It is important to identify what an effective goal is. Goals that lead to measurable results are relevant, self-selected and time-specific. You as sales leaders define sales goals for your teams, quarterly or yearly. When you roll that out to your team, the reactions you generally get are:
These are the few reactions that tell you about the level of your sales performer and their engagement into your program.
If you look at these statements, its shouting out loud that one goal when set for all team members loses its relevancy. This can be a hit if they are on the underside of the sales rankings, a good push for your middle performers (contributes 60% of your sales) who’re motivated to put in more efforts. It would not be tough for your top achiever to raise their sales by 10% but it would look like an impossible thing to do for your low performer. This leads to disengagement at both levels!
Here comes a question, why should you be bothered about disengagement? The answer is simple, it shows the difference between meeting a sales goal and missing it completely. If the goals are germane, then majority of the team will ‘buy in’ and perform well to achieve the goal. This connects us to a principle in Behavioural Economics called idiosyncratic fit. It is the feeling that you enjoy a unique advantage in achieving a goal, making a sale, beating an opponent, or completing a task. Every time a salesperson on your team is offered a new incentive or opportunity, they ask themselves if the opportunity “fits” them.
In our experience designing incentive program and defining goals using the principles of Behavioural economics will increase the rate of achievement and improve overall performance. Let’s look at some of the principles you should take into consideration while defining the goals for your teams.
We always want to move on to the next level. Create specific milestones to monitor proximity to their goal. No one runs a marathon without first setting milestones for training. Your brain will do this automatically if you give it a chance.
Goal Gradient Theory:
We work harder, the closer we get to achieving a goal. Researchers say that a fast start leads to greater success and that knowing how well you’re doing along the way generates higher achievement too. Tracking should be relevant to seize the scope of your goal. Those who get off to a fast start in an incentive program typically finish 57% higher than those who don’t.
We do something because we know we’ll be rewarded for it. Determine the reward early on so you can focus on it as you approach your goal. The reward will also act as sweetener to your victory and an added deterrent to giving up- nobody likes to lose.
Contact our experts at BI WORLDWIDE India who can help you design your programs leveraging Behavioural economics for the best results.