In the last few weeks we’ve blogged about staggered quota quarters (click here and here to see those posts). We followed it up with a survey on the subject, where we learned that the real problem that staggered quota quarters are intended to address – that is, quarter-end bottlenecks in business execution – is clearly a significant issue. And it’s an issue that may not be getting the attention it deserves.
End-of- quarter bottlenecks are a variety of situations that may keep sales transactions from being completed by midnight of the last day of the quarter – examples include senior management and other key sales support people being spread too thin, insufficient administrative resources, or manufacturing and shipping capacity.
Fully 95% of the survey respondents said that end-of- quarter bottlenecks led to lost revenue – 63% said it happened occasionally and 32% said it happened every quarter at their company.
The respondents didn’t seem to think that staggered quota quarters were necessarily the solution to quarter-end bottlenecks – only 16% said “yes” to that question, although nearly half said “maybe.” Interestingly, though, respondents from public companies, who often face greater pressure to meet quarterly revenue objectives, were more likely to see staggered quota quarters as a possible solution to the problem. Moreover, those public company respondents were more likely – by 80%, compared to 55% for respondents from privately-held companies – to see the compensation plan aspects of staggered quota quarters as a significant factor in the decision.
Lastly, 47% of the respondents did not feel that adding finance & accounting resources would help avoid bottlenecks, while only 21% thought it would. Again, though, there was a public/private company divide, with public company respondents significantly more favorably disposed to beefing up Finance & Accounting resources.
From our perspective, the message is clear: end-of- quarter bottlenecks are a serious issue, especially for software and other high-growth companies. What’s less obvious is what to do about them.
We welcome your thoughts on this critical sales management issue.