CSCP Territory & Quota Design 2 — Questions and Answers
Question 1: What does a 'quota attainment distribution' analysis reveal to a compensation designer?
- The total compensation cost of the sales force
- Whether quotas are set at appropriate difficulty levels across the team (Correct answer)
- Which sales reps should be promoted to management
- The accuracy of CRM opportunity forecasts
Correct answer: Whether quotas are set at appropriate difficulty levels across the team
Analyzing attainment distribution shows whether quotas are calibrated correctly—if too many reps are at 100%+ or below 50%, quotas may be too easy or too hard.
Question 2: The 'hockey stick' problem in quota attainment refers to:
- Reps who consistently exceed quota by large margins
- A pattern where most sales close at the very end of the quota period (Correct answer)
- Territories shaped like a hockey stick on a map
- Quota curves that accelerate too steeply in higher tiers
Correct answer: A pattern where most sales close at the very end of the quota period
The hockey stick effect describes a pattern where sales activity and closings are heavily concentrated in the final days of a quota period, often distorting forecasting and cash flow.
Question 3: When assigning named accounts to territories, which criterion is MOST important for ensuring plan fairness?
- Alphabetical order of account names
- Proximity of the account to the rep's home
- Consistency of account potential value across territories (Correct answer)
- The tenure of the sales representative
Correct answer: Consistency of account potential value across territories
Ensuring each territory contains accounts with comparable total potential value is the primary fairness criterion when making named account assignments.
Question 4: Which quota-setting approach is MOST appropriate for a newly launched product with no historical sales data?
- Historical trend analysis
- Bottom-up rep input
- Market potential and activity-based estimates (Correct answer)
- Prior-year average attainment
Correct answer: Market potential and activity-based estimates
Without historical data, market potential estimates combined with activity metrics (calls, demos) provide the most rational basis for new product quotas.
Question 5: A 'geographic territory' differs from a 'vertical territory' primarily in that:
- Geographic territories are based on industry segment while vertical territories are based on location
- Geographic territories are defined by physical location while vertical territories are defined by industry or account type (Correct answer)
- Only geographic territories can have quotas attached
- Vertical territories always have larger revenue potential
Correct answer: Geographic territories are defined by physical location while vertical territories are defined by industry or account type
Geographic territories are carved by region or location, whereas vertical territories segment accounts by industry, company size, or customer type regardless of location.
Question 6: What is 'quota relief' in the context of territory transitions?
- A temporary reduction in quota to account for lost productivity during rep or territory changes (Correct answer)
- Eliminating quota requirements for senior sales reps
- Increasing quota to compensate for larger territories
- A bonus paid when a rep exceeds quota
Correct answer: A temporary reduction in quota to account for lost productivity during rep or territory changes
Quota relief provides a temporary reduction in targets when reps take on new territories or accounts, acknowledging the ramp-up time needed to build relationships and pipeline.
Question 7: Which of the following BEST describes 'overlay quota' in a sales compensation plan?
- A secondary quota assigned to a specialist or overlay rep who supports field reps on specific products (Correct answer)
- A quota that is applied on top of base salary calculations
- A quota that overlaps two fiscal quarters
- A quota penalty applied when reps miss targets
Correct answer: A secondary quota assigned to a specialist or overlay rep who supports field reps on specific products
An overlay quota is assigned to a specialist rep (such as a product specialist or solutions engineer) who assists field reps and has their own performance targets.
CSCP Territory & Quota Design 2
What does a 'quota attainment distribution' analysis reveal to a compensation designer?