Most sales teams, up to 90%, are not performing at their possible best. The reason for unsatisfactory sales performance is often a combination of missing items in the puzzle. While some individuals are running at 120% of capacity, some people don’t even understand the products or tools available, and in many cases they come short in understanding the basics of selling their very own products. While nearly all sales people would confirm they are driven to achieve or exceed their budget, reality shows many fail on a regular basis. Success is a combination of understanding the targets, proper use of tools and comprehensive training. Many employees have little appreciation for tools and last but not least have not really been given any complementary training.
Let’s have a look at the Targets first
A) Unrealistic targets
Often managers, supervisors or business owners simply don’t understand how to set realistic targets for their sales teams in terms of numbers, territories, products and customers. Targets need to be in line with the business needs. In many cases application support, product management, customer service and the service department are not an integral part of the sales process. Coherence is missing. With this lack of structure, the setting of targets is simply driven by ambitions which are neither realistic, nor achievable. If there is no teamwork the team can’t grow and benefit from each other.
B) Soft targets vs hard targets (KPI’s)
Which targets or KPI’s are critical and the right ones? It’s not so much a question of what kind of targets (soft or hard) you choose for your teams, it’s more a question of “are they the right targets?” and “can they be achieved?” More importantly “can they be measured?” If so, even stretched targets (beyond budgets) will be the focus of an employee. If targets are unclear, blurred by conditions and/or connected to activities which are not in the job description or in the area of responsibility of an employee, there is a 95% chance that the target by the end of the period set, will be missed.
C) Target setting
Target setting is a delicate matter for anyone involved in this task. However the most important part of target setting is that the payouts that can be earned reward the achiever! These payouts are the drivers. Mediocre results and achievements must be analyzed and commented, what went wrong and how the shortcomings can be avoided in the future. Excellent results must be celebrated.
You must understand, any targets you set, must be clearly discussed with the employee to leave no doubt about the details set and therefore puts the expectations of all stakeholders at the right level. But before you discuss these figures, have you as the target setting individual, fully understood how the numbers are coming together?
- Do you know the workflow, the processes and the strategy in your organization well enough to understand the impact of the targets set?
- Is this target setting in sync with the strategy and the long term (3 to 5 years) business plan?
- Are you sure you can afford these incentives?
- How many targets are you setting for each employee?
- Are they well balanced? Capped? Min/Max settings? Contradictory?
- Is the scheme a driver to exceed the budgets? Or is it just to make budget?
These are some of the questions you need to ask yourself.
Last but not least don’t forget to ask yourself, are these schemes beneficial to the business and to the morale of the collective staff?
In our next edition of REVIVE we will look at the tools and the training topics.
EBIT Management Service Pty Ltd as part of Condon Associates Group, helps companies to transform their sales and service departments into revenue engines before it’s too late. We have a team of highly qualified and experienced sales, marketing and finance experts, who can help to provide you with solutions to turn around your business.