It’s a New Year and you know what that means? If you work in sales, its goal time! Yes friends, it’s that time of the year when leadership goes through the exercise of establishing the goals that will drive the company’s efforts in the new year. So, with that in mind, here are some very insightful best practices of value in this obligatory “plan for the new year” post. Here we go!
Begin by understanding the reasons why you set goals in the first place. “If we don’t make this number, we are screwed” while important to know, compelling and true, it should not be the only type of goal you set. How you determine the goals you set will not only help determine if you “made” it or not, but also influence the results. Realize that while it may be instructive to define metrics like volume and revenue as a lagging measure of success, it is more important to focus sales goals on the Leading Indicators of success. Leading indicators focus on the right strategic activities to deliver the volume and revenue. In other words, set goals for the activities you must do in order to achieve the big hairy volume number.
Next observe these general best practices for goal setting. First and foremost, observe the tried and true K.I.S.S. principle. That is, Keep it Simple, Stupid! Kind of self explanatory, but an important guideline nevertheless. Also observe the S.M.A.R.T principle. This mnemonic device is derived from enterprise project management disciplines and stands for specific, measurable, achievable, relevant and timely. Do make sure that the goals you set for sales meet each of these important criteria. Any wiggle room in the definition of what the sales person needs to do will cause ridiculous amount of wasted time and energy and frustrate the heck out of the team. Lastly, and we can’t stress it enough, always have some, if not most goals focus on Leading Indicators.
Best Practices for crafting Leading Indicator Goals to be both KISS and SMART compliant? Glad you asked! Set goals that target specific account segments so you can make sure activity occurs in the right account for the right product. For activities such as promotional events or staff trainings, establishing an actual number to-be-completed is fine (i.e. Do 10 Staff Trainings in Fine Dining Accounts for Brand X in January). However, for menus and distribution, it is better to use a percentage of accounts rather than just counting “new” ones. (i.e. Achieve Active Menus for Brand X in 50% of Fine Dining Accounts in Q1 2018.)
Here’s what not to do. In this example of a poorly conceived goal, a sales rep begins on January 1, 2018 with twenty menus in his accounts for Brand X (or a menu in 35% of his accounts.) The uninformed sales manager sets a goal for this intrepid salesman of securing five new menus in 2018. Our intrepid rep does manage to gain five new menus (but he loses 18 menus from existing accounts in the same time period)! This brings his number of active menus to 7 in 12% of his accounts. The poorly conceived goal led the rep to lose ground on menus despite that he technically did achieve the goal assigned.
Case in Point: A producer shared with me that his reps achieved all of their menu placement and distribution goals last year, yet still failed to meet their volume goal. When we reviewed their achievement against menus vs. the prior year, the total had gone indeed down! The goal was set to focus only on generating new menu placements without considering the importance of keeping existing ones. A better goal would have been to grow total menus vs prior period rather than strictly pursuing new ones.
Here’s what you should do! In this example of a well-conceived goal, our indomitable sales person is tasked with securing menus in 50% of his key accounts. That means, our sales person has to keep the menus in place on January 1st, and needs to add nine more to reach the total of 29 menus. From the outset, the framing of the goal makes clear to the rep that he/she has to grow his number of active menus in order to achieve his goal. Losses are not an option!
Other tips for setting successful goals include setting targets for distribution/accounts sold/POD by target account segment and by product. Always use a percentage increase on percentage of total accounts as the metric, and you can’t go wrong!
The GreatVines solution offers many ways to set effective sales goals. Here are some of the more commonly utilized features for establishing, executing, measuring and reporting on sales goals in GreatVines:
- Use Objective Plans (ex: Run report on top volume on-prem accounts and set objective to do staff training in each)
- Set Volume Goals (ex: Deplete 10% more volume than last year)
- Set Accounts Sold Goals (ex: Sell 20% more Fine Dining Accounts than last year)
- Set Menu Goals (ex: Get menus in 50% of key accounts)
- Set Staff Training Goals (ex: Execute 10 staff trainings in Nightclubs)
- Set KPI/Perfect Account Survey Score Goals (ex: Achieve average Score of 75% on High End Wine Shop KPI Survey)
Want to know more? Reach out today for a product demo and initial consultation to get ahead in 2018!