What Is OTE in Sales? Why Achievability Matters More Than the Number

The OTE - A number everyone asks and almost no one questions

 "What is the OTE?" 

The number you most likely have asked if you have interviewed for a sales role, and have most likely been asked by a sales representative if you are responsible for hiring them.

For those who don't know, OTE or On-Target Earnings, simply means how much a salesperson can earn, if they hit 100% of their targets. A salesperson gets their fixed salary plus their commissions and incentives, which would equal their OTE. Nothing too exciting there! 

However, after a few years of working with sales teams I've realized, that while people spend an inordinate amount of time asking about the OTE, very few questions get asked about whether it's actually achievable. 

A company might put forth a 20 lakh OTE; but if the reps don't have enough opportunities to hit this, or leads are being missed with missed follow-ups, or half the pipeline is currently only existing inside somebody's head... Then maybe the number in the proposal isn't a plan of how a salesperson can earn money but a list of unrealistic wishes. 

The best sales people are well aware of this. 

They know the importance of an OTE not only because of the commission and incentives associated with it but because it's about having a fair chance to earn them in the first place. 

• And the best way to earn that chance? Consistency.
• Consistent prospecting, 
• Consistent follow-up,
• Constant visibility on the activity in the entire pipeline. 

Sales teams rarely lose deals all at once, and usually only lose deals because someone forgot to follow up, or send an email, or reconnect with the prospect that was actually really interested just three weeks prior. 

We've all been there, 
Remember this one prospect as you're brushing your teeth, it's midnight, you forgot the email, only to find out they closed with someone else two weeks prior. 
Successful sales teams spend more time on their processes of achieving an OTE than they do in chasing the actual OTE. 

After all it's simple; the easier it is for a salesperson to maintain visibility of and manage their opportunities, the easier it is for them to close their target. 
And when the target is hit the number in the offer letter becomes number in the bank account. 

In essence, the OTE is much more than just a compensation figure it is an assessment of whether you have the process and the support in your sales teams that enables them to be successful. 
Because no salesperson got into sales with the aspiration of only "almost" achieving their incentive plan.

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