Setting realistic goals for sales reps
May 9, 2016
By John Foust
Derek placed more ads in the paper than anyone else on the sales team. Low-volume clients suddenly increased their expenditures. And large clients started running even bigger ads. Revenue was rolling in.
Then it all fell apart. First one advertiser, then another, complained about invoicing. Quickly it became evident that Derek had been placing ads in the paper without permission. His scheme worked for a while, because some of his clients didn’t check records carefully. At first, the paper rationalized that refunds were a cost of having a high-energy salesperson with a poor eye for details. Then they realized that the problem was deeper than that, and eventually had to let him go. Justice prevailed, but that wasn’t the end of the story.
The accounting department worked overtime to clean up the mess. And the ad department hired a replacement. But in an inexplicable act of greed and stupidity, the ad manager gave the new person a goal that was 10 percent higher than the pre-refund amount generated by Derek. In other words, the new person would have to produce more revenue than a crook.
Although this is an extreme example, it illustrates the fact that some managers need a better understanding of what it takes to set realistic goals. If you are involved in the goal-setting process, here are some points to keep in mind:
1. Fairness is in the eye of the beholder. If a salesperson feels a goal is unfair, it is either 1. truly unfair or 2. you need to do a better job of explaining how you arrived at the goal.
2. Goals impact morale. When a person makes progress toward a goal, morale soars and she can be self-motivated to work even harder. On the other hand, when a person finds himself falling short week after week, he can get discouraged and say, “What’s the use?”
3. Morale is contagious. Although salespeople spend a big part of each day working independently, they are part of a team. When there are problems, they are often likely to talk to each other rather than to the boss.
4. Consider multiple factors when setting goals. Across-the-board increases are common, but inherently out of touch with reality. Let’s use the 10 percent figure at Derek’s paper to illustrate. If you’re looking for an overall 10 percent increase, see that figure as an average. Some accounts could project a 5 percent increase and others could project 15. It’s like the old management saying, “If you’re treating everyone the same way, you’re treating most of them the wrong way.”
5. Use the SMART. formula. This technique has been around for a long time—and it has helped a lot of ad managers set meaningful goals. It represents goals that are 1. Specific. 2. Measurable. 3. Achievable. 4. Relevant. 5. Time-sensitive. Wise managers get each salesperson’s input in each area for each account.
Derek’s replacement lasted less than a year. With realistic goals, the story could have had a different ending. © John Foust 2016. All rights reserved.
John Foust has conducted training programs for thousands of newspaper advertising professionals. Many ad departments are using his training videos to save time and get quick results from in-house training. E-mail for information at firstname.lastname@example.org.