Based on research involving more than 700 sales organizations, here are four essential keys to effective goal setting, as revealed by The Corporate Executive Board:
- Connect incentives to goals. Most managers understand the value of providing incentives that motivate salespeople to constantly raise the bar on their own performance. But the key is finding ways to tie those incentives into your company’s mission and goals. Example: The Ritz Carlton — which is usually rated in the top five in PeopleMetrics’ Buyer Loyalty Survey — awards additional bonuses and incentives to employees who constantly go out of their way to let guests know how much their business is appreciated. Do you provide rewards for salespeople who endorse the company’s values? Do reps have incentive to promote the company’s values and mission?
- Follow up and follow through. Great coaches use goal setting as a way to encourage consistent performance and keep salespeople focused on improvement. But what’s just as important (if not more) is having a system in place for following up on goals and adjusting based on each rep’s progress. A system that works: Meet with salespeople once a quarter to review previous goals and create a new strategy for success. During those meetings have salespeople choose three specific goals they’d like to achieve, create a step-by-step plan for accomplishing each, set clear benchmarks and offer rewards for achieving each one, and schedule specific follow-up sessions where you’ll review the goals and adjust accordingly. Using this approach keeps reps engaged because they know you’ll be following up with them. But it also makes you a partner in their success, which boosts morale and motivates salespeople to go out and get the job done.
- Set quantifiable goals. Things that get measured are things that get done. Even though certain goals are qualitative, there should always be an agreed-upon means for measuring a salesperson’s progress. Metrics help managers pinpoint where a salesperson may be falling short, which is the first step in overcoming the problem. Example: If a rep’s closing rate has dipped, a manager could spend weeks working on closing techniques. All the while, a quick look at key metrics might’ve revealed the real problem was a low cold call-to-appointment ratio.
- Update your approach on pay. The business world is constantly changing, as are the incentives that motivate salespeople to go out and close more business. Consider these tips for providing stronger incentives for salespeople to close more than ever: Update your compensation strategy so it reflects the way your business has changed (e.g., does it reward reps for closing repeat business? Does it encourage reps to push the products with the highest profit margins?), and ask salespeople what other incentives would motivate them to close more business. Incentives are only as good as their ability to boost revenue and energize salespeople.
