Don’t Set Sales Goals in Your 2010 Sales Incentive

I don’t know if the economy is recovering or not.  Based on yesterday’s market performance (or the day before that – or the day before that – or the day … oh, you get the point) my guess is that we’re a bit further away from any big rebound than we thought a few weeks ago.  However, I have heard sales and marketing folks saying things are better in 2010 than they have been.  You’ll hear someone say things are good “compared to last year” or “compared to 2008.”

In other words compared to a two-year drop that was arguably the worst since the 1990’s or even 1930’s things are okay.  

So I ask this question…

"If you have sales people on bonus, commission or reward plans how are you setting their goals? " 

Goal Setting Ala Blake*

Most companies look to last year and put a “stretch” factor on top of those numbers.  If you sold 100 units last year – this year it’s 115.  200 units – target set for 230 – or some such process.

Some really, really hardnosed companies like Premier Properties* may even use the highs of 2008 as their starting point and basically say – “hey – your job is to sell – not my problem the economy tanked – you find the customers.  Someone is buying.”

So you have a choice, lower the sales base for setting goals or keep the goals the same as if the economy never moved an inch.  

During a downturn in an economy such as the one we’re in, selling is a tough, tough business.  Buyers are extremely risk averse.  Buyers are closing the windows, the doors, the doggie doors and the air vents to keep sales people at bay.  The sales people are desperate.  The buyers are scared and in many cased broke.  So why put ANY incentive in place for sales?  It’s a Sisyphean task to even attempt to hit goals in excess of last year or even the year before.

Another Approach

Here’s a thought to consider.  Use the down turn for upgrading the sales staff instead of berating them.

Don’t run a sales incentive at all.  

Run incentives geared to relationship building and skill development. There won’t be a better time to up your sales people’s skill levels and improve connections to their clients.

If I ran a sales organization of any size during this economy I’d…

• Train them on the new media options available for connecting to customers (twitter, linkedin, facebook, etc.) and reward them for using them.  Nothing too heavy – just enough to break their luddite inertia.
   
• Reward sales people for developing sales plans for the future – ask them – “What will you do when the economy starts to rebound for real?  What is your plan?”  Reward them for research and planning now.  Nothing beats a prepared mind.
   
• Get sales people to spend time with old customers and new markets without a requirement for a sale.  Convey that thought to the customers.  Tell them – “we WON’T sell you.”  Get your sales people to learn their customer’s business.
   
• Let sales people take on roles internally while the market is slow.  Let them work in customer service.  Let them work in the marketing department.
   

In other words… use this opportunity to reduce the stress on your sales people and at the same time get them more prepared for the uptick in the market when it occurs.

Who will win when the economy rebounds?  Those that kept banging on doors hoping to make a sale but simply made a pest of themselves or those that took the time to update their skills, update their understanding of their customers, update their understanding of their own company and research and develop a plan?

Who will stay with their company longer – Those that kept feeling the lash or those who were able to grow in a caring and understanding environment?

Don’t assume more pressure is the solution.  Less pressure may be what is needed right now.

Thoughts?

*if you know these references pop into the comments and let me know.