The 4 Biggest Sales Targets Mistakes to Avoid
Setting Sales Targets Mistakes to Avoid
No sales leader ever claimed that setting realistic and achievable sales quotas was easy. But most sales managers make it more difficult (and failure-prone) than it needs to be. Based on our experience of over two decades working with sales teams, we have identified the four biggest sales targets mistakes to avoid.
Sales Target Mistake #1 – Setting Quotas Behind Closed Doors
The biggest sales targets mistakes to avoid starts with not actively involving key stakeholders in creating your sales targets. The quota setting process should involve discussions around specific customers and their upcoming needs, strength of old and new relationships, likely competition, breadth and depth of relevant contacts, and both positive and negative trends in the business.
Though sales leaders have the final say, sales quotas should include input from the reps themselves who are closest to the risks and the opportunities in their customer base.
Sales Target Mistake #2 – Setting Quotas Solely Based on History
We find too many sales leaders get lazy and, instead of taking a fresh look at the year ahead, simply set an annual percentage increase in revenue based on the previous year. This is like predicting the future by only looking at the past. Sure, history can play an important part, but quotas should go beyond historical information to include customers’ emerging potential and challenges.
Look forward, not backward, as you establish sales goals for the year ahead.
Sales Target Mistake #3 – Demotivating High Performers by Automatic Annual Increases
High performers crave challenging goals. But one year does not predict the next. This is a corollary to basing quotas on history, but it has an added negative…it seems to penalize your top producers. Make sure there are increased rewards and recognition if you are going to ask more from your “A” team. Otherwise the higher quota will act more as a punishment than a reward.
Analyze the potential of a territory before automatically increasing what you expect from your top sales reps.
Sales Target Mistake #4 – No Method for Adjustment|
Sales quotas should represent stretch but attainable goals. Often, however, it quickly becomes apparent that some targets won’t be reached. It is OK to adjust quotas mid-stream as long as you have an agreed-upon methodology to do so.
Be sure you know why your sales rep will be unable to achieve quota and that the reason fits into your acceptable policy for failure. Then work together to establish an adjusted target and a way to avoid such a miscalculation the next time.
Tweaks to sales quotas drive everyone crazy. But there are times when adjustments are unavoidable. Just make sure your rationale for change is sound.
The Bottom Line
Don’t sabotage your sales team’s success by being sloppy about setting quotas. Do it together, looking more forward than backward, providing appropriate incentives for high performers, and setting up a system for making occasional, necessary adjustments.
To learn more about the biggest sales targets mistakes to avoid, download 3 Critical Sales Warning Signs at Your Strategic Accounts