Managing Sales Performance by Setting Goals
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Transcript Managing Sales Performance by Setting Goals
Mr. Vivek
Bindra
Director - Global ACT
www.vivekbindra.com
www.globalact.org.in
•Meet/exceed
sales quota!
•Develop your
team!
Monitoring Salespeople
Market Conditions
Competitor Reactions
Following Up
Instituting Corrective Actions
Sales goal (quota): performance standard by
which salespeople are measured
Sales goals are useful for several reasons
• Synchronize direction and efforts of sales force
with plans developed
by top managers
• Benchmark performance
• Achievement of goals
can be motivating and
is usually tied to
compensation
Most
people agree on the big picture, but
their implementation of sales management
practices reflects nuances unique to their
home cultures
Some researchers believe that globalization is
causing sales management practices to
converge
There are still variations
• Short-term goals in US
• Long-term goals in Japan
• “God willing” in Middle East
Input-Based Goals
Relate to the observable selling
efforts a salesperson must make
Number of sales calls
Number of presentations
Number of proposals
Number of new clients
contacted
Ensure the reps are performing
core selling activities
Output-Based Goals
Selling results a rep is expected to
achieve
Number of orders received
Revenue generated
Sales volumes
Profits
“All-or-Nothing” approach
vs.
Reward for reaching part of a goal
• 90% threshold goal
• 100% actual goal
• 110% stretch goal
Many
firms solicit input from sales
force about the goals finally set for
them
Helps improve rep morale because
managers better understand obstacles
Disadvantage: reps have incentive to
“lowball” goals
Flawed sales projections based
on limited marketing research
Changes in marketing mix
variables resulting in inferior
products or services
Increase in cost of supplies
passed on to buyers via higher
product prices
Promotional campaigns don’t
produce projected results
Delays or other problems with
distribution of products
New competitors and
competing products entering
marketplace
Environmental factors affect
customer demand and cause
customers to postpone or
cancel their purchases
Change in laws and regulations
preventing or restricting use of
products and services or
making them more expensive
Changes in the way firms do
business, for example, as a
result of new technology
SMART
format for establishing goals:
S pecific
Measurable
A chievable, yet challenging
R ealistic
T ime-based
1
Set goals that are easy for sales representatives to understand,
a reasonable challenge to achieve and have clear deadlines for
completion
2
Important tasks not included as a goal may get ignored; if it’s
important, then set a goal for its accomplishment
3 Having too many goals can create stress, keep the number of goals
to a reasonable number; clarify importance for prioritization
4 Get your sales reps to commit (“buy in”) to their goals by explaining
how they have been set and involve
5 Clearly indicate how the sales performance will be measured and
rewarded
6 Provide feedback as frequently as possible; encourage reps to use
alternative approaches to sell if initial approaches don’t work
7 Make sure people know you have confidence in their ability to
achieve their goals
8 Failing to achieve a goal should not be viewed as a “total failure,”
since it should be considered progress on the road to success
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