Businesses are raising their sales targets, and increasingly, their salespeople don’t think they can hit them.
That’s the news from research released this morning by Sydney sales consultancy The Synergy Group.
Last year when they surveyed sales professionals, they found 91% expected to hit their sales targets for the year.
But in 2014, 70% of sales professionals surveyed expect their targets to increase between 6% and 25%. And only more than a third (36%) think they have no chance of hitting those targets.
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The study surveyed large and small business sales professionals. But it also analysed the performance of ASX50 companies, going off their publicly available results.
That part of the study found more than a quarter of Australia’s largest listed companies didn’t hit their sales forecasts in 2013, and 34% experienced marginal growth rates. This suggests Australia’s largest corporations, with the largest and presumably most skilled sales teams, are also struggling with their sales.
Ian Lyall, the practice director at The Synergy Group, tells SmartCompany that on the upside, at least the results showed most sales professionals are looking at long-term strategies to enable them to hit their goals. Many were highly focused on raising the productivity of their sales teams, and making more use of the data in their business to target to the right buyers.
But the results are concerning, because there is a trade-off between high targets and high morale.
“There is a performance equation, and that comes through in the research,” Lyall says.
“Sales performance in the end is driven by a couple of different factors, and one is definitely motivation. And motivation comes, partly, from a belief that you can hit your targets. So it’s definitely counterproductive to raise targets to a point where the team doesn’t feel they’re realistic.
“Clearly, the survey results show salespeople are crying out for help.”
But many boardrooms appear to not be communicating effectively with their sales teams. While 62% said sales forecasts were reviewed monthly, 38% said they were reviewed quarterly or less often.
In the report, The Synergy Group said this was unlikely to be sufficient.
“In the current business environment, where sales leaders are pressured to perform amid challenges such as fast-changing market conditions out of an organisations control, forecasts must be regularly reviewed and targets adjusted and adapted to reflect market conditions.
“Our data suggests sales and finance departments don’t communicate enough in areas such as forecasting.”
Managing salespeople is one of the toughest jobs in business, Lyall says. That’s because sales leaders are under intense pressure to meet targets, but on the other hand, they have to keep their people motivated, focused and engaged in the business, as high turnover isn’t great for a sales team either.
This is made more difficult because sales generally has far higher turnover than most other business functions.
“There’s a certain acknowledgement that roles with commission-based compensation arrangements have a certain risk to them,” Lyall says. “You often see much higher turnover in these roles. It’s counterproductive but very hard to avoid.”
One way businesses can keep their salespeople on board is to carefully review their compensation arrangements, and regularly alter them to fit different market conditions and different business goals.
“In many cases, you find the commissions are out of balance with the expectation of performance in different conditions. So it can help to look at that.”