Consult Carson 4/29/15: “What is a reasonable increase to an annual sales goal?”

From today’s mailbag: “What is a reasonable increase to an annual sales goal? Mine went up by 50% this year, is that reasonable?”

Carson: Excellent question, and one that – if you are in sales – you will no doubt experience numerous times. Sales goals can sometimes change like the weather and, unless you work in an environment of transparency (rarer and rarer these days), often with zero rhyme or reason.

Here’s the thing: goals are going to rise – it’s inevitable. It is like when you get good grades and your parents start to expect it. It’s like when you give your children gifts every time you come home from a trip – they expect it. Specifically if you are part of a growing sales organization and initial goals were set with mere speculation; people will start hitting the goals and they will raise them to lessen bonus payouts. They will want more and more and more; sometimes rightfully so, but there is often not enough practical process to their methods.

Let me backtrack to the goals setting process; my thought process when setting goals has always been around looking at what the second quartile of achievers was achieving and what the median was achieving; pretty much taking a median of that second quartile for each metric. I’m shooting for a lift of the average, so I plot that as the benchmark and focus on the best practices of those already hitting the mark in order to get there.

You don’t want 50%+ of your current achievers hitting every single metric or for your initial sampling’s average being better than your goal. It is also wise to set a budget goal and a stretch goal. But, that said, if 75-80% of your workforce is exceeding your revenue goal it is not out of line to expect an adjustment.

To necessitate a 50% lift in sales goals, look around. How are other performers doing relative to the goals? How many total achievers are there above and below the Mendoza line? I’ve literally worked in an environment where just 2 of 121 were hitting goal (thank goodness I was one of the 2) and another where 80% were; both were drastic and adjustment-worthy ends of the spectrum.

Again, the key comes to transparency. I believe a transparent leadership team will share the reason behind goals; a workforce can and should know what budgets look like to keep the lights on and the method behind the goal-setting. If your goal was hiked by 50%, relatively few people are hitting goal and no one is explaining why – there could be a serious problem. As a leader, I expect around 40% of performers to be hitting goals, but this can be much better when you have other statistical data to take into consideration. Historical data can be exceptionally helpful when charting seasonal trends and expectations. Also, what was the hike in goal from the previous year over year versus the actuals? All of these trends, coupled with changes in the industry and product offerings and pricing and competition and workforce will help clearly define how a forecast may look. But for a 50% jump, it should only occur in an environment where nearly everyone was already hitting goal and the change is being made to even things out.

If your sales goal spikes like this and you’re not being given the reason why, ensure this is tactfully broached in your next meeting with your manager. But quote facts! “Mr./Mrs. Manager, last year, 80% of our workforce missed goal. Goal went up by 50%. Now, 95% of our workforce is missing goal. What is the thought process, and how do you recommend I shift my process?” Work to understand the process, and develop a strategy with your manager to get that 50% lift. Or (as is often the case), just ride it out until they come to their senses.

*******************************************************************************

Carson V. Heady posts for “Consult Carson” serving as the “Dear Abby” of sales and sales leadership. You may post any question that puzzles you regarding sales and sales leadership careers: interviewing, the sales process, advancing and achieving. You will also be directly contributing to his third book, “A Salesman Forever.”

Question submissions can be made via LinkedIn to Carson V. Heady, this Facebook page: https://www.facebook.com/pages/Carson-V-Heady/125078150858064?ref=hl , Twitter via @cvheady007 or e-mail at cvheady007@yahoo.com or you may post an anonymous comment as a reply to my WordPress blog at the bottom of this page: https://carsonvheady.wordpress.com/the-home-of-birth-of-a-salesman-2010-published-by-world-audience-inc-and-the-salesman-against-the-world-2014/

Carson V. Heady has written a book entitled “Birth of a Salesman” that has a unique spin that shows you proven sales principles designed to birth in you the top producer you were born to be.

If you would like to strengthen your sales skills, go to http://www.amazon.com/dp/B00ICRVMI2/ref=cm_sw_r_tw_dp_yGXKtb0G28TWF