Assigning Top-Down Quotas

Now it’s time to assign the quotas for each territory. In this lesson, we will focus on top-down quotas, and in the following lesson, we will assign bottom-up quotas.

Our first step will be to set the quota baseline. A baseline refers to the starting reference value in the quota- planning/quota breakdown process. The baseline may represent the prior period's historical performance, the current period's opportunity data, the custom value, or a combination of the listed options.

To set the quota baseline, select a root territory and open the Quotas panel. The Quota Planning icon () will open the Quota Planning screen.

There are a few options available from the Quota Planning screen, outlined in the table below:

Name	Description
Column Search	Opens filters for the columns
Expand All	Expand all rows for accounts/products/periods
Collapse All	Collapse all rows for accounts/products/periods
Audit History	Open the audit history
Download	Export the records shown in the screen to an Excel file
Column Settings	Customize the column names and change the order of the columns

The Global Base Quota Configuration screen is available by selecting either "Not Set" or the value that is in the Quota Baseline column on the Quota Planning screen. When calculating the quota baseline, up to six data elements can be used. The elements can be configured based on custom values, historical or pipeline data, and quota values referencing any quota target types in the territory program. Following are some examples of quota baseline calculations:

• Use multiple years of historical data. For example, use 50% history from 2022 and 50% from 2023.
• Use actual and adjusted values for the same year. For example, 50% actual values from 2023 and 50% adjusted values for 2023.
• Use projected, high, and low values from opportunity data. For example, use MIN values of projected, high, and low opportunity data using the aggregate calculation type.

Once a data element has been selected, additional settings for that element can be configured using the Settings icon (), which opens a panel on the right. The following data elements and each element’s available settings for the calculation are outlined in the table below:

After entering the calculation elements, there are additional optional settings that can be configured under the Settings Tab:

• Quota Baseline: outputs calculations to the Quota Baseline column in the Quota Planning and Quota Breakdown workspaces.
• Adjustments: outputs calculation results to the Adjustment column in the Quota Planning/Quota Breakdown workspaces. Both output options can be engaged at the same time. The following options are available for adjustments:
  • Calculation Value x Modifier: Apply a percentage multiplier. For example, you can specify -100%, which converts a positive value into a negative value, or conversely.
  • Include Locked Records: When selected, adjustments are applied to locked records.

Use non zero values only/weighted redistribution: Allows you to rebalance the non-zero components if any component set for the quota baseline calculation is 0 or null. By default, this option is disabled.

Cascade (only displayed for territory programs that have Product as the primary dimension): enables the application to allocate quota values to the immediate children.

• Override Custom: allows you to override the cell values with individual baseline settings.
• To Products and To Categories: enable either of these options to cascade down the quota values to all products or categories respectively.

Once the quota values have been calculated, Total Insights calculations are available by choosing the ‘i’ icon in the quota heading.

To learn more about baseline quota calculations and insights settings, watch this video:

Custom formulas enable you to use historical, pipeline, quota, and custom values in custom formula calculations.

When setting the quota baseline, you can choose Custom Formula as the calculation type. As with the other calculation types, you can select up to 6 data elements for the calculation. The application numbers the data elements in the order that they're added. The image below depicts an example in which 3 data elements have been added. Each data element is preceded by its identifier number, which can be referenced in the formula definition.

Once you've selected the data elements and configured their respective settings, choose Custom Formula to open the formula pane on the right and add a custom formula that uses the data elements as variables. To define the formula, you can use operators between the data elements, which are referenced using the assigned IDs, for example, #1, #2, and so on.

The custom formula functionality supports the following:

• The custom formula functionality supports the following operators in the formula: +,-, *, /, %
• Use of AVG, MIN, MAX, MED, and STDDEV functions on up to 6 data elements, for example, AVG(#1,#2...#6) MED(#1,#2...#6).
• Aggregate and other functions can be combined, for example, AVG(MIN(#1,#2),#3) and MAX( #1+100,(#2+#3)).
• STDDEV provides the standard deviation of the given values.
• The application ignores extra spaces.
• The function name is case-insensitive.
• Elements can be grouped with parentheses.
• Double hashtags (##) indicate the total value of the data elements.

As an example, if you want to calculate the adjustment budget of USD 10,000 proportionally to last year's historical value (#1), the custom formula is as follows: $10,000.00 *#1/##1, where #1 is the historical value and ##1 is the total history (sum from all elements).

Once you've added the formula, choose Validate Formula (). If there are no issues with the formula, the formula is displayed in blue and green above the text box. Otherwise, an error displays above the Custom Formula textbox to indicate that the provided formula is invalid. Invalid tokenized elements are displayed with a red background.

Enable the Fail Safe Value option if there's a chance that the data elements can have invalid values in some cases. You can enter a fail safe value to ensure that the calculation completes for all elements, even if there are any failures. If enabled, the application displays the specified value for the quota baseline value in any record where the formula calculation fails. For example, if the formula is set to #1/#2 and the element's value for #2 is zero, the calculation fails and the specified fail safe value is displayed instead. If the fail safe value isn't enabled, the whole process cancels if any element's calculation fails.

To learn more about quota baseline calculations and custom formulas, watch the following videos:

Administrators can customize labels in the Quota Planning and Quota Breakdown workspaces. Customizing labels by quota target type enables you to reflect your organization's concepts and terminology. For example, for the revenue target type, you can rename quota to budget to meet your business needs. You can also hide or reorder columns in the table to reflect their importance in your forecasting or calculation processes. These customizations can be applied to all quota target types, or you can configure unique values for individual quota target types.

To learn more about baseline quota calculations and table customization, watch this video:

The Distribute action initiates the quota distribution and acceptance workflow. This workflow allows sales managers to provide feedback into the quotas that are used for each of their territories and sub-territories. The distribution action takes the current target values for the given territory or territories and replaces them with the pending target values.

As we saw earlier, when using the top-down methodology, the top-level quota is distributed to each territory, one level at a time, by the director or manager at each level, repeating until the quotas are assigned to the rep level territories.

In our scenario, we are distributing the top-level quota to the Vice President of Sales for North America. The vice president can then allocate quotas for the different territories on the next level down in the hierarchy.

Once you have distributed the quota on the top level, you can then distribute quotas to lower levels. This can be done in three different places, depending on your needs.

• Territory Program Detail tab: This distributes quotas for all targets to the affected territories.
• Allocation workspace: This distributes quotas for all targets that are associated with the subordinate territories.
• Manage Quotas: Choose Save and Distribute to distribute quotas for all targets.

Now that the quota has been distributed, the payee assigned to the top-level territory can allocate quota values for each dimension.

Top-down quotas can be set in a number of ways. The first option is an even distribution of the overall quota across each dimension. If we have historical and opportunity pipeline data, we can use either of these, or we can use a weighted combination of historical and pipeline data.

Let’s look at a few examples of when we might use each allocation method. Bikes In Motion has a long history of sales in the United States and Canada, so they have enough historical data to forecast future sales, and therefore set realistic quotas. For this scenario, using historical values would be a good choice.

On the other hand, sales in Europe have only taken place for six months, which is not enough data to predict future sales. However, the company has built up a considerable pipeline of sales prospects, along with reasonably accurate estimates of the probability for each opportunity. For this scenario, Bikes In Motion would use the Pipeline option to allocate quotas.

Because we have historical data and we are using accounts as our primary dimension, let’s see how to use historical data to allocate quotas by account.