If your company uses a remuneration system based on pre-established sales targets, you may be wondering how to set them properly to motivate your team.
Every company that wants to make a profit needs to sell in order to be profitable. Therefore, setting coherent objectives can help us become more productive while stimulating the sales team and optimising the business management Sales activity .
Sales targets are therefore the great motivation of sales teams. For this reason, the characteristics and functioning of the remuneration system must be clear to salespeople and sales managers.
Define sales targets clearly
If a worker does not know how his compensation system works and his commissions for sales made, he may not be motivated to sell more.
I have seen in my career some unthinkable and impossible metrics to calculate quickly and easily what the sales team was going to charge based on their sales. Too many conditionals, too many “if”.
The result: you’re about to end the month and you don’t really know what you need to achieve your goal. And this is not good either for the worker or for the company.
Sometimes companies set complex targets to ensure cross-selling and sell other value-added products or products that are more difficult to place. For example, financing and/or insurance on the sale of a car, etc. But the result is a remuneration system that is incomprehensible or difficult to calculate.
It is true that in many companies offering these “value-added” by-products make the difference in order to be profitable and make more profit. The way to introduce them in the sales objectives must be simple and not have too many conditioning factors that make the team lose motivation when thinking that they are impossible to achieve.
Study the market and adapt
Se realista. Study what your employees are likely to achieve and set a minimum below it. It is better that the reward is smaller but easier to get and that it increases exponentially.
The objectives should vary from month to month, since, as you will see in your CRM, the same is not sold every month of the year. Therefore, adapting to changes will be essential.
Help your team achieve sales targets
We recommend weekly or biweekly meetings to monitor sales targets. This allows the company to react in time to help those members of the team who have some difficulty in reaching the goal.
They should see that you care about them reaching their goals. That your goal is that they also benefit from the company’s profit with the effort they make.
You can establish a ‘recovery plan’. We can all have a month that is worse for us. In order to avoid having the feeling of having “lost” a month’s sales for not having reached the minimum of the objectives, you can establish a system that allows the salesperson to “recover” those sales from the previous month if he achieves an extra goal, different from the main objectives. In this way you can help your team feel that you care about their motivation and that you want to help them achieve their goals.
Types of sales targets
It will depend on what your company does that it may be more profitable to set some types of sales targets or others. Let’s give an example of the most common types that exist.
- Objectives by quantity or volume. That is, if we sell a unit of product we will get x commissions. If we sell two units, 2x.
- Objectives for profitability. The commercial commission will vary depending on the profitability that has been obtained in the sale of the product. It is usually applied as a percentage.
- Sales targets per product line. This is the case for companies that work with different suppliers and must achieve a minimum share of each product.
- Objectives for loyalty. Reward the commercial who gets the customer to maintain the service with the company for longer.
There are as many types of objectives as there are companies or sectors. We will have to find a way to carry out a sales strategy that ensures how the company (and its employees) can achieve the objectives set. It will not be easy and many options must be considered. We can help ourselves with tools such as a CRM that gives us the necessary information and allows us to keep track of the achievement of objectives. In this way we can react early enough to reach them.
What you should not forget
Obviously, the profits your commercials make are a cost to your business. It is essential to find the balance between making the business profitable with the sales of your employees and at the same time that they feel part of making that profit.
So if you know what revenue budget you have with the profits generated by sales, you will know what expense budget your company has to set sales targets based on the commissions you can offer your employees.
Don’t forget that motivating your team, in turn, will help you generate more benefits.
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