Time for Sales Managers to Tip the Boat

Participation rate is the percentage of sales team members who are at or above plan. For a sales team, participation rate is easy to calculate. On a team of 10 people where four are above their sales plan on a  YEAR-TO-DATE basis, the participation rate is 40%.

Participation rate is a statistic that rarely scrutinized. Why? Sales managers are measured for making their quota. If the quota is $100 million, the sales manager’s goal is to get each sales person to deliver an average of $10 million. Some will produce $15 million and others will produce $5 million; the sales manager only needs the total to add up to $100 million. The sales manager is incentivized to keep average performers. A sales person who only delivers 50% of their quota is better for the sales manager than the 0% they would contribute if the sales manager let them go.