Management Tip of The Week

THE MANAGEMENT TIP OF THE DAY: Harvard Business Review

October 08, 2016

Make Sure Your Sales Goals Aren’t Unrealistic

When a majority of salespeople miss a goal, it’s often because the management team set the goal too high. Unrealistic goals not only dampen sales but also cause top-performing salespeople to get frustrated and leave. Here’s how to assess whether your sales goals are stretching into the impossible:

  • Track historic goal achievement outcomes. Set a benchmark for the percent of salespeople that should make their goals (typically 60%–75%). If the percentage is consistently below the benchmark, then your goals likely are too high.
  • Prevent padding. Don’t allow senior leaders to pad national or regional goals before handing them down. Determine whether padding is occurring, to what extent, and at what organizational level — so you can stop it.
  • Use diagnostics. Classify salespeople into high-, average-, and low-performance segments, and track and compare voluntary attrition rates across the segments. Excessive attrition of high performers coupled with low goal achievement may mean your goals are overstretched.

Adapted from “Can Your Sales Team Actually Achieve Their Stretch Goals?” by Andris A. Zoltners, PK Sinha, and Sally E. Lorimer

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