If you are not satisfied with the goals and goal achievement of your sales reps, the reason may be the goal setting process you used. You should also consider your own goals. Whether you are a seasoned sales manager or a new sales manager, reexamining your goal setting process and making improvements where required can lead to improved sales practices and results.
Participation and Joint Agreement
Achieving goals requires commitment from those that must meet them. Do not make the mistake of delivering goals to sales people without involving them in the process. First have goals in mind and the justification for them. Then ask sales people to provide their own goals with details to support them. It can be helpful to meet with sales people individually and negotiate goals that each sales person will accept.
Historical and Future Analysis
As part of the goal-setting process for sales management, you should examine last year’s goals and their results. Whether goals were exceeded or not, you need to understand why. This includes examining goal results at the salesperson, product and territory level. You should also review last year’s assumptions and what changes occurred during last year that impacted goal achievement. For example, the entry of a new competitor could have reduced sales.
Before setting any new goals, you need to define your assumptions for the upcoming year or other time period. For example, you could assume a specified salesperson turnover rate and its impact on sales.
Goals should be set at the sales rep level since salesperson performance will be judged individually. Decide what you want to set goals for. In addition to setting sales volume goals, you should set such related goals as activity, closing ratios, product and territory goals and sales pipeline goals. Examples of activity goals include number of opportunities pursued, number of proposals generated and number of resulting sales. Closing ratio is the number of sales divided by the number of presentations made. Sales pipeline goals include the average number of proposals in process within specified time periods such as monthly.
If your salespeople have some latitude in what price they offer for your products or services, you should track profit margins.
Personal Goal Setting
As a sales manager, you need your own goal setting process and to set your own goals. For example, you should decide how much time you will spend meeting with and coaching sales people individually. Also, decide how much time you will spend in the field accompanying sales reps and meeting with customers. These trips provide a firsthand opportunity to learn what’s going on in the market. To stay current with trends in your industry, it also is important to attend industry association meetings and trade shows and read industry publications.
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