Assigning Bottom-Up Quotas

Objective

After completing this lesson, you will be able to Configure, distribute, and allocate quotas in a bottom-up territory program.

Calculating Quota Parameters

The process of assigning bottom-up quotas is very similar to top-down quotas, but you have the option to either calculate and distribute, or just distribute quotas without calculating.

To learn about the setup for bottom-up quotas, watch the following video:

As with top-down quotas, the first step is to set the quota baseline. However, before setting the baseline, we first need to configure the quota calculation parameters. These parameters allow us to select a baseline period to calculate the year-over-year growth percentages based on historical performance, and to set the guardrails for growth targets. The quota calculation parameters are global to all the territories in the selected territory program.

Quota calculation parameters are set during the territory creation process; however, they can be updated at any time.

Update Quota Calculation Parameters for a Bottom Up Territory Program

Steps

  1. Open the territory program.

  2. Navigate to the Detail tab for the program.

  3. From the Quota menu, select Base Calculations.

  4. Select an ending baseline period and the number of periods to use for historical data.

  5. Enter the values for the growth targets and attrition relief.

  6. Select Update and Calculate.

Result

Update Quota Calculation Parameters for a Bottom Up Territory Program

Business Example

In this exercise, you will update the quota calculation parameters for a bottom up territory program and set the quota baseline for the program.

ExerciseStart Exercise

Setting up Bottom up Quotas

The Ending Baseline Range: displays the period in the historical data that the application uses to calculate the Baseline Quotas. For example, if your historical data is for 2022, select December 2022.

Baseline Periods: specify the number of periods to be considered in the baseline quota calculation. In this case, the period is the period type for the entire territory program. In this scenario, the period type is year; therefore, if you have one year of historical data, you would enter 1 in this field.

Growth Target: displays the growth percentage of each rep-level territory in the territory program with respect to the quota baseline. This value is applied to the base quota value. For example, 10% of Growth Target % results in 110% of the base quota.

Attrition Relief: allows you to apply a depreciation percent to the growth target of each territory in the program. This is considered for special scenarios, such as churn in sales force, less experienced sales teams, and so on.

Variance Boundaries: allow you to set minimum and maximum values for the Growth Target and Attrition Relief fields. These values are then used in territory quota calculations, and the application rejects any value that is outside the specified range.

The Quota Reduction Factor: allows you to reduce the quota as it rolls up the territory hierarchy.

The final quota is then calculated as Base Quota * (100% + Growth Target % - Attrition Relief).

Let’s look at a scenario. In the image above, the growth target is set to 10%, with a 5% minimum and a 25% maximum variance. Attrition relief is set to 2% with a 5% maximum. If the Base Quota is $1000, the final value would be 1000 * (100% + 10% - 2%) or 1000 * 108%, for a total of $1080.

Once we have set the baseline quota, we can see it by navigating to the Quotas tab for the root territory and looking at the Calculated column.

To learn more about bottom-up quotas, watch the following video:

Setting the Quota Baseline For a Bottom-Up Quota

The next step is to set the quota baseline. This process is similar to that of a top-down quota, but the difference is that this time, we can calculate the baseline based on historical data and the calculation parameters we have specified. Once the baseline has been calculated, an administrator can manually change the values if needed.

Once the calculation is complete, you can view the calculated baseline and make changes if needed.

View or Update the Calculated Baseline

Steps

  1. Navigate to the Territory Tree tab.

  2. Select any territory.

  3. Choose the Quotas tab on the right pane.

    • Baseline: Displays the historical data for the periods that you specified in Baseline Range.
    • Calculated: Displays the values based on the specified parameters in the Growth Target and Attrition Relief fields.
    • Pending: Displays the same value as Calculated, unless the Pending value is locked.

Bottom-Up Quota Results

To learn more about bottom-up quota results, watch the following video:

Distributing Bottom-Up Quotas

In the previous lesson, we saw how to distribute quotas that use a top-down methodology. When using a Bottom-Up methodology, you can distribute quotas without running the calculation (simply using the existing pending values for all target types for the territory), or you can calculate and distribute at the same time.

When distributing quotas, you can modify the baseline quota parameters. If you adjust these parameters, your changes will override and update the default settings on the program.

As with top-down territory programs, the Distribute menu has three options:

  1. The Distribute option triggers quota distribution that affects the first-level roll-up territories.
  2. Base Bulk Distribute enables you to distribute quotas to all base territories of a territory program. All managers and sales reps will be able to accept or comment on their quota assignments, provided the Workflow feature is activated, and all sales managers will be able to allocate their targets to subordinate territories using the quota allocation workspace.
  3. Overlay Bulk Distribute enables you to distribute quotas to all overlay territories of a territory program. Quota distribution for overlays typically occurs after base territories have had their quotas distributed.

Distribute a Bottom-Up Quota

Steps

  1. Open the territory program.

  2. Change the Program Status to Open (Territory and Quota).

  3. From the Distribute menu, select Distribute, Base Bulk Distribute or Overlay Bulk Distribute.

  4. Make any adjustments to the calculation parameters.

  5. Select Calculate and Distribute or Distribute.

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