Is Goal Setting Important In Sales Organisations?

Do sales people need to set goals over and above sales targets? I mean, after all, sales targets are there for a reason, right? They should motivate your sales team to perform and achieve the financial incentives you have set for them.

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?

I often ask sales people why they have 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 organisation. Businesses need to be able to plan and forecast revenue and growth, and so they set targets in line with those expectations. They then seek out sales people who they think can reach those levels of performance.

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

The rest of the time, sales people will fall into one of two camps.

There Are 2 Types Of Sales People

The first group, and sadly the more common, is those salespeople who see the goal as the top of where they should be aiming. These people, as soon as they reach quota, take the rest of the month off, or start coasting, or 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.

Sales managers will probably be asking these salespeople questions like:

• “Are you going to hit target this month?”
• “Why is your call activity so low?”
• “Have you followed up on your leads from last month?”

The other group of sales people are those who are motivated by something else.

These salespeople have their own goals and objectives, and usually see sales as a way of getting there faster. These goals are usually far bigger than the other group of salespeople, and as a result, drive them to be far more productive. The end result is this group don’t even focus on their sales targets, and as a result, often get calls from the finance department asking if their commission payment should really be that high.

Sales managers will probably be asking these salespeople questions like:

• “How are you getting on with your home extension?”
• “Where are you going on holiday next week?”
• “Didn’t you just get a new car last year?”

Notice that these questions have nothing to do with the sales process, and everything to do with their personal goals.

What Kind Of Goals Should Salespeople Be Setting?

It is important to be careful when setting goals with your sales teams. If you make it obvious that you just want them to dream bigger so that they sell more, you might find that you do not get the response you were looking for. Your team need to buy into their goals, and fully realise the connection between their sales and work performance and them being able to achieve those goals.

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 your salespeople’s values and motivational drivers will help you understand how else you can motivate them to achieve their goals.

If you salesperson is motivated by training others, have them be the person that new hires shadow. If they want to get into leadership, suggest they run a sales meeting next month talking about how they improved their prospecting success by 150%… but that it has to be a case study on how they actually did it. Your job as a sales manager is to tie these activities into their sales performance.

Of course, some salespeople will just be happy to selfishly get on and hit these new targets. In this case, congratulations, you just moved someone from the first group of sales performers to the second group. Better start practicing those other questions.

Once you have gone through the goal setting process with your sales team, be sure to 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.

But What If They Do So Well That They Leave Or Get Promoted?

This can be a concern for managers, but this is where the organisation needs to think about how it is retaining talent. Also, it is a good reminder of this corporate dilemma:

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

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

With the new month and new quarter just about to start, think about running a goal setting session with your sales team. Get them focused on what level they want to be performing at, rather than what their sales targets suggest for them. Find out what they are motivated by, then show them how their sales performance can enable this. Check in with them regularly on how they are progressing toward their goals, and hold them accountable for this target, rather than just their sales activity.

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