The Flawed Math of Sales Quotas: Ryan Reisert Breaks Down Unrealistic Expectations

In a recent LinkedIn post, Ryan Reisert highlights a common but critical flaw in sales compensation plans: the disconnect between required daily activity and achievable results. Reisert, a sales expert, argues that many companies set unrealistic expectations for Sales Development Representatives (SDRs) by not properly calculating the number of activities needed to meet quota.

Reisert challenges the seemingly reasonable requirement of 100 dials per day often seen in job postings. He points out that this number rarely stands up to scrutiny when the actual math behind hitting sales targets is performed. To illustrate his point, Reisert walks through a hypothetical scenario:

“If your quota is $500K and your average deal size is $25K, you need 20 deals.

If your close rate is 10%, you need 200 opportunities.

If your meeting-to-opportunity rate is 30%, you need 667 meetings.

If your conversation-to-meeting rate is 15%, you need 4,444 conversations.

If your dial-to-conversation rate is 3%, you need 148,000 dials.”

The stark reality, as calculated by Reisert, is that 148,000 dials over 250 working days equates to approximately 592 dials per day, a figure vastly different from the 100-dial expectation.

The Consequence of Unrealistic Quotas

Ryan Reisert argues that this mathematical oversight leads to a fundamental problem in sales team management. Companies often implement compensation plans based on these flawed assumptions, leading to frustration and underperformance among their sales teams.

As Reisert puts it:

“But most companies will hire based on an unrealistic comp plan

and then blame the rep when it doesn’t work.”

This approach, according to Reisert, unfairly penalizes representatives who are expected to achieve targets that are mathematically improbable given the stated activity levels. The focus shifts from enabling success to assigning blame when predetermined goals are missed.

How Top Teams Approach Quota Setting

In contrast to this reactive and often punitive method, Reisert outlines the strategy employed by high-performing sales organizations. He emphasizes a proactive, data-driven approach where the process begins with the end goal in mind.

Working Backwards from the Quota

According to Ryan Reisert, leading teams prioritize working backward from their financial objectives. This involves clearly defining the quota, average deal size, and realistic close rates before setting activity metrics.

Reisert explains the correct methodology:

“They work backwards FIRST.

‘Our quota is $500K. Our average deal is $25K. Our close rate is 10%.’

Then they calculate: ‘We need 592 dials/day to hit that.’

THEN they decide: ‘Is 592 dials per day humanly possible?'”

This backward calculation ensures that the required daily activities are directly aligned with the business’s financial goals and, crucially, are assessed for their feasibility. If the calculated number of dials or other activities is deemed impossible, Reisert stresses that adjustments must be made. These adjustments could involve revising the quota itself, aiming for larger deal sizes, or re-evaluating the assumed close rate.

Ultimately, Ryan Reisert’s analysis on LinkedIn serves as a critical reminder for sales leaders to ensure their compensation plans and activity expectations are grounded in realistic mathematical projections, fostering an environment where sales representatives are set up for success rather than failure.