One of the things I love most about working with sales organizations is the straight-forward nature of measuring success. When sales managers lead their teams to successfully achieve their sales goals they are heroes. Of course, the opposite is true as well.
In the pursuit of financial results sales managers often overlook the importance of holding sales people accountable for performance goals. The bottom line is that if sales managers improve accountability, they will improve sales performance in the process. So what are performance goals and why are they important?
Sales Goals are the End and Performance Goals are the Means
The question is, ‘What are worthy performance goals for sales people?’ The answer is the work products, tangible things, sales people produce that have the highest impact on achieving their sales goals. In an ideal sales organization, the top sales officer sets the company sales strategy, communicates the sales goal, and assigns team goals accordingly. With strategy and goals in place sales managers can develop execution plans and sales people can prioritize activities, take action, and produce results.
Sales goals are important to the entire organization. They impact strategic planning, research and development, and growth and hiring. Sales managers who achieve their goals receive praise and recognition. Sales people who hit their goals are candidates for ‘President’s Club’ status.
Financial results expressed as annual sales goals they might look like the following:
- Total revenue dollars
- Percentage increase over prior year
- Profit margin increase
- Number of units sold
Sales goals are straight-forward and quantifiable. They are measured in numbers, percentages, or dollars. Sales people either achieve their quotas, revenue targets, or profit margins or they don’t. Whereas performance goals are not so straight-forward.
As a Performance Manager, I saw many annual performance plans and objectives. Most resembled glorified ‘to-do’ lists. I propose a different way to look at performance. STOP writing annual objectives that get filed away until year’s end and instead START focusing on the meaningful everyday work effort and work products that sales people produce in pursuit of their sales goals. That means sales leaders should observe their sales people’s performance, skills, and knowledge demonstrated where in counts: in the field in front of customers. It also means holding sales people accountable for non-financial goals.
Set Standards and Hold Sales People Accountable for Quality Work Products
For example, a sales person produces a plethora of work products while pursuing an opportunity. Some have a greater impact on success than others such as:
- Direct communications with prospects and customers – How many deals have been lost due to a poorly worded letter, voice mail, or email?
- Product demonstration – Meeting the needs of the customer will beat ‘bells and whistles’ approach every time.
- Sales presentation – There are different types of presentations given while pursing the deal, but they all require practice and preparation. They are only as effective as the presenter.
- Sales meeting agendas – Articulating the meeting agenda both orally and in writing can help keep the opportunity moving forward. If your sales person has the same meeting three times rather than three progressive meetings, this needs attention.
- Sales call plans – Taking the time to research the prospect’s business is time well-spent and demonstrates commitment to the sales person herself, the customer or prospect, the team, the sales manager, and the company.
Practice Makes Perfect
Sales leaders and managers, take the time to list the work products you require from your sales people and rank each according to its impact on the sales goal. Focus on the top three to five and provide the following for your sales team members:
- Performance standards: Performance goals are often qualitative. Therefore, it is imperative to show your team both positive and negative examples of work products. “It should look like this, not that.”
- Training and education: Ensure that everyone is up to speed on how to perform to meet your standards for communications, presentations, demonstrations, and reports.
- Coaching and Feedback: Constant and consistent feedback reassures team members that they are on the right track and performing well. It gives you, the sales manager the opportunity to course correct in a timely fashion so that there are no surprises at year’s end.
- Practice Practice Practice: Providing your sales team with training, education, and information is not enough. You must provide opportunities for practice so that sales people move from knowing a skill to owning a skill.
Information is not knowledge. The only source of knowledge is experience. You need experience to gain wisdom.Albert Einstein