It’s that time of year again: goal setting. We do it every fourth quarter, and every first quarter we launch into the new year with high hopes. On what basis do we place these high hopes? Certainly not on past attainment, if industry-wide statistics are to be believed.
If you’re among the majority of sales leaders, around 40% of your salespeople will fail to reach their yearly target. This is appalling. Imagine if you were to miss your organization-wide production goals, or quality control targets by that much.
Unfortunately, the problem isn’t fixing itself. Goal attainment has been declining across the industry for almost ten years. Here are four reasons why your organization isn’t going to buck the trend any time soon.
Everyone sets sales quotas based on dollar amounts. Those goals are important as far as they go, but they’re a lagging indicator and provide no insight into why goals are or are not being met. Additionally, they’re lagging indicators that provide no lead time for making changes in enough time to ultimately meet goals.
A better way to set sales goals is to focus both on outcomes and on the inputs that lead to those outcomes. Instead of a single dollar amount each salesperson must meet, identify the sales activities and milestones that contribute most to positive sales outcomes. Set goals for each salesperson based on those activities and milestones.
This is related to issue #1. Most CRMs track pipeline numbers, calls made, and emails sent. It’s all about efficiency. But what good is activity without progress? What they don’t track is whether your salespeople are following your process, whether they’re effective in qualifying and disqualifying clients, and whether they’re engaging in the best-practice conversations and activities that effectively progress each deal and drive sales performance.
What you don’t track, you can’t control or improve. World class sales organizations build systems that track not only activities, but also guides progress through the sales process.
Sure, you probably know better than to give everyone in your company the exact same sales goal. But if you’re making the same salesperson responsible for the next $10 order and an ongoing $10 million opportunity, that’s a problem. Both types of sales can be important, but the skills involved in handling them are different. Plus, you definitely don’t want your $10 million opportunity to be ignored while the $10 transaction is processed.
Justin Roff-Marsh tackles this problem in his book, The Machine: A Radical Approach to the Sales Function. He discusses evidence that multitasking is harmful to productivity, and points out how we force salespeople to multitask on a daily basis. He recommends an engineered sales process that divides sales responsibilities into four buckets: Promotion, clerical, technical, and sales, and then assigns each bucket to separate teams.
We’ve seen excellent results among our clients with a similar approach, when the sales leadership at Westermo hired an inside salesperson to handle clerical tasks and incoming calls on behalf of their outside sales team. The division of labor enabled everyone to focus on the work that they were best at, improving sales performance.
When asked what one thing they wish they had more time for, most sales managers say, “Coaching.” When asked to name a practice that has a major impact on sales effectiveness but is widely neglected, six out of seven methodology experts said the same thing: “Coaching.”
Unfortunately, most coaching is either ad hoc or non-existent. Sales managers rarely receive good training in coaching skills, nor do they have access to the type of information they need in order to provide effective coaching. What’s needed is a system that encodes best practice behaviors, and then provides managers with insight into where each salesperson is experiencing problems. Then they need to be given the time and training to coach to those points.
The good news is that all four of these traps can be avoided with proper planning. The bad news is that it’s not an overnight fix. The really good news is that now is a perfect time to invest in your sales process so you really can buck the trend this year. Ask us how we can help.
George is the founder & CEO of Membrain, the Sales Enablement CRM that makes it easy to execute your sales strategy. A life-long entrepreneur with 20 years of experience in the software space and a passion for sales and marketing. With the life motto "Don't settle for mainstream", he is always looking for new ways to achieve improved business results using innovative software, skills, and processes. George is also the author of the book Stop Killing Deals and the host of the Stop Killing Deals webinar and podcast series.
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