In every company, sales is of critical importance to reach performance objectives set by management. Sales serves as the fuel that propel companies to achieve their financial and strategic objectives. As a result, the role of salespeople represent a pivotal one in most organizations.
However, more often that not, sales goals tend to be overly-ambitious. And many times, it’s not the personality, dedication, work ethic, or the level of commitment the salesperson demonstrates that prevents sales goals from being accomplished, but macro-environmental factors that hinder goals from being achieved. For instance, the sales opportunity in one region may differ from the social-economic factors of one territory may present less attractive opportunities than another and so on.
Goals have the purpose of guiding salespeople’s behavior and performance. Their sole purpose is to energize salespeople and stimulate them to keep going – that’s why they commission. Commissioning incentivizes salespeople to keep them on-to-of-their-game through the dopamine effects of eagerly thriving to reach their sales target.
However, while overly ambitious goals ultimately de-motivate salespeople, easily achievable goals tend to receive unattractive payouts. Therefore, setting the right goals is of critical importance to set an environment in which salespeople can work and perform at their natural best.
I recently joined Walmart’s Sam’s Club as a Membership Representative. In my role, I am responsible for the sales of Sam’s Club’s attractive memberships – all of which are full of benefits to our members. As a Membership Representative, I have daily sales goals to achieve for each membership plan. To reach the goals, I not only have to perform the sales myself, but also have to align all frontline employees to my mission: encouraging them to offer Sam’s Club’s members membership upgrades to enjoy further perks of shopping at Sam’s.
My first few weeks have been amazing. I’ve been having a wonderful time both getting to know Sam’s Club’s brilliant employees as well as immersing myself in the company’s wholehearted culture. And I cannot express enough how great it feels to reach and exceed my sales goals. It becomes addictive!
However, as all salespeople know, there are some slow days in which, at no fault of our own, the goals we are set to achieve just seem unreachable.
I’ve come to realize that, in those days, the temptation of reaching our sales target compromise our ethics and moral standards. As salespeople, we are fueled by the dopamine-effect of each sale. It’s that feeling of “I’ve made it” that fuels our next sale. And the next, the next, the next…
That dopamine-effect becomes addictive. We have goals to accomplish and we won’t stop until we do so. As a result, we become tempted to ‘force’ our products or services onto our customer. In the process, we end up sacrificing our personal sense of ethics.
When that happens, we become victims of our own ambition. We stop being salespeople and become coercive and manipulative. Salespeople have the purpose to generate sales while making the life of the customer easier, simpler, and more enjoyable in some shape or form. When the fear of not reaching our goals strike us, we are tempted to force the purchase out of the customer. As a result, we coerce the customer to make the purchase no matter the cost.
That’s the danger behind setting overly ambitious sales goals: it can backfire in a way that will drive terrible negative consequences: your reputation will be on the line – customers will start distrusting you, employees will see you as a ‘going-for-the-jugular’ colleague, and managers will note your behavior. In the process, you will harm the company’s image and reputation as well, as salespeople and frontline employees are the face of the company in the eyes and ears of the customer.
How to Turn the Backfiring Effect of Setting Ambitious Sales Goals Around
To increase the productivity and efficacy of salespeople, rather than focusing on sales objectives, management should focus on sales reinforcement.
By sales reinforcement, I mean providing incentives other than just commission. It’s true that commissioning is a powerful motivator, but commissioning goes against human nature.
As humans, we are social beings. We do not work for the numbers we ought to accomplish. Our innate social state make us work for the people who rely on our performance.
Therefore, we cannot be accountable to numbers. We cannot make our objectives numerical. Instead, our objectives should be socially-oriented. Our goals and targets should be fostered based on the people that count on us. Not because we owe it to them, but because we want to make them proud.
Managers ought to motivate salespeople performance not by showing them how well have they accomplished their numerical sales goals, but by finding inspiring ways to show salespeople how their performance is contributing towards the team, advancing the company’s objectives, and making customers’ lives easier.
What if managers instead of offering salespeople a numerical dollar commission to reaching or exceeding sales goal offered the salespeople a paid vacation for the salesperson and his or her family somewhere the manager know they would have a great time? What if instead of receiving only money, the salespeople also received a framed photograph of the salespeople with the managers and the whole crew? What if instead of encouraging performance with monetary incentives, managers focused on the people the salesperson wants to make proud?
Probably offering a single commission payment will be cheaper and make more financial sense, but what would make a better investment in the long-term? Will the salesperson next year work for the extra cash, or for his/her family and people that count on him?
At the same time, management ought to spend time with their salespeople and benchmark their behavior not with the company’s objectives, but with the salesperson personal performance. The real measure for salespeople should not be the daily, weekly, or monthly sales goal set by corporate. Instead, it should be benchmarked with the salesperson’s own past performance. How are they performing compared to their last week’s sales? How are they performing compared to their sales last month?
The important thing to note is that there should be an upward trend. Yes, there will probably be some slumps in the road. But overall, is there an upward trend? If yes, then the goals are being reached. If not, what’s blocking a salesperson’s performance? What could be done better? What strategies do we ought to change?
Competition should not be against other salespeople, but against one’s own past performance.
When setting sales goals, make sure your goals are not discouraging and harming the company, but uplifting and inspiring both the organization and the salespeople. And make sure the rewards aren’t solely financial, but also have both a powerful emotional and social aspect of sincere value to the salesperson.