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Why Goal Setting Is Important In Sales Organisations?

Home/Goal Setting, Personal Development, Success/Why Goal Setting Is Important In Sales Organisations?

Should salespeople set personal goals over and above their sales targets?

I mean, targets are there for a reason, to motivate your sales team to perform and achieve the monetary incentives you have set for them. Many sales managers think this should be enough.

So why do so many sales people miss their sales targets? And what does this have to do with organisations setting goals for sales people?

When I ask sales people why the business has set them sales targets, and who they are for. The usual response I hear is “they are for the salesperson”, but this is WRONG.

Sales targets are not for the person, they are for the shareholders. Businesses are required to plan and forecast revenue, and so they set sales targets in line with those predictions. Recruitment then seek out candidates who they think can reach those levels of sales performance. Assuming the salespeople perform at those minimum expected levels, the business will be successful and the shareholders and investors will be happy. Notice this has nothing to do with whether the salesperson, and everything to do with the business.

Sometimes those sales targets and a salesperson’s goals will align. Sometimes.

However, this is not often the case. When you look at sales organisations, there is such a range in the level of performance, and this is rarely related to ability. Too often, good salespeople are out-performed by average salespeople who are willing to hustle and work a little harder than the rest. These good salespeople may not end up at the bottom of the leaderboard, but unless they are motivated and put in the activity that the rest do, talent alone will not make them number one.

So what is it that determines how hard someone hustles each month? It comes down to their goals and why they come to work.

What you will likely find is that salespeople will fall into one of two groups when it comes to sales targets and goals.

There Are 2 Types Of Motivated Sales People

The first, and often the more common group, is those salespeople who see the goal as the point at which they should be aiming. As soon as these individuals reach quota, they take the rest of the month off, or start sandbagging deals for next month. Like a thermostat, they know that once the temperature reaches a certain point, that is when it is time to turn off the heating. Even if they hit their number early in the month, their thoughts rarely turn to exceeding their target or smashing sales records.

Sales managers will probably be asking these kind of questions to their salespeople:

“Are you going to hit your number this month?”
“Why is your cold call activity not as good as the other team members?”
“Have you followed up on that list of leads I sent you?”

The other group of sales people are those who are motivated differently.

These people will often have their own objectives, and usually see sales and the commission they can earn as a way of supporting them on that journey. Their goals are usually far bigger than the other group of salespeople, and as a result, this drives them to be far more productive and results driven. The end result is this group don’t even focus on their sales targets, and as a result, will generate commission cheques that the others can only imagine. For these top performers, they will bring in every deal possible to maximise their commissions, and usually have enough in their pipeline to be able to do the same again next month.

Sales managers will probably be asking these kind of questions to their salespeople:

“How are you getting on with those home improvements?”
“Where are you heading on holiday next week?”
“Didn’t you already get a new car last year?”

Notice these questions are not related to sales process. Instead, they are focused around their personal goals.

Managing these top performers can often seem strange if the rest of your team is only performing averagely. Don’t fall into the trap of treating them the same as the rest of the team. Instead of managing these individuals, find a way to support them by removing barriers and resistance to them closing their deals. They will know what they need to be successful, so find a way to faciliate rather than direct.

This is why goal setting is important in sales organisations. You want as many of your sales team in the second group as possible.

Goal Setting In Sales Organisations

What sort of goals should salespeople be setting? Is it appropriate to set personal goals, or should they only be based around work performance?

It is important to be careful how you approach setting goals with your sales teams. If it is clear to them that you only want them to dream bigger so that they sell more, you might not get the response you were hoping for. It is important that your sales organisation buy into their goals, and fully recognise the connection between sales, their work performance and them achieving those goals.

A simple approach to goal setting in sales organisations is to get them to imagine what they want to buy with the money they earn, but only their commission. How much commission do they need to earn each month to get the car they want, to be able to afford their dream home, or be able to spoil those close to them?

As well as setting goals around the things they want to buy, or the experiences they want to be able to enjoy, it is important to explore HOW they want to get there.

Learning about values and motivational drivers will help you understand how else you can motivate your salespeople to achieve their goals. Ask them what is important about work. Ask them how they wany other people to see them within the organisation. You don’t need to do a full values elicitation, but you do want to know the top two or three values that get them out of bed each day.

If you have a salesperson who is motivated by developing others, have them be the example that new hires in the organisation shadow. If they want to get into a leadership role, suggest they run the sales meeting next month talking about how they improved their close rate by 50%… but that it has to be a case study on how they actually managed to do it. As a sales manager, your job is to tie these activities into their sales performance.

Of course, some salespeople will just be happy to get on and hit these new targets. Is this happens, you just managed to move someone from the first group of sales performers to the second group. Better get used to asking some different questions in your 1-1 meetings.

Once you have gone through the goal setting process with your sales team, keep a record of each of your teams key goals somewhere. It is important you check in with these goals regularly, showing both that you understand your salesperson and care about their achievements outside of work as well as inside. You may want to encourage your team members to print off reminders of their goals, such as pictures of what they want to buy, and keep them at their desk a reminders of why they need to remain focused and productive while at work.

Why Goal Setting Is Important In Sales Organisations?

But what if your salespeople do so well that they leave or get promoted?

Losing good salespeople can be a concern for managers, but this is where you need to think about retaining talent across the organisation. Do you have different tiers for your salespeople to progress through? Are their opportunities for training and development that are only open to top performers? Think about the kind of incentives you can offer your top performers over and above just the financial rewards. If you are limited by the size of your organisation and promotion isn’t really possible, think about how you structure their commission plan to reward increasingly better performance, such as kickers after 100% or sizeable quarterly incentives that would be in the interest of both the business and the salesperson.

What if we train them and they leave? What if we don’t and they stay?

what if we train them and they leave, what if we don't train them and they stay

If you are seen as someone who is able to get their sales team performing month-after-month, someone who can take average performers and get them exceeding their target, it isn’t only going to be your team that are at risk of promotion… people are going to start noticing you too!

At the beginning of each new month or sales quarter, think about running a goal setting session with your sales team. Get them focused on their personal goals and the level of performance that will support this, rather than just their sales targets. Find out what motivates them, then show them how exceeding their normal sales performance can accelerate this. Check in regularly on how they are progressing toward their goals, and hold them accountable for this target, rather than just their daily sales activity.

Not only will this improve the quality of the 1-1 meetings you have with your team, it will make a nice change from having to ask how many cold calls they have made.

If you want to improve not just the performance of your sales team but also your relationship with them from a motivational, leadership perspective, this is why goal setting is important in sales organisations. Take some time out at the beginning of each month or quarter and get your team to identify their goals and what they are working towards. Goal setting sessions like these can last as little as thirty minutes, so are a great exercise to include in your sales meeting at the beginning of the month. Alternatively, make it part of your 1-1 sales meeting with each member of your team. Perhaps you will even want to share your goals with your team so they know what you are working for and how they can help you get to your goals.

By | 2018-06-28T12:15:05+00:00 June 28th, 2018|Categories: Goal Setting, Personal Development, Success|0 Comments

About the Author:

Dan Storey has worked in and around the world of motivational seminars for many years. As the author of Next Level Persuasion, much of his work involves training sales and leadership teams in how to communicate and persuade more effectively, using techniques from areas such as neuro-linguistic programming (NLP), behavioural psychology and personal development. His passion is in trying to understand the motivation and psychology behind why we do what we do, and writes regularly on this topic as well as other on practical positive psychology.

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