (capacity, pipeline, and ramp): Learn how to set sales quota using capacity math, pipeline coverage, and ramp assumptions, plus a sales quota calculator to sanity-check targets.
- Sales capacity planning: quota, attainment, ramp, and what to watch: A practical guide to sales capacity: estimate bookings capacity using headcount, quota, expected attainment, and ramped vs ramping mix.