The High Cost of Unrealistic Sales Goals

One of the greatest thrills of a top-performing salesperson comes from hitting their sales goal. Not just once, but consistently. So when you, as a leader, habitually put the targets out of the reach of even your best performers, it’s like shooting yourself in the foot and them in the heart.
Stretch goals are fine. Stretch goals are healthy. But there is a big difference between a stretch goal that offers a tantalizing challenge for your sales team and one that sucks the very life out of them.
shutterstock_142778230
The first and most costly part of unrealistic goal setting is silent non-compliance. Your best salespeople will just “check out” and the worst part is you won’t event know it. They’ll put on a rah-rah face and go through the motions, but inside their own heads they know full well there is no way that goal is getting met.
I would like to come right out and say that goal setting for sales teams is a fine art. I’m glad I own my own company, though, because if I’d used the word “art” in relation to “sales” in my former life (flesh pressed into the sweaty ranks of a corporate sales scrum), I’d be staked out on the ground and gagged with the sales leader’s tube socks. I’ve never been much of an athlete but, having spent a career in sales, I’ve had a belly full of sports analogies. Arms locked; head down; throw your gut into it; never quit; never say die. Second place is the first loser and all that.

I know I’m going off on a tangent here but this is a big part of the problem – especially in the adult beverage industry – sales teams led by frustrated “athletes” with pseudo-macho swagger. I’ve got no problem with “leaving it all on the field,” but last time I looked, a P&L wasn’t printed on Astroturf. Ironically, “winning” with customers from a sales perspective has absolutely nothing to do with “drive” and “guts.” It’s about much softer skills like dependability and trust. When I look for great salespeople, I don’t look for the drive of an athlete, I look for the heart of a servant. I place a much higher value on promise-keeping than butt-kicking. No doubt there are plenty of former (and current) athletes that are excellent sales pros doing a great job year after year. My point is unrealistic sales goals are too often created because of the macho mindset so prevalent in our industry.

OK, back to the main point. The second most expensive cost of setting unrealistic goals is that it fosters a culture of failure. What normally happens when a salesperson continually misses their goals? That’s right: they either quit or get fired. Either way, it’s failure through and through. Now, for those who might say, “Good riddance,” keep in mind it’s impossible to keep great salespeople on the roster in an environment like this because culture is important to sales pros and, as I’ve said before, culture eats strategy for breakfast. Per my previous post about why sales incentives don’t work, great salespeople aren’t going to respond to your “carrot and stick” approach. Nothing will drive them away faster than goals that are too high because nobody likes to feel like a failure.

So, what am I saying? Create a soft, cushy environment? Give everyone a trophy? Of course not. This is business we’re talking about. A business has goals and they need to be met consistently. Just be smart about it. Be mindful of the cost of unrealistic goals. One way to tell if your goals are too high is to ask yourself how often your team achieves them. If everyone on the sales team is missing the goals, they are probably too high.

The last cost of unrealistic sales goals that I’ll cite is poor quality of distribution. In the pursuit of aggressive goals, salespeople and distributors will do things that are not in the best interest of the brand. For example, a common tactic is to write lucrative incentives for distributors to go out and gain new distribution. While this might look good on the surface, what you end up with in reality is placements at restaurants and retailers where the account buys just enough to qualify the distributor sales rep for the incentive –and no more. A very large percentage of those accounts never purchase your products again. This goes on every day of the week all over the country. Is the equity of your brand truly enhanced when you gain 50 new points of distribution but 45 of them never purchase your product again? These “one-and-done” sales come back to bite you because there’s no stickiness to them. Now, for those companies wise enough to invest in a CRM system that is embedded with RAD data, this can be monitored. Without CRM, however, you may not even know this is happening.

Setting goals that stretch an organization to full potential is a critical business imperative for any consumer product company – especially within the hyper-competitive wine, spirits and beer industries. Goals that are unrealistic and un-achievable, however, are not only counter-productive but very costly in terms of failing to keep salespeople engaged and the erosion of precious brand equity.

Why Sales Incentives Don’t Work (And What To Do About It)

Conventional wisdom is a powerful thing but it is also frequently and horribly incorrect. As human beings, most of us are definitely motivated by rewards. But, when it comes to using sales incentives to “motivate” sales people, the misconceptions abound.
shutterstock_304246922
I’ve written before about the futility of trying to “motivate” salespeople. If a salesperson needs to be motivated, he/she shouldn’t be on your team. Period. End of story. If you can’t change your people, change your people. As my business hero, Marcus Lemonis, says, “People. Product. Process.” Businesses tend to spend way too much time on the Product part and not enough time on the People part. And when it comes to Sales People, it’s all too common to see them as interchangeable cogs in a machine that only requires a little grease now and again to make it move faster.

Great salespeople need no motivation outside of themselves to consistently perform at a high level. I speak from experience here. Some of the top performing salespeople I’ve led over the years had absolutely no idea where they stood in relation to their annual bonus attainment as the year drew to a close. Sure, they loved getting the bonus every year – in fact, they expected it. But, the way they got it was to work themselves into the ground and then wait and see what their bonus was. I kid you not. And guess what? Their bonus was always the largest among the team members.

Most great salespeople care about two things above all else: winning and pleasing their customers. It’s in their DNA. They jump out of bed every day and attack their jobs with gusto. They do it because that’s who they are and not because someone else is “driving” them. By the way, whenever I see a business plan that has the phrase, “drive sales by doing ____,” I want to throw up in my mouth. These plans are written by people who don’t have a clue how to achieve outstanding sales results year after year. But I digress. The very best sales people will walk through walls to please their customers (and they do it of their own accord). They will work long hours to keep their promises. And, yes, they expect to be rewarded for their efforts. The primary job of a sales leader, therefore, is to find and keep these people – not to create clever ways to motivate them.

Let me pause to clarify something. I am not saying you should not offer sales incentives and bonuses to your top performers. Quite to the contrary. Just don’t go around thinking you can get an average or mediocre salesperson to improve their performance because you hold out some juicy carrot.

So what can you do? There are far better ways to accelerate your sales results. Assuming you have great sales people to start with, ask yourself (and maybe a few sales team members) some of these questions below. A word of caution here – if you’re not 100% committed to solving the deficiencies you uncover, don’t even go down this path. You’ll end up doing more harm than good by giving your sales team false hope.

1) Does your sales team have the tools and resources to do their job well?
2) Are you making it easier or harder for them to keep their promises to their customers?
3) Do they have realistic sales goals?
4) Do the goal posts keep moving?
5) Are the rewards for keeping and maintaining your best customers commensurate with acquiring new customers?
6) Do you routinely provide recognition of top performers among their peers – especially at company-wide gatherings?

Some of the things on this list cost very little, and those that do cost money offer a much higher return on investment than offering more “incentives” to your sales people.
Lastly, please consider the wisdom offered in this great Ted Talk by Daniel Pink called “The Puzzle of Motivation.” It’s a good place to start if you’re ready to start seeing sales incentives in a whole new light.