Do more sales teams need to consider moving away from the monthly sales target?
I recently had a discussion with a client about the sales forecasting accuracy of his team and the inconsistency that most members of the team were suffering from, he used the example of one particular member of the sales team whose performance was indicative of where his frustration was coming from, this particular salesperson was slightly over their target YTD after the first three quarters of the year but for two of the three months of each quarter they were below their monthly target but on the final month of each quarter they exceeded their target, his frustration was being compounded by the fact that the senior team would consistently scrutinise and focus on the fact that the team would generally have at least one if not two bad months before finishing the quarter strongly.
I have been working with this particular client for the past seven months and I had observed these trends myself and during our last quarterly wrap-up session, I suggested the idea of looking at a variation of how they measured their sales teams sales results that moved away from the monthly sales number.
It was this discussion that led to this particular conversation, the sales team in question sells a fairly uncomplicated solution but they more recently have seen a gradual increase in the length of time it takes for a decision to be made, decisions that 18 -24 months ago would have been completed in half or a third of the time are now taking an average of 9 – 12 weeks to complete, during my time working with the team we had explored and developed every aspect of their sales process and sales approach but it kept coming back to this factor, the sales team weren’t underperforming they’re results were simply being measured in the wrong way.
Monthly sales targets have been a fundamental aspect of the vast majority of sales teams across the world and for many years this function has served its purpose extremely well but whereas we have seen so much progression and development in terms of sales methodologies and techniques we have seen very little in the way of fresh thinking when it comes to how we measure the success of our sales teams even the almost widespread introduction of CRM systems have had little impact on the thinking towards monthly sales targets.
The fundamental influences behind my belief as to why more sales teams should consider looking at an alternative to the monthly sales cycle comes from two external influences, one being how people make their buying decisions has changed fundamentally over the past few years and also the point at which buyers allow salespeople to come into the sales/buying process has become later and later in many buying processes. The other comes from the fact that more and more buying processes are becoming more complicated and protracted, due to a variety of factors ranging from an increase in the number of people involved in the process to the necessity to build additional levels of ratification in the decision-making process making the average buying process two or even in some cases three times longer.
There is obviously an argument that even with an increase in protracted buying cycles you could still manage these sales within a monthly sales target but my point is to encourage more sales managers to look at alternatives to the historic monthly sales target, just because this has always been the way things have been done doesn’t mean that if a change to a sales target measured over a different timescale shouldn’t be considered.
Food for thought perhaps?