As we close out 2015, now is the time to lock in your goals for 2016. Make a New Year’s resolution to stop setting goals solely for lagging sales indicators like shipments, and focus on implementing effectual sales goals for your team. Make improvements in 2016 by setting goals around key performance indicators that are true leading sales indicators and reflect your sales strategy. Ask yourself, “What 3 strategic initiatives must we execute to ultimately achieve our goals?” Include as much detail as possible to ensure the initiatives and associated goals are clear yet concise.
Here are 3 common “lagging indicator” sales goals deployed by suppliers and why they’re not ideal, followed by some better options.
The Worst: Ship 1,000 cases to distributors in 2016. This is too vague and even if reached, may not result in success for the company. The result of this goal could overload the distributor with excess inventory. It may also represent the wrong product mix needed to achieve the profit target, and it doesn’t ensure your strategy is being executed. With this goal, the distributor could completely fail to execute your strategy, in spite of achieving the shipment goal which, ultimately isn’t really of much value.
Bad: Deplete 1,000 cases from distributors warehouses in 2016. Again we see a strategy lacking any ties to strategic imperatives. The distributor could sell all the cases to Costco where you have to fund a low price, while losing distribution in other key accounts and still achieve the goal.
Not Good: Achieve $100,000 in revenue in 2016. The “how” is equally important as the “what”, but this goal doesn’t specify any desired strategic execution. Not only is profit (which is not addressed here) more important than revenue, the more important factors around how the numbers are achieved are not addressed.
Here are 3 alternatives that actually drive better sales that are worth rewarding.
- Increase on-premise accounts sold by 15% each quarter. It’s as basic a strategy as you can have, but it drives the execution of something of value that will increase sales in a healthy way.
- Maintain 80% of fine wine shops with an eye level, 3-bottle-facing billboard showing pricing of $14.99. This goal clearly dictates a strategy that if executed, enhances the distribution, visibility and health of the brand and consequently delivers volume.
- Secure tap handles lasting at least 6 months in 75% of target key accounts. By building goals around the execution of a key sales driver in specific accounts, sales teams are focused on what’s important.
The key to establishing smart goals is focusing on the strategic imperatives that, if executed, will deliver the volume and financial results the company desires. Stay away from generic quantitative volume and revenue goals. If you’re still having trouble, begin by identifying the three things your company must do to be successful in 2016, and go from there. If you believe the notion “if we execute these initiatives, the volume will follow”, you’ll not only have a good strategy in place, but you’ll also achieve the goals to support your plan’s execution.
The three tier system can pose some challenges, and executing your strategy through distributors is certainly one of them. Part of the challenge in getting suppliers to deploy goals like this is rooted in their inability to plan, execute and measure these specific sales drivers. “These things are impossible to measure”, you say? GreatVines enables this level of sophisticated, precise execution at scale.
Now is the time to get 2016 started off on the right foot. Let us know if we can help!