Restaurantology Blog

Certain restaurant tech quotas are really un-SMART

November 21, 2023 | Go-to-Market (GTM) Office Hours | by Grant Gadoci

If you’re in SaaS sales, you know quotas are the lifeblood of revenue growth.

For most sales professionals in the restaurant tech industry, quotas are typically MRR or ARR bookings measured monthly, with assessments—and sometimes adjustments—conducted quarterly.

While attainment metrics and funnel forecasting remain essential for tracking progress and ensuring predictable business growth, the way many restaurant tech quotas are set can cause big problems, sometimes almost immediately. And if this happens, if we allow internal or external factors to influence targets that are ultimately deemed un-SMART, we should brace ourselves for how they will negatively impact individuals, entire teams, and the restaurant tech space as a whole.

Ready MarketMindedTM friends? Let’s talk about it.

Grant Gadoci
CEO @ Restaurantology | GTM, RevOps and Revenue R&D for B2B Companies Targeting Restaurants

There’s an art to crafting meaningful quotas. And just like art, quota generation certainly isn’t for everyone.

Striking a balance between your company’s ambitious growth and achievable targets is intricate on its own, and complicated even further by the involvement of profit-hungry boards or the complexities of underlying market conditions. Great quotas can inspire individuals and motivate entire teams, while bad quotas can suffocate and demoralize even the best or longest-tenured employees.

Setting a course that challenges existing limits while ensuring quota-carriers have the tools and resources they need to be successful in their role is something that I’ve personally been passionate about—and studying—for the past 15 years. Now, before we dive into my thoughts and opinions on restaurant tech quotas in detail, I want to start by covering two quick things:

  1. It would help if you read 2 previous office hours that provide great context before diving in (It’s a competitive time to sell software to restaurants and The restaurant industry’s SaaS pricing paradox); and,
  2. This article assumes you’re familiar with SMART criteria and goal setting.

From there we can begin understanding where good quotas soar, and lousy quotas push people out the door.

Read more: What makes a good or bad restaurant tech sales quota →

What most companies get right: S-M-T

Most restaurant tech companies do a great job fulfilling three aspects of SMART quotas:

  • They are Specific, most commonly represented by MRR or ARR targets.
  • They are Measurable, as these metrics can be tracked with precision.
  • They are Time-bound, thanks to monthly and quarterly assessment cycles.

With varying degrees of effort versus automation, most companies can assign, track, and evaluate quotas and quota attainment without having a full-time Ops role.

The pitfall of irrelevant quotas: A-R

Too often I see restaurant tech companies accept top-down quotas from their investors without batting an eye. While inwardly “relevant” to the company’s aggressive growth targets, they sometimes outwardly ignore what the industry can bear.

Have a board-approved number tied solely to profitability milestones and think that’s good enough? Want to just “double revenue again next year” and leave it at that? Sorry if this sounds harsh, but signing up your entire rev org for a number that you need but haven’t taken the time to research is… kinda selfish.

Growth is exciting. And yes, big numbers can sometimes get reps to pedal faster. But wild numbers wreck shop, quickly.

Regardless of where your targets come from, and regardless of how high those numbers may be, you must force yourself or your Ops team to clearly and reasonably prove your quotas are Relevant by associating each quota to:

  1. A serviceable, obtainable part of your TAM that is easily discoverable in your CRM;
  2. Products that exist (or that will reasonably exist) that prospects will happily use and pay for;
  3. Conversion rates and pricing that aren’t insane; and,
  4. Human beings that exist, work for you, and are equipped with the training and systems they need to be successful.

Taking your giant quota and then mapping out these 4 steps in your head does not count. Deeming just 3 of these as important to your circumstance and then ignoring the last one (probably the inconvenient one) does not count. Honestly, skipping even one of these will not work.

Without the ability to prove your quotas are relevant, realistic, and resourced—in writing so you can “show your work”—you’ve failed the R portion of our SMART goals criteria, which will trickle down and wreak havoc on your team’s perception of what is understood to be Achievable or Attainable.

The consequences of a disconnect between quotas and reality

I promise I won’t “gloom and doom” you to death, but if I skip over the devastation I’ve seen caused by team-wide unattainable quotas, I’m doing no one any favors. I’ll be brief.

When quotas are set unrealistically high without sufficient detail or proof to back them up, it creates an environment where sales reps are set up for failure. This can happen immediately or over the course of several months. For restaurant tech, lost faith in hitting quotas that have been adjusted for restaurant “seasons” typically hits you between the eyes in Q2.

Read more: How to combat seasonal buying cycles in restaurants →

High stress levels, burnout, and high turnover rates sound fun? That’s just the beginning. The pressure to meet unattainable quotas can also lead to unethical sales practices, and can even blacklist future recruiting efforts when disgruntled employees take to the interwebs.

Conclusion

Restaurant tech companies have a knack for running lean sales orgs with massive targets. Creating SaaS quotas happens fast, often in a room with just a few people, and unfortunately the output lacks the support needed to justify such lofty goals. That, to me, is pretty un-SMART.

While these quotas may make sense from a business growth or profitability perspective, they often ignore the unique challenges and dynamics of selling to restaurants. This disconnect leads to unachievable goals, stressed and burned-out sales reps, high turnover rates, and predictable underperformance against unvetted, top-down growth targets.

To truly drive growth and success in the restaurant tech space, it’s high time for companies to revisit their quota-setting processes. Quotas should not only be Specific, Measurable, and Time-bound but also Achievable and Relevant not just to what the board wants, but to the industry they serve. By doing so, companies can create a more sustainable and successful sales environment that benefits both their bottom line and their sales teams.