The job of a sales director is to equip sellers with sales navigation

In today’s business world of ruthless competition, it cannot be expected that sellers will come up with the best approach to sales on their own. Someone must clearly show them the right path; otherwise, they will learn from mistakes for which they have neither the time nor the energy. The most likely, fastest, and most effective way to exceed their goals is through good leadership, clear objectives, and, above all, a roadmap on how to achieve those goals.

Sales directors and managers often discuss goals with their sellers. They talk about whether the goals have been achieved, who has not met them, who has exceeded them the most, etc. When sales directors talk about goals, they talk about sales value, margins, payment delays, and so on. These are business goals related to sales set by management or owners, and sales directors distribute them among sellers according to a formula.

Business goals related to sales are undoubtedly important. Ultimately, the success of the company depends on achieving these goals. But they have one drawback: they tell sellers what they need to do, i.e., where the finish line is, but do not say anything about how to get there. In other words, the business goals themselves do not provide enough information for their systematic achievement or exceeding at the level of individual sellers and at the level of the sales department.

Counterproductive effect

When sales management is based on business goals, motivational meetings of sales directors with sellers follow a script that every experienced seller has experienced multiple times: ‘Colleagues, I just came from a meeting with the director. He is dissatisfied with our sales results. We are sixteen percent below the sales plan, and there are only two months left until the end of the year. It will be necessary to shift into a higher gear and enter the market more aggressively. Stipe is proof that it can be done better; he is seven percent above the plan. I believe you will succeed in the end. Don’t forget that rich bonuses await you if you manage to achieve the annual plan.’ Although such speeches from sales directors are sincere, well-intentioned, and with a great desire for greater motivation, their effect is often precisely the opposite. Motivation even decreases in the short term, and sales results do not change at all. The reason for the ineffectiveness of such meetings lies in the fact that they do not provide feedback to sellers on how to change their activities to achieve the plan. Sellers at the meeting did not learn anything new; they just received a reminder that they had been unsuccessful. A sixteen percent delay from the plan can be compensated in various ways: the number of visits can be increased or even decreased, but better prepared for them; other goals can be selected with qualification; activities can be directed towards another product; the sales process can be changed because, for example, the current interlocutors have no influence or interest in moving the procurement process one step further…

Only one right option

Of all the options, one will help sellers the most to catch the plan. In today’s world, where competing sellers are perfectly equipped with information, we cannot expect sellers to come up with the optimal approach on their own. They must be clearly shown the right path; otherwise, they will learn from mistakes for which they have neither the time nor the energy. The job of the sales director is to equip sellers with sales navigation that shows them, like Google Maps, the most likely, fastest, and most effective way to exceed their goals. That sales navigation is the sales goals.

Setting sales goals is a process that begins with reviewing the current sales situation. Before that, the best sales managers thoroughly examine how successfully the company meets customers, how effective the sales process is, whether the product mix aligns with marketing goals, whether sellers are satisfied and engaged, etc. Analyzing the process and results reveals deficiencies in the performance of the sales team. In setting performance management, we pair that data with business goals for the future period. Based on years of experience, I can say that the best next protocol for setting goals is: business goals, sales goals, organization and working conditions, sales activities, and competencies.

Ensures precise measurement

The correct approach to setting goals, based on a systematic process of planning criteria and goal heights, has many advantages. The most important advantage of breaking down business goals into sales goals, organizational goals, activities, and competencies is that it allows us to measure the performance of the sales department precisely, as well as that of each seller. The right goals facilitate the onboarding of new sellers, and for the weaker ones, they provide undeniable information on what and how they must change to improve results. And the result is predictably better sales results.

Example from practice: How one wholesale company did it

The correct approach to setting sales goals is easiest to illustrate with an example from the practice of a wholesale company that is one of the leaders in its industry. A company with decades of tradition stagnated for three consecutive years. It employed eight experienced sellers who took care of all customers in their area. Analysis showed that the largest gap in sales was with large customers. Although the company supplies almost half of the largest customers in the market, the market share of those customers is relatively small. The company set an ambitious business goal of increasing sales by twenty percent.

Setting goals. The company set two key sales goals, one in the area of customers and one in the area of products. The key sale in the area of customers was to increase sales to key customers by 25 percent. In the area of products, the key sales goal was related to a new innovative product. The goal was to acquire 15 large customers to start continuously using that product.

Reorganization. Based on the sales goals, the sales director set an organizational goal of reorganizing work or changing sales processes in such a way that the net selling time to key customers increases by 30 percent. The company set a goal to divide customers into two groups. Group A customers were important customers who needed to be visited more intensively. Group B customers were those with a purchasing value or potential of less than two thousand euros in margin per year. They were directed towards online purchasing or telephone support and sales. Group A customers were divided among six sellers, while Group B customers were covered by two sellers by phone.

Sales activities. The next level of goals was sales activities. Sellers in the call center who took care of Group B customers had goals based on two criteria: the number of calls to customers and the conversion of calls into purchases. Sellers covering Group A customers had the following criteria: the number and quality of the customer plan, the number of visits to each customer, the number of presentations of the new innovative product to the customer’s expert team responsible for the problem that the new product solves.

Competencies. After setting sales activities, it was not difficult to set the competency goal: the goal for call center sellers, who had not yet performed that job, was focused on acquiring telephone sales competencies. For them, the goal was to attend at least two days of telephone sales training and four days of telephone sales training. Field sellers had the following competency acquisition goals in their plan: training for developing and implementing the key customer plan and product training on the advantages of the new product.

Results. The result of quality goal setting and strict implementation of that plan is a sales increase of 31 percent, with sales to Group A customers increasing by as much as 34 percent, while sales to other customers slightly decreased. Nineteen large customers started using the new product. The reorganization was fully implemented. The activity plan and the competency plan were also fully realized.