Target (sales target) is a specific, measurable goal assigned to a salesperson, team, or organization to achieve within a defined time period. Targets serve as benchmarks for performance measurement and are typically tied to compensation through commission structures and bonuses. According to Gartner (2024), teams with clearly defined targets perform 23% better than those without.
While often used interchangeably, targets can be broader in scope than quotas:
Well-designed targets are fundamental to sales success:
The most common type, measuring total sales value:
Example: $500,000 in new bookings per quarter
Based on number of deals or customers:
Example: 25 new customers per month
Measuring sales activities rather than outcomes:
Example: 100 cold calls per week
Aligned with specific business objectives:
Example: 30% of bookings from new product line
Leadership sets company goals, then allocates to teams:
Pros: Aligns with business objectives
Cons: May not account for individual territory potential
Targets built from individual territory analysis:
Pros: More realistic, rep buy-in
Cons: May underestimate potential
Based on past results plus growth factor:
Company Context:
Step 1: Revenue per Rep
$20,000,000 ÷ 8 reps = $2,500,000 per rep
Step 2: Deals Needed
$2,500,000 ÷ $50,000 average deal = 50 deals per rep
Step 3: Pipeline Required
50 deals ÷ 25% win rate = 200 qualified opportunities needed
Targets drive compensation directly through various mechanisms:
| Attainment Level | Commission Rate | Earnings Example |
|---|---|---|
| 0-50% | 0% (threshold) | $0 |
| 50-100% | 8% | $200,000 × 8% = $16,000 |
| 100-150% | 12% (accelerated) | $125,000 × 12% = $15,000 |
| 150%+ | 16% (super accelerated) | Uncapped |
Make targets achievable but challenging: Industry benchmarks suggest 60-70% of reps should hit target, 10-20% should significantly exceed, and 10-20% will miss.
Ensure fairness across territories: Adjust for territory differences in market size, existing customer base, competitive landscape, and economic conditions.
Set clear timeframes: Define measurement periods—annual targets for long-term planning, quarterly for accountability, monthly for momentum tracking.
Communicate transparently: Reps should understand how targets were calculated, what resources support achievement, and how performance will be measured.
Quotas are typically specific revenue goals tied to commission. Targets can be broader and encompass activity metrics, strategic goals, or qualitative indicators.
Generally, targets should remain stable. Mid-period changes undermine trust and predictability. If changes are necessary, communicate them clearly and start at the next period's beginning.
Typically pro rata based on work time. 50% time = 50% target.
With Prowi, you can manage targets across your entire sales organization, track attainment in real-time, and automatically calculate commissions based on target performance.