Why Selling Without Sales Goals Is Bad for Sales
The following headline read in The Dallas Morning News: “Wells Fargo says it’s dropping sales goals.” I couldn’t disagree more. Dropping sales goals is bad for sales, for management, and for customers.
You may have read about the problems the bank had in signing up new customers. Newspaper reports discussed an out of control sales culture. Management wanted sales numbers up at any cost; cross selling was the primary strategy. The Wall Street Journal reported that Wells Fargo opened as many as two million deposit and credit-card accounts without customers’ knowledge.
Too many managers set the wrong goals.
It seems that the sales culture was hijacked by a few misguided managers. Yes, the “sell at all costs strategy” is wrong; eliminating sales goals isn’t the solution. The real problem is that the goals that management set were the wrong goals.
In Wells Fargo's case, salespeople were rewarded by the number of accounts opened, not the accounts that were used by new customers or even profitable accounts that were set up. That’s how the culture got hijacked in the first place. Salespeople were encouraged to set up new business no matter how good (or bad) it would be for the bank.
Sales managers have to be very careful when they set their sales goals--they may end up getting more of what they reward.
I’ve seen sales programs where the number of sales calls is measured--that’s a wrong sales goal. You could theoretically drive to an account, run in, say hi to the receptionist, ask for a meeting with anyone, not get it, and then leave. You may think you've just made a sales call--except you haven’t.
I’ve seen salespeople count this in their sales call quota, and management accept it. I knew an unsuccessful salesperson who would brag about the numbers of sales calls he was making. The problem was he was also the least successful salesperson on his team. He considered a sales call as any time he walked into a business, even if absolutely nothing happened while he was there.
That’s not a sales call.
Set the right goals.
I encourage sales managers to set goals by establishing viable prospects. There should be discussions between managers and sales professionals about what a viable prospect is. Yes, I’ve seen lists of prospects who on close examination would never be considered viable because there wasn't a a customer budget, there was no customer need, or there was no knowledge of the customer.
Once a list of truly viable prospects has been created, management can set progress goals. These goals should specify what needs to happen as a salesperson moves through the sales process; management would measure the progress, whether the salesperson is moving forward or not, and at what pace.
Why it’s wrong not to have sales goals.
Imagine you went to a professional football game, but this one would be different. Instead of keeping score, the two teams are simply going to play. You are going to watch tackles, passes, and other activities, but there will be no score. How are you going to determine which is the better team? Maybe you will base your decision on which uniform you like better; or perhaps your decision will be based on which player you prefer. These are not meaningful ways to evaluate performance.
So now, how do you think management can evaluate sales performance if sales professionals have no sales goals? What if it's based on whom they like or something other than sales performance? This would not be fair to the salesperson.
When salespeople know they’re not being measured, their performance suffers. Why should they care and work harder if everyone is going to be evaluated by a nebulous system? Customers suffer when salespeople don’t take care about their companies. Sales goals that are set strategically and with intention produce sales, motivate salespeople, and take care of customers.
Wells Fargo has taken action to rethink its corporate culture. I hope the company also rethinks its no sales goal plan; it would be a mistake to continue it.
