Quota Relief

There are only two scenarios when we provide quota relief at our venture-backed, B2B SaaS company. However, in this article I'll explain the different kinds of quota relief and how to use them.

• What is quota relief?
• Asking for quota relief
• Calculating quota relief

What is quota relief?

Quota relief has a few definitions depending on the context:

1. Quota relief for new sales rep hires: The reduction in quota granted to new hires during their ramp period. For our high-velocity sales team, (avg. 30 day sales cycle) we expect the following ramp and provide relief for the balance: Month 1 - 0% attainment, Month 2 - 25% attainment, Month 3 - 50% attainment, Month 4 - 100% attainment.
2. Quota relief for product sales: The reduction in quota granted as a bonus when sales reps achieve a positive objective, such as closing the sale on a higher-margin product.
3. Quota relief for vacation/PTO: The reduction in quota granted to sales reps while they are on paid leave, so as to compensate for missing sales days. We have never granted relief for vacation.
4. Quota relief for leave of absence: The reduction in quota granted to sales reps on leave due to emergencies or personal matters (parental leave, ill health, taking care of a relative, etc.), so as to compensate for missing sales days. We don't do a quota relief for these instances. Instead, we provide a guarantee of 75% of their earned commission for the last 6 months during their leave of absence. This has been generous of us, but this is how our B2B SaaS company does it.

In most cases, quota relief is simply the ad hoc adjustment of a rep’s sales quota in the name of fairness — intended to lessen a rep’s stress and provide income stability.

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Asking for quota relief

You should start by having standard policies for quota relief.

A formal quota relief policy need not take every possible reason or extenuating circumstance into account. It only needs to cover the most common scenarios — everything else can be handled on a case-by-case basis.

There will be instances when reps are asking for quota relief based on new, unique circumstances. I'd recommend you just consider these as they come up, but think about how your decisions will set precedent for the future.

Calculating quota relief

This is how you might calculate quota relief for the different scenarios above: 

1. New hires: Let's say a new rep completes their month 2 and their ramp quota is as listed above (25% attainment). You effectively provide relief for the remaining 75%. In this case, if they hit 25%, they get paid their full quota.
2. Product sales: Let's say you offer a higher-margin product that you want your reps promoting because it's better for the business. You might say a rep gets 1.2X quota relief for each dollar closed. So if they signed a customer on the higher-margin product for $10,000, they get credit for $12,000 towards their monthly quota.
3. Vacation/PTO: You may say you get 50% quota relief on your vacation / PTO, which would effectively mean that the rep gets a guaranteed commission for attaining 50% of their quota.
4. Leave of Absence: This would be calculated the same as vacation / PTO quota relief. It just depends on if and how much you want to offer reps.

Of course, it's up to you to design your quota relief program around your company’s specific commission structure. 

You can see how we structure sales comp in the Sales Compensation Plan Template and then how we calculate commission for reps each month using our Sales Commission Calculator Template.