It's the time of year when sales managers roll out 2020 goals for their sales team. New goals are a new opportunity for business growth, but if done improperly, can sabotage your year before it even begins. Here's a primer on setting effective sales goals.
1. Make them reasonable - If you missed your goal last year by 5%, and were planning for 15% percent growth this year, don't make your sales goals 20% higher by adding the 2 numbers together. Why? Because you're setting yourself up for failure before the year even begins. For whatever reason, last year was a "miss". Evaluate that, but don't saddle 2020 with 2019's burden. If 15% is the growth goal in 2020, then make it 15% and focus all of your energies into hitting that.
2. Don't straight line them - There's nothing worse than being 2 months into the new year and already feeling like you are behind your goals and cannot catch up. I've found (anecdotally) that the "give up" point for reps who fall behind goal is around the 25/25 range. That is, reps who fall behind their annual goal by 25% for 25% of the year tend to give up on the annual goal (and accompanying income). Here's a theoretical case study to illustrate the point:
Rep A did $800,000 in business in 2019. Manager A expects 15% growth in Rep A's territory in 2020. 15% growth means Rep A must grow their revenues by $120,000 annually or $10,000 per month. After the first month of the year Rep A hasn't grown in sales, but has maintained last year's sales levels so Rep A is now $10,000 behind goal. The trend continues because Rep A is falling further behind each day and at the end of Q1 Rep A is exactly where they were last year, but now $30,000 behind goal. Rep A has been selling from a position of weakness since day 1 and is now so far in the hole that hitting the annual target becomes very unlikely. At this point Rep A must show a sales gain every month of the original $10,000 growth goal, plus an additional $3,300 to catch up. If Rep A begins selling in April at the new monthly goal of a $10,000 sales gain, but still can't get the "extra" $3,300 then by the end of Q2 the rep is still behind $30,000 but only has 6 months to catch up (meaning their sales gain must now by $16,000 per month for the rest of the year).
As you can see, the "give up" point rapidly accelerates if a sales rep or team falls behind early in the year. So, what do you do?
Ramp those goals up over the course of the year and let your rep enjoy what we call "success momentum". People what are successful tend to stay successful, and those who are not tend to stay that way too. Instead of the straight line sales growth, try something like this....
Jan 2020 - $2500 sales gain
Feb 2020 - $5000 sales gain
March 2020 - $7500 sales gain
April 2020 - $10,000 sales gain
May 2020 - December 2020 - $12,000 sales gain
Guess what...by the end of the year your overall sales again is now $121,000.....more than your original forecast! Via this method you've given your rep a chance to slowly ramp up to their new goals and they have enjoyed the success and self confidence that comes along with hitting those goals. If you have the right team and the right training, you might find your agency well ahead of your overall growth goals by the end of 2020.
3. DO look for the deficits in sales ability and coach those - Some of your people can't close. Some are great closers but cannot prospect. A few of them don't understand creating an effective account strategy. Figure out what each person needs to grow, and coach them on that thing. You'd be surprised at how tweaking one sales skill can results in BIG sales gains.
2020 is on our doorstep. It's time to get serious about sales and serious about success. Use these tips to create goals and salespeople that win!