Written by Ken Eiken, Advisory Council Member of the EcSell Institute
In my post last week, I described 5 tools that are used to coach sales teams:
- Annual Performance Goals
- Regular One on Ones
- Customer Visit "Ride Alongs"
- Role Playing Exercises
- Annual Performance Reviews
Today, I will discuss the first of these tools - Annual Performance Goals.
I doubt I'm going out on a limb when I state that goal setting is not the sales leader's favorite activity. This annual event occurs at the unenviable time of the year when we're focused on closing out current year targets - not building enthusiasm for the future. Thus, the goals we create for our direct reports might not be as well constructed and useful as we would hope.
However, I would argue that strong goals set at the beginning of the year are valuable tools that aid your coaching strategy and make the annual performance review process easier at the end of the year. Well constructed goals give your team members focus AND give you the tools you need to make personnel changes IF required during the year. Thus, annual performance goals are a critical tool for successful coaching.
Before we get into creating the goal itself, I want to emphasize ALIGNMENT of sales goals with corporate objectives. I've been in organizations where individual goals were not tied to corporate goals which created conflict between operations groups and the sales team. BEFORE setting any individual goals, insure that your sales department goals support the corporate objectives. Once the sales department goals are established, it will be relatively easy to create individual goals for the sales team member.
While there are a number of goal templates, I have had great success using the S.M.A.R.T. goal setting tool which are presented here:
A well constructed goal is:
S - SPECIFIC: A well constructed goal is focused on a single, tangible result. A vague goal doesn't allow the sales person to focus their energy on accomplishment of that goal.
M - MEASURABLE: Obviously, we need to be able to measure if the goal has been achieved. For sales people, this is easier (due to quotas, etc) than other career fields.
A - ACHIEVABLE: There is nothing as demotivating as a goal that cannot be attained. We need to set high goals to drive achievement, but they can't be impossible to reach!
R - RELEVANT: Relevant goals achieve the alignment discussed above. Great sales people crave making a difference for the organization - a relevant goal helps them focus.
T - TIME CONSTRAINED: There needs to be a "due date" for the goal. Goals without an expectation of completion never get completed!
Here are some examples of well constructed sales person goals:
- "Achieve $1.234M in regional revenue (an increase of 10% over the previous year) by December 31st, 2010. Quarterly revenue targets are: Q1 - $250k, Q2 - $274k, Q3 - $305k, Q4 - $405k.
- "Sell 100 widgets (corporate goal of 1200 widget sales) to existing and new customers within the Western Region by the end of Q1 2010"
- "Decrease retail call center inbound call abandon rate to 5.7% by the end of Q2 2010. Continue to decrease abandon rate to 4.5% by end of year 2010."
As you can see - each of these examples uses the S.M.A.R.T. template.
An important thing to remember is to not confuse a goal with a required activity. For example, if your expectation is that a sales person updates their CRM system everyday, that should not be a goal. That is an activity that should be covered in the expectations of the job. Is it critical to insure that each sales team members understands the expectations of the job and the difference between those and their annual goals.
Finally, a word on the number of goals per person. My rule of thumb is to have 3 to 5 SMART goals per person. That number gives a balance between workload and focus. Too few goals and you might have an underutilized team member, too many goals and your employee might have too many "irons in the fire".
As I mentioned at the beginning of this post - setting goals is not a sales leaders' favorite thing to do. However, setting strong goals for your team members will make your coaching efforts much more effective. Your organization AND your team members will appreciate it!