Setting Goals for New Salespeople
Salespeople need to be able to ramp and grow in their role. It is an important function of the management role to be able to motivate a salesperson without allowing them to derail progress with goals that are not aggressive enough, or even worse, too aggressive. A salesperson that does not put adequate pressure to perform on themselves will undoubtedly end up in a “coasting speed.” Having at least 50% of the team constantly stepping up goals and increasing performance is key. This will allow the other half of the team to see that higher performance is possible and that it is something that can happen through daily progress and not one off “large” deals.
Roger Bannister is a former English middle-distance athlete, physician, and academic who ran the first sub-four-minute mile on May 6th, 1954. Before he accomplished this, medical professionals had deemed it “impossible” to run a mile in under 4 minutes. It was believed the human body did not have the mechanics necessary for such a feat. The same year he ran the sub-four-minute mile 24 other athletes did as well. Since then, more than 400 runners have beat this number in competition settings. There were 23 just in just 2014. The current record holder ran the mile in a time of 3:43.13.
The phrase, “Bannister Sale”, means the sale that allows the team to know something like a sub-four-minute mile is possible. This methodology is also how you control goals. If someone wants to run a 4 minute mile they first have to run a 4:30 mile. To do that they must first run a 5 minute mile and so on. A 4 minute mile is such a feat that it would be difficult to do much better. As illustrated above, this has happened only 400 times since 1954 in a competition setting. Your job as a manager is to identify the complexity of running at this speed, and know when a Salesperson has reached an almost peaked performance number. You can’t expect a Salesperson to consistently perform at 10% more than the previous weeks performance. At some point this will cap out and you will see the Salespersons performance flat line, having some up weeks and some down weeks. Just as you can’t expect this from a Salesperson, you need to control this mindset with them as well.
Goals in a sales capacity need to be set in an achievable way. If the individual is going to come in on week one and set a goal to beat the company’s highest sales record, you need to let them know this is not where you want to start. It is important to let them know that you believe in their ability, but don’t want them to be disappointed if the job takes on challenges in the first few days that makes the goal impossible to hit. For this reason we will use the “try-bad-good” philosophy. In order to be good, you need to be bad, and in order to be bad, you need to try.
What this looks like in a goals setting is as follows:
Week Activities>Pitches> Quotes sent>Proposals built> Closes attempted>Closes achieved> Money desired>Money achieved
Goal setting should take this form for the first month with the numbers 1-4 being the progression of successful goals being achieved. It is important that goals in the first few weeks take the form of habit building. Start with a desired number of activities, calls, conversations, no’s, etc. Move from that to the number of pitches someones does and so on and so forth as listed above. This will ensure that alongside the number of sales made you are instilling good habits that will produce longer term successes.
Once you have a producing salesperson, you should take the time to taper the goals to make them “slightly” larger and larger each period. You should never exceed an increase of 10% when raising a goal. I like to give agents the choice: “Do you want to do 0%, 5% or 10% more this period than last?” This helps to put the salesperson in charge of their own destiny. If they don’t hit the goal at the new rate, I like to allow them to do -5%, 0%, or 5% more in the following period. You want consistent performers, not ones that are up and down each period.
The biggest complaint I hear from a Sales Manager is this ramping period. They want a salesperson in and producing at a huge number immediately. Then they increase the goal by 25-33% each period, and expect this person to just magically hit this. If you expect this increase, let’s look at the reality of what you’re asking. If you had a salesperson come in with a $10,000 goal, and asked them to do 25% more each month, at the end of 12 months you would be asking them to perform at $116,000. This is unrealistic. It’s more likely you will push them to 15-20K, then stop being as aggressive with goals and start asking less. This is defeating. If you did the same 10% with that person holding a $10,000 goal, at the end of 12 months you would be asking for a $28K a month performer, not unreasonable. Best part, is they would have grown at a rate you can control and are comfortable with.
Expecting sales to start because you have hired someone is naive at best. Sales is not a light switch, where a butt in a chair on the phone means money. A butt in a chair means activity.
Activity means sales. If you measured your salespeople today as pipeline development representatives, would the activity they are doing be something that would lead to sales? If it is not…start to push activities.
Sales Management isn’t easy…and if it is, you’re probably not doing enough.
What is your sales team’s biggest issue with setting or hitting goals?