A client asks, "Given the uncertainties of
the current economy, I am having a difficult
time setting sales goals for next year. If I
set quotas too high, the reps may get
discouraged early in the year. If I set them
too low, the reps may not give the maximum
effort. None of them achieved quota this
year. Most were frustrated and demoralized
by the first quarter."
Setting sales goals involves getting input
from several sources: industry data, sales
representatives, and
customer / peers / competitors. Your own
business experience counts for a lot too.
When the economy is strong, many managers
skip the due diligence, increase quotas by
what they feel is a reasonable amount, and
let it go at that. In down economies, doing
homework before setting goals is a must.
Ask yourself the following questions in
preparation for setting 2010 sales goals:
- How many of my sales representatives
achieved quota this year?
- What was the average percentage by which
they exceeded quota?
- How many of my sales representatives did
not achieve quota?
- What was the average percentage by which
they missed quota?
For both groups, consider the following:
Industry Data
- How did the overall economy affect sales
in each salesperson's territory?
- What are the top three industries in
their territory?
- What percentages of their accounts are in
those industries?
- Were those particular industries
adversely affected by current economic
conditions?
- Were specific accounts affected more
adversely than others?
Sales Representatives
- Has each sales representative asked their
accounts how much they anticipate purchasing
from the company next year?
- How do the sales representative's
accounts feel the economy will impact them in
2010?
- Have the sales representatives turned in
a 2010 sales forecast estimate for their
territory based on what they've been told by
their accounts?
- Will they be turning in a new business
forecast?
For yourself, consider the following:
Customers / Peers / Competitors
- How many accounts have I spoken to
directly?
- Am I open to having a candid discussion
with them about sales revenue for 2010?
- Will the sales reps and customers be
candid with me?
- How many peers / competitors have a I
spoken with this year?
- What are they saying?
- What are the business newspapers and
industry trade journals saying / predicting?
- What plans do my company / competitors have
for introducing new products or services?
- Am I accounting for that as I set goals?
Anyone managing a sales force is remiss if
they don't set quotas that encourage sales
reps to make an extra effort every day.
Before determining those goals, make sure the
base number that you start with is grounded
in the reality of current economic conditions.
Thank you for all of the great questions that
you submitted in 2009. I hope the questions
and the answers have helped readers of this
newsletter increase productivity in their own
sales departments.
Have a wonderful holiday season!
Suzanne
