Five Key Steps for Setting Sales Targets and Managing Performance
Setting accurate sales targets and working towards successful sales performance management can be the difference between success and failure for a business – it really is that important!
Consider the extremes – setting too low a target is unlikely to see your sales reps operate to the best of their ability, while an excessively high target can leave employees feeling unfulfilled and returning those pesky recruiter calls.
It’s the same for maintaining high performance. Happy workers are productive ones, so establishing a healthy work-life balance should not only boost the business but also ensure your best talent is retained.
Given the high stakes, it’s no wonder managers and business owners often dedicate hours of thought and attention (not to mention money) into devising ways in which this balance can be best struck. Here are five key steps we’ve identified to ensure the ratios prove to be just right.
Step 1: Communicate early and often
One of the biggest failings among 21st Century businesses is the failure to effectively communicate changes or developments effectively with employees.
All companies want to do what is right for both their staff and also the business as a whole – with the two having a hugely symbiotic relationship. Despite this, it is alarming just how often workers think that changes have been made with the intention of making their lives difficult or getting them to work harder, not always smarter.
That’s why clear and effective communication is critical when setting targets and managing performance. So what does that entail? Communicating how the company can support employees working to the best of their abilities, what the corporate goals are, in context, and ensuring a framework is put in place to convey what your expectations are performance-wise.
Communicated badly, however, this can come across as a cracking of the whip, with employees left feeling they are being told to work harder for no apparent reason.
Step 2: Get the terms in order
What’s the difference between a target and an aim? They are certainly not synonymous, that’s for sure.
Targets are goals businesses can work toward, with a view to making it happen sooner rather than later. Staff members are given targets, with a timeframe in which they are requested to achieve results.
Aims, on the other hand, are objectives the business is hoping to achieve, which may not be quite so based on fact or informed estimates. For example, a business might be looking to reach an annual profit of one million dollars, but how attainable this success is and the realistic time frame in which this can be achieved is likely to often make it more of an aim.
As such, businesses should be sure they have the right mutually understood terminology in place so that everyone is on the same page. This uniformity of thought should then help to make the process a much easier one, avoiding confusion or misdirection of efforts.
Step 3: Let Data Drive Goals
Similar to the above point regarding definition, target and performance management has to be the result of quality research and solid understanding of your current data.
Going blindly into the goal-setting process is generally a waste of time and resources, as business leaders lean significantly more on aims than targets. Carrying out proper research beforehand, however, will not only provide an accurate indication of where the business is at present, but it will also point future developments in the right direction.
A comprehensive research process should be undertaken before any decisions are made. This should include not only the business objectives, but also current staffing levels, saturation point, healthy workloads and contingency plans. It can be achieved by looking at historical data, comprehensive forecasts based on recent figures. The end result, though, should be one of establishing where improvements can be made and what can be done to achieve this.
To tie the whole process up, this can also make the communication of such changes to employees much easier and more effective. Showing results in black and white, then explaining how they’ve been used to determine targets for both employees and the business as a whole, should qualify the process and make the resulting targets and performance management expectations more positively received.
Step 4: Enable the right of reply
After spending hours determining targets, managers will understandably be loathed to change them in response to complaints from others. This is completely understandable, but wholly wrong.
Even if changes have been qualified and explained to workers – or stakeholders – those affected by them should still be given the chance to air grievances or suggest amendments based on what is presented.
It may not be what decision makers want to hear, but giving employees the ability to give candid feedback can help make operations run smoother still, while keeping staff happy whilst their targets are amended. This can also provide business leaders with the knowledge of specific courses, qualifications or training materials that would be best for their workers, which – if successful – could be rolled out to the wider team.
Step 5: Look inward, not just out
Whether business leaders want to assess their own performance, or use shareholders instead, they should be sure to look in, as well as out. Sales management can and should be the subject of target and performance reviews. This accountability is important for parity across the whole company, not to mention a perfect way to show workers they aren’t the only ones being subject to reviews.
While the targets will unquestionably be different – such as focusing on staff development instead of sales volumes, for example – they can be just as important to the successful running of a business.
With this all considered, it may seem as though setting targets and managing performance is a difficult, lengthy process that is littered with potential stumbling blocks. To an extent, it is. However, taking these five steps (and being prepared for what benefits they offer) should help make the whole process decidedly smoother than it otherwise could be.
Topic: Sales Performance Management