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  Q. How can I set sales goals with any degree of reliability when this year’s economy is so uncertain?
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by Dave Kahle
copyright (MMXII)

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Dave Kahle
"I hope you enjoy this article. We have lots of resources on this site, ranging from dozens of similar free articles, podcasts, weekly features, books , CDs and video training programs. Enjoy! "

A. I can appreciate your problem. The economic atmosphere is so uncertain it’s difficult to predict what is going to happen even a month from now.

But that doesn’t mean that you ought to abandon the idea of focusing on measurable goals. Remember, one of the primary purposes of a goal is to identify those measurable results that should capture our focus. A goal says, in effect, “of all the things in the world that you could do, these few are the most important.” The existence of goals keeps everyone focused on the important things. Without a set of goals, everyone naturally defaults to unfocused, scattered behavior.

The issue is how to create a “reliable” goal. Here’s my suggestion. When you create your goals for the year, note the assumptions on which those goals are based. So, for example, you may say that you want “to produce $200,000 in gross margin in this territory.” On what assumptions is that goal based?

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Think it through. You may say, for example, that you are assuming that at least 90 percent of your customers will remain viable and in business throughout the year, that the total market will be down by ten percent, and that your competitors will likewise remain viable and in business.

Those are three pretty basic assumptions. You can add to the list with assumption about your ability to create and/or acquire product, the stability of your work force, etc.

Then, capture those assumptions in a file. Date it. Then create your goals based on those assumptions.

As you go through the year, the only time you would change or question your goal would be in the event of one or more major assumptions proving to be untrue. For example, one of your major competitors goes out of business.

That would be a change in a major assumption, and naturally lead to your increasing the goal to account for that event that was totally out of your control.

The opposite would also be true. Let’s say, for example, that one of your major customers is bought out and the decisions to buy your category of product now revert to a corporate office and a national contract. The customer was 20 percent of your business. This event dramatically reduces the amount of total gross margin available in the territory. Time to reduce the goals.

This is a fair and reasonable response to the issue of creating measurable goals in an uncertain economy. The uncertainty of the economy doesn’t eliminate the need for goals, in fact, it calls for even more focus on the part of sales organizations.

Hope this helps.

If you have any comments or questions, email them to me.
I do, of course, reserve the right to edit.


Here are a few articles by Dave
that you might be interested in reading:

  • What's the Best Way to Find a Good Salesperson... Good question! It seems that everyone has a favorite response. Some people only use recruiters, and others swear by networking. But classified ads continue to be the most common choice. Almost everyone who hires salespeople will, at some time, search for prospects via the "help wanted" section.... {Read More}
  • Is it Time to Revise Your Sales Compensation Plan?... If you're paying your sales reps straight commission, you're using an obsolete formula. If you're paying your sales reps a straight salary, you're also using an obsolete formula. Read this article to find out a much more effective way to compensate your sales staff.... {Read More}
  • How to Deal with the Salesperson Who Has Leveled Off... Every manager has, or will, confront this troublesome issue. It's arisen in every workshop for sales managers or branch managers I've done. One or more of your salespeople has leveled off. Their performance hasn't improved much in the last few years. Where before you were able to count on significant increases each year, now you can not. You know that these experienced salespeople can do better, but they seem unable or unwilling to break out of a certain level of performance. You are scratching your head, frustrated, and loosing sleep at night wondering how to improve the situation. What do you do?... {Read More}
There are also many other action-packed articles for sales professionals that offer how-to solutions to every day sales problems that you can read online at www.davekahle.com/article.htm.
 
Dave Kahle has trained tens of thousands of B2B salespeople, sales managers and business owners to be more effective in the 21st Century economy. He's authored nine books, and presented in 47 states and seven countries. To access Dave's training, insights and tools online, visit The Sales Resource Center. Visit www.davekahle.com to check out a seminar near you.
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