One of the worst things you can do in business is start the journey without a clear destination. Case in point: one of my acquaintance’s father is in the insurance industry and was put in charge of a failing district. The previous district manager was more of the “running and gunning” type. He pushed his agents nonstop and told them that the district’s only goal was to become number one in the nation.
Ask a NASCAR driver how easy it is to go from last to first during a race, and you might get a laugh and a head shake. Ask an insurance agency owner how easy it is to go from last to first in the country, and you’ll probably receive a dumbfounded stare.
Success breeds success, and without any opportunity to feel a sense of accomplishment, the district’s agents became numb to the constant pressure of hitting an almost unattainable sales performance mark. When my acquaintance’s father came into the position, his first objective wasn’t to give some corny, Michael Scott-like speech to inspire the troops. Nor did he crack the whip and double down on his predecessor’s strategy. Instead, after assessing the marketplace and his team, he carefully set a series of clear and reasonable sales goals that were broken down by month, quarter, and year.
It didn’t take long for the district to turn around. In six months, they were ranked in the top half of districts in the state. After one year, they hit number one in the region. After three years, they cracked the top 10 percent in the nation.
While there are a lot of factors that contribute to a business’ sales performance, one of the most basic yet overlooked steps is setting a series of realistic goals. When a year-long “main” goal is broken up into smaller, easier-to-hit targets, sales teams are more likely to find success.
The following steps can make a big difference in helping your sales team meet their 2019 sales goals and beyond.
Have a Clear Plan
According to a recent article by Andris A. Zoltners, PK Sinha, and Sally E. Lorimer’s in the Harvard Business Review, “When 10 to 20 percent of salespeople miss goals, the problem might be the salespeople. But when most salespeople miss, the problem is their goals.”
Don’t jump the gun and put your initial focus on incentives, commission, or bonuses. Instead, carefully review your business plan and answer a simple yes or no question:
“Are my revenue goals realistic?”
Your answer should come down to a variety of factors including market research, how well your sales team performs, the number of prospects in your pipeline, and the amount of leads you’re generating.
Simplify Commissions
Even the most junior salesperson should be able to calculate his cut before he makes the final push and attempts to close. However, if your commission plan is so complex that your team members can’t easily figure out the financial benefits of a win, their motivation to make the sale can quickly diminish.
Businesses with commission structures that consider all possible permutations of profit on a sale end up with salespeople waiting for an accountant to complete the cost analysis to find the magic number. That can also lead to delays in receiving commissions.
Simplification will almost certainly lead to improved sales efficiency, motivation, and more closings. The work is much easier (and more fun!) for everyone when a salesperson can easily figure his cut of the profit.
Maintain a Rolling Hiring System
Good people are hard to find and even harder to keep. Even worse, I’ve had clients tell me about their reluctance to discipline troublesome employees because they prefer a bad salesperson who brings in some money as opposed to an unfilled vacancy that generates nothing.
Implementing and maintaining a rolling hiring system helps ensure you don’t miss a chance to hire talented professionals if your team underperforms. Even if you’re fully staffed, being aware of what’s out there will allow you to hire opportunistically if an exceptional salesperson becomes available.
Rolling hiring systems also offer a clearer picture of your current talent pool. This can prevent business owners from feeling compelled to hold on to salespeople who aren’t measuring up.
Set Quotas Based on Real Data and Economic Conditions
Team quotas can create a culture of friendly competition where it’s in everyone’s best interests to generate as many sales as possible. However, these goals must be set using actionable intelligence and previous data.
The truth about any business is that salespeople have to be committed day in and day out to hit sales targets. Making up sales goals out of thin air is a quick way to destroy morale.
Even young businesses typically have enough data or market research to get a feel for how their team should perform. Study your data and keep your finger on the pulse of the local, state, and national economy to better inform decisions and set reasonable goals.
Implement Ongoing Training
If your team struggles to hit its benchmarks, then it may be time to reevaluate your sales training practices.
Before setting a new series of sales quotas or long-term sales goals, be sure your team has the tools and knowledge to achieve them. Good managers build great sales teams not only by recruiting the right people but also by continuing to develop team members.
Assessment tools like mystery shopping offer actionable intelligence that can help you identify your team’s shortcomings and strengths. You can measure the quality of sales team-customer relationships and see your sales staff the way your customers do. With the right information, you’re able to streamline and focus your training where it’s needed most.
A successful business must have the agility to adjust to a variety of factors as the operation changes and grows. Don’t be afraid to readjust your sales goals or try something new if the numbers aren’t where they need to be.
