What’s the best way to demotivate your salesforce? Unilaterally setting a sales target and then shoving it down their throats.
“People, especially salespeople, don’t like being dictated to,” says Joel Deceuster, founder of Deceuster & Associates, a consulting and business coaching firm. He believes the old school of sales management tells people what to do. But the new school invites salespeople into the process of setting quotas and goals, allowing them to figure out what they are capable of achieving.
If you think this sounds like letting the inmates run the asylum, think again. According to one manager, the great paradox is that salespeople will invariably come up with a more aggressive sales goal when left to their own devices than if their manager sets the target.
“If you tell a salesperson he must do $2 million dollars next year, he will call you crazy and say it’s impossible,” says the sales manager. “But if you work with salespeople and encourage them to analyze their accounts, they’ll come up with a number that is consistently higher than what you would have set yourself. It’s really a shocking phenomenon.” So shocking that this manager often has to encourage his people to adjust their optimism and set slightly more realistic goals.
The secret sauce in the goal-setting formula is accountability. If salespeople feel like they helped shape the overall plan, they have a personal stake in the outcome. “By including your salespeople, you give them added motivation to succeed,” says Deceuster. “But without inclusion, salespeople will figure out the best excuses in the world why they can’t achieve.”
The Numbers Game
But what happens when upper management devises a wildly unrealistic sales target and drops it down from above? What should a sales manager do? Some managers who have been in this position say it is impossible to push back against management without losing their jobs. Likewise, it is imprudent to force the number on salespeople and expect them to perform.
“You work for the company, so it’s your obligation to reach the goal, no matter how unrealistic,” says one sales manager. “But it’s also your obligation to protect your salespeople from arbitrary numbers.” This manager suggests figuring out other ways to remunerate your salespeople other than simply quota-based commissions. That might mean convincing management to offer greater incentives or a higher base salary.
When all is said and done, however, John Schirmer, group publisher at Reed Business Information, says he needs to deliver against a number set by the corporate office. At Reed that number is not determined in a vacuum, but rather is based on direct input and data from people in the field. “Our sales targets start with the individual salespeople doing a strategic assessment of their accounts and territories, evaluating everything from revenue flow to run rates to new areas of growth,” he explains. “We then take that data from the street and match it up with corporate objectives.”
Once the goals are set, Schrimer, who manages a team that sells everything from traditional print ads for magazines to banner ads for online properties, meets with his people to review those goals on a weekly and monthly basis. “There has to be a continual dialogue,” says Schrimer. “If you set a goal and don’t regularly assess what is happening, you’ll never reach the target.”
One Step at a Time
Michele Michler, a territory manager for ThomasNet, an electronic marketplace that connects buyers and sellers of industrial products, says it’s crucial for salespeople to establish a set of daily, weekly and monthly benchmarks that help them measure and manage their ultimate goal. For instance, if one of her salespeople has a target of $1 million, she doesn’t ask them to focus on the actual dollars, but the activities that will help them reach that mark.
Michler believe it’s important to identify and measure several key success indicators, such as the number of follow-up appointments in a week, the number of networking events you’ve attended, or the number of contracts you’ve renewed. She even establishes weekly and monthly contests for her salespeople based on these very metrics. “By breaking goals down into smaller, easier-to-digest targets, you can start seeing the impact immediately,” she says. “It can be much more effective and rewarding, rather than simply striving for year-end results that are way down the road and seem so far out of reach.”
Another effective tactic for setting and managing sales goals is to step back and evaluate what went right and what went wrong the previous year. After all, if you don’t learn from your mistakes, you are doomed to repeat them. And if you don’t learn from your successes, you can’t replicate them.
“I have my teams write out three lessons from their successes and failures that can guide them as they move into the future,” says Deceuster. On the negative side, he finds that salespeople consistently believe they do not have enough time in the day to get things done, which prevents them from reaching their ultimate goal. The trick, says Deceuster, is getting them to reframe negative associations in a more positive light. For instance, you can’t change the number of hours in the day, but you can always find time to do what is important by prioritizing your tasks and systematically checking items off the list one at a time.
Here’s an example of Deceuster’s method in action. One year, he worked with a small staffing firm comprised largely of women of in their 50s. The firm was losing sales to more nimble competitors that were younger and more tech-savvy. “The message I kept hearing from these women is ‘you can’t teach an old dog new tricks,’” says Deceuster. “The reality, however, is that by leveraging their experience, they could achieve unparalleled success.” By shifting their negative self-image to a positive one, the women were able to gain back their confidence. In just one year, the firm doubled its annual revenue from $3 million to $6 million, says Deceuster.
A Team Effort
Many sales managers employ a consultative approach when helping to set goals for their staff. Schirmer of Reed Business first asks his team members to map out where they want to be financially and how much they want to earn. He then tells them to work backwards from there. “Let’s say a salesperson wants to earn $100,000 a year, and to get that, they need sales revenue of $1 million,” he says. “Together, we’ll look closely at each of their accounts and identify areas of growth where new sales can come from.” He wants his salespeople to be aggressive, but he is also careful that they don’t set themselves up for failure. For instance, a sales target of $5 million might be overly optimistic if the sales representative in question has never surpassed $1 million in his career.
Another effective tactic is encouraging sales staff to share their goals with the entire team and other people in the organization. When goals are shared, people become more vested in the outcome and ultimate success. “We break commitments to ourselves all the time, but once we inform friends, family and colleagues of our goals, the stakes are instantly raised,” says Lori Richardson, president of Score More Sales, a sales effectiveness organization. People are less likely to back away from their goals without giving it a lot of thought and reasoning first. What’s more, by trusting others with your goals, you acquire a support group that can help you stick with it and spur you on to success.
Finally, it’s critical for sales managers to celebrate success and publicly acknowledge outstanding performers who meet and exceed their goals. “Salespeople respond tremendously to positive reinforcement,” says Schirmer. Besides money, his organization rewards top performers with a number of perks such as membership in a Presidents Club and inclusion in the companywide newsletter. “You can never praise salespeople enough,” he says. “It’s not just money that motivates them, but recognition that they’re contributing to the success of the business.”