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Chap 11 Tanner - Setting Goals & Managing The Sales Force Performance 01 Feb 2017
Chap 11 Tanner - Setting Goals & Managing The Sales Force Performance 01 Feb 2017
11-1
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Learning Objectives
Describe how sales managers use goals to guide
and control the efforts of their sales forces
Summarize the elements of an effective goal
Distinguish when different outcomes and
behavioral sales goals should be used
Identify different resources available to capture
information used for making effective decisions
on goals
Apply goal-setting theory in order to improve
managerial and motivational practices
11-2
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
What’s Involved with Goal Setting?
Monitoring Salespeople
Market Conditions
Competitor Reactions
Following Up
11-3
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Why Set Sales Goals (Quotas)?
Sales goal (quota): performance standard by
which salespeople are measured
Sales goals are useful for several reasons
Synchronize direction and efforts of sales force
with plans developed
by top managers
Benchmark performance
Achievement of goals
can be motivating and
is usually tied to
compensation
11-4
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Using Goals to Guide and Manage
Performance of a Sales Force
Achievable goals can help motivate the sales force
Motivate
Goals serve as benchmarks to help gauge how reps
Sales Force are doing
Canada
Iceland
Faroe Is. (Den.) Norway
Ireland
United Kingdom
Den.
Sweden
Finland
Estonia
Latvia
Lithuania
Belarus
Russia 60°
Aleutian Islands (USA)
S. Korea Japan
North Pacific Ocean Cyp. Leb. Syria North Pacific Ocean
Oman Laos
Mauritania
Short-term goals in US
Bolivia Madagascar
Namibia Zimbabwe Fiji
French Polynesia (Fr.) New Caledonia
Botswana
Paraguay Mauritius Indian Ocean
Swaziland
Australia
Tasmania
Sources: Cravens, David W., Nigel F. Piercy, and George S. Low (2006). “Globalization of the Sales Organization: Management Control
and Its Consequences,” Organizational Dynamics (35)3: 291–303;
AntarcticaT. Garrison (2001). International Business Culture. 3rd ed.
Cambridgeshire, England: ELM Publications; and Honeycutt, Earl D., John B. Ford, and Antonis C. Simintiras (2003). Sales
Management: Global Perspective. London: Routledge.
11-6
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Different Types of Goals or Quotas
11-7
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Using a Combination of Goals
Sales volume traditionally most frequent measure
Advantage: easily counted and analyzed
Advantage: reps understand these goals
Disadvantage: sole metric may not accurately provide
complete picture
Input + output goals
Ensure certain customer
service activities are
performed
And certain amount
of profitable sales are made
11-8
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Pipeline Analysis
Pipeline analysis: how well rep maintains stream
of customers at different stages in sales process
Broken into the list
of the top 5
measurements in
recent years
11-9
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
11-11
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Pipeline Analysis (Funnel)
11-12
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Typical Input and Output Goals
11-13
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Where Should Your Salespeople Find
Their Leads?
11-14
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Metrics Related to Customer Service
<15% include customer retention and satisfaction
metrics in their goals
Customer satisfaction can be difficult to measure
Sometimes easier to count number of customer
complaints than gauge the service customers are
getting
More accurate but time-consuming approach is to
develop customer satisfaction measure consisting of a
number of metrics
Example: student advising
11-15
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Expense Quotas
Keep the costs associated with rep’s sales in
line with what the firm thinks the rep should
spend in order to be successful
Often calculated as % of sales
11-16
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Assigning Weights to Goals
11-17
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Choosing the Right Metrics and Time
Period to Track
Too many measures makes it more difficult to
focus on the “critical few” metrics
More than 7-9 metrics becomes difficult to manage
Most sales organizations establish their sales
goals on a yearly basis
Break down yearly figure into quarters and sometimes
monthly units
Short or rapid sales cycles, such as in-bound call
centers or retail establishments, might use weekly or
hourly units
11-18
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
What About Almost Meeting a Goal?
All-or-nothing approach
vs.
Reward for reaching part of a goal
90% threshold goal
100% actual goal
110% stretch goal
11-19
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Should Salespeople Be Involved in
Setting Their Own Goals?
>60% solicit input from
sales force about goals set
for them
Helps improve rep morale
because managers better
understand obstacles
Disadvantage: reps have
incentive to lowball goals
11-20
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
When Is a Sale a Sale?
Count the sale when the
product is either shipped or
paid for
Difficult with long sales
cycle
Compromise: offer partial
credit (30%) when order is
placed, remainder (70%)
when order ships
Must clearly communicate
this info to reps
11-21
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Reasons for Not Reaching Sales Goals
Flawed sales projections New competitors and
based on limited marketing competing products entering
research marketplace
Changes in marketing mix Environmental factors affect
variables resulting in inferior customer demand and cause
products or services customers to postpone or
Increase in cost of supplies cancel their purchases
passed on to buyers via Change in laws and
higher product prices regulations preventing or
Promotional campaigns don’t restricting use of products and
produce projected results services or making them more
expensive
Delays or other problems with
distribution of products Changes in the way firms do
business, for example, as a
result of new technology
11-22
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
False Reporting of Activities
Recently 2 inside salespeople had erroneously
reported the number of leads that they had counted
as part of their goals; their manipulation of these
reports cost the company over $100,000 in lost
opportunity costs
Their sales manager found their reporting
inaccuracies
If you were the sales manager what would you do?
In this case, they were fired on the spot. Do you
think this was too harsh?
For more details see, “The Right Path,” Gwen Moran, Selling Power, Nov./Dec. (2008), 28/9, 30-33.
11-23
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Do Goals Ever Get Changed or
Altered?
Most companies adjust goals yearly
Also common to adjust during the year
Shouldn’t adjust too many times through year
Confusion
Reps feel cheated
11-24
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
The Process of Setting Good Goals
SMART format for establishing goals
S pecific
Measurable
A chievable, yet challenging
R ealistic
T ime-based
11-25
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
The Process of Setting Good Goals
Difficult goals lead to higher levels of
performance
Reps will put forth more effort when their goals are
somewhat difficult vs. too easy or too difficult
Specific, difficult goals lead to higher levels of
effort than general ones
Specific, difficult goals–for example, calling on 8 clients
a day–will lead to higher levels of performance
11-26
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Ethics in Sales Management: When Do
Difficult Goals Become Too Difficult?
Setting quotas so high that the average rep
thinks it’s unobtainable can result in unethical
behavior
Example: dot-com ad sales, “just get the job done,” led
to rep lying to customers
Example: Sears Automotive Centers, reps overcharged
for repairs and recommended unnecessary repairs
Damages reputations, sometimes causes
businesses to close
Sources: Strout, Erin (2002). “To Tell the Truth,” Sales & Marketing Management (154)7: 40–47; and
Mitchell, Carol Vallone, Patricia M. Schaeffer, and Katherine A. Nelson (2005). “Rewarding Ethical
Behavior,” workspan magazine (July), Vol. 48, No. 7.
11-27
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Goal-Setting Impacts Performance
Goals provide focus and direction
Direct
Direct attention and efforts toward goal-relevant
Efforts behaviors and away from less relevant behaviors
3 Having too many goals can create stress, keep the number of goals
to a reasonable number; clarify importance for prioritization
4 Get reps to commit to their goals by explaining how they have been
set
11-29
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
Practical Guidelines for Setting Goals
5 Clearly indicate how the sales performance will be measured and
rewarded
11-30
Copyright © 2009 Pearson Education, Inc. Publishing as Prentice Hall.
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