It’s near year-end, and it’s time to meet with your individual sales teammates to set goals and expectations for the new sales year ahead.
I get feedback on this process that ranges from “We don’t set goals at all”, to “We dictate goals and hope for the best,” and everything in between. Many avoid this completely, at their peril.
Unfortunately this process, many times, follows along two typical paths. The first one is where management looks over the cash needs of the company, which get’s divided up into regions and districts, and down to the individual sales person. These “quotas” are handed to the sales person, like it or not, without their buy-in or even their input.
The second difficult scenario is where sales management sits with a sales person and a negotiation ensues to get to a goal everyone “can live with”. Both parties gear up for the encounter with the manager coming in with twice what th
ey need, and the sales person entering the conversation with half what they can accomplish and they “settle” in the middle somewhere. The entire process is to gain agreement so that accountability and consequences can be brought to bare. But where is the plan? Where is the discussion and plan around the individual behaviors needed to make this goal happen? And, is it even the right sales number for the organization in the first place?
Does this ring a bell? Isn’t it time for a change? Remember, “We manage what we measure”, and “Every journey of 1,000 miles begins with the first step.” The following is a solid system to set sales goals with your teammates that leaves you with a solid goal. One that is endorsed and supported by your team member, and provides you with behaviors to measure (remembering that we can’t manage numbers in sales…only behaviors that lead to those numbers.)
1. Vision: Re-visit “What’s in it for them?” Why are they in sales? What do they want for themselves and their families? What income do they need to support this, translated to sales levels needed to provide this. This creates the critically important emotional drive needed to see them through and drive them towards the goal. (Write this number down.)
2. Last Year: Produce their list of clients and the sales or income these represented this year. Notice the large ones, the small ones, the forgotten ones in the middle that are so easy to do business with. (Write this number down.)
3. Evaluate: Here we need to do two calculations.
A.) What accounts will be going away, either through competition, acquisition, the economy, or other reasons that would result in them not providing you the income they did the prior year.
B.) What is available to expand from the remaining clients, either from new products sold or the clients account grew and will lead to more sales (Add this to #2 above.)
4. New Business: Evaluate your market. What accounts you did not get but might this year. Look at new markets, new approaches and activities. From all of this, add up the opportunities and add the sum total of the new revenue to #2 above.
5. Compare: Now, compare this total to several areas:
A.) The visionary income needs of the sales person. Is this going surpass it?
B.) Incremental sales contribution to the top line needed by the company. Does this match or exceed what the budget needs are? Is it enough? Is it a fair request?
Once this is done, determine what adjustments need to be made, like support needs or pricing? Get agreement on the final number be PRODUCED.
6. “Doable Doses”: Break down all aspects of the successful sales goal called KPI’s (Key Performance Indicators), like average transaction size, hit ratio, number of appointments and calls needed to produce that revenue, and you are done!
You now have the annual goal, how it’s made up, and the behaviors you need to manage the sales person who is now a voluntary participant in the process.
If you use this process, or something close to it that conforms to your business process, you are ready to start the new year with a plan of action you can track and manage to the success of the whole team.
Phil Beakes, CEO
Peregrine Insight Group, LLC