Setting Goals And Managing The sales Force’s Performance

The primary purpose of having sales goals, quotas is to synchronize the direction and
efforts of the sales force with the plans developed help ensure that the firm’s sales resources are
being spent wisely. Sales goals serve a variety of purpose for the sales organization. Sales goal
help to motivate the sales force, focus the selling efforts of the sales force, assess the financial
return on the firm’s investment in its products and services. Compare the results achieved by
salespeople in different sales territories and regions.

There can be different types of goal and also different factors to set goals. Input factors
are the efforts a salesperson is expected to make to develop relationships with customers, meet
with them and make presentations and proposals to them. It measured in terms of number of
telephone calls, new client meetings, presentation and demonstrations, proposals written in the
last 30 days. Output factors are the amount and profitability of sales. Weight is assigned to each
goal depending on their relative importance. Many activities ae being performed and certain
amount of profitable sales are being made. It is also necessary to not overwhelming sales reps
with too many goals. It becomes difficult for manager to track records of it. Expense goals are
used restrict expense per revenue generated. Goal need to be completed within prescribed time
period. It can be yearly, quarterly, monthly or even weekly or hourly.

Generally, sales force people have some fixed salary and compensation based on the
percentage of their goals they achieve. To achieve their target, sales reps are often encouraged to
provide their sales managers needed. It should not confuse or demotivate especially when targets
are being increased. Sales organizations that have short or rapid sales cycle might use weekly or
hourly units.

Typical approach to reward a salesperson is percentage of goal achieved. For example,

Threshold goal (90% of the goals), the 100 percent mark (actual goal) and 110% mark (stretch
goal). Threshold, actual and stretch goals give salespeople different levels to aim for. It is good
to involve salespeople for setting their own goals. One drawback of asking salespeople for their
input is their incentive to say low figures. Firms can use top-down and bottom-up goal setting
approach.
 Achievement of sales goal by salesperson depends on factors like the skills, motivation
by manager, training. There are several other important factors that also need to be considered
like flawed sales projections based on limited marketing research, changes in a firm’s marketing
mix variables that result in inferior products or services, Promotional campaigns that don’t
produce the results projected etc. It also quite common for organizations to revise their goals
during a given year. In some cases a company’s sales might exceed its expectations. As a result,
the firm will increase its sales goals and the goals its reps must achieve. A number of factors
might contribute to this. For example, change in market dynamics, change in economic
conditions might have helped bolster buying. But company shouldn’t adjust its sales too many
times or confusion among its sales force can result.

When salesperson cannot achieve their goals, sales manager need to understand that there
can be a number of reason why salespeople don’t achieve their goals. It doesn’t mean that it’s
end of career. If sales reps couldn’t achieve target, then it is responsibility of sales manager to
find out the possible reasons for that. Solutions could be training to sales reps, help them to
understand qualified prospects. Such steps help to diagnose and remedy a salesperson’s selling
weakness.

Sales goal should motivate a firm’s sales force. Goal should be difficult but realistic or
achievable. When they are too difficult, salesperson are more likely to behave unethically to
achieve them. In contrast, if it is conveyed to them why this goal has been set for you,
salesperson show more commitment, more efforts and dedication to that. Difficult goals lead to
higher levels of performance. Sales reps will put forth more effort when their goals are somewhat
difficult vs too easy or too difficult. Specific, difficult goals lead to higher levels of effort than
general ones. Specific, difficult goals-for example, calling on eight clients a day-will lead to
higher levels of performance on the part of salespeople. Feedback by manager about their
performance towards their goal can help to increase or redirect their efforts.