How Fast Growing Companies Create Dynamic Sales Targets
You would think that fast-growing companies would have things really dialed in from a sales performance perspective. You might think these companies have super-accurate targets that they are hitting all the time, and no ambiguity about what everyone’s goals should be. It’s not the case.
In fact, it’s quite the opposite. Fast-growing companies tend to have a really hard time setting goals for their sales reps. There are many reasons, but it generally comes down to the fact that the business is evolving and growing so quickly, that things are constantly changing.
In fast-growing companies, more market segments are being introduced all the time. Territories keep getting smaller as the number of reps grows. Reps are moving roles, getting promoted, and taking on different responsibilities. Also, new products and pricing plans are getting introduced all the time.
All of this makes it very difficult, and sometimes impossible, to set accurate targets. Quotas change all the time, but they are a necessity. Reps need to know the ultimate bookings goal. Commissions need to be paid. Setting quotas is hard enough when things are growing like crazy, and goals for the metrics that get you to the quota are almost impossible to set. That includes targets for metrics like activities, meeting generation, opportunity generation, conversion rates, ASP and close rates among many others.
Double Down on Coaching
The solution to the problem is definitely not to give up on coaching. In fact, the right move is to double down on coaching. Managing and coaching reps is critical when the business is growing quickly, since so many new reps are getting added all the time. The value of ramping reps effectively is huge when you have lots of new reps. Figuring out which ones will make it, and which will need to be top-graded is critical.
For ramped reps, getting the best possible performance out of each one has massive ROI. Data-driven sales coaching drives real results - research says that if you can do this effectively, you can drive an additional $36k - $135k per rep per year. You’ve invested the time and money in ramping them, so you’d better get peak performance.
Set Dynamic Targets
The solution is benchmarking reps against the performance of their peers, and of top performers. For instance, if you have a new class of mid-market account execs, you should be tracking the performance of each one, and comparing it against the performance of all the other reps that have the same role and ramp status.
You may not have a perfect target for how many meetings your mid-market account execs should be setting up each month. But what you can definitely do is bucket those reps into top, middle, and bottom performers, based on the number of meetings they've set. Then you can coach them accordingly to get the middle performers up to the level of top performers, and either manage the low performers up or out.
Similarly, for ramped reps, you may not know exactly how many deals they should be closing per quarter, or what the optimal ASP should be - particularly if territories are changing or new segments are being created. But what’s extremely effective is to compare ramped reps against other ramped reps that are performing at a high level.
For instance, compare the KPIs of each of your ramped reps against the benchmark from the top 10% of reps in the same role last quarter. This lets the reps having the most success be the blueprint for the rest of the team.
Lower performers are able to see exactly what they need to do in order to be a top performer themselves. This might be getting their ASP up, or it might be generating more opportunities so that they have a bigger pipeline that they can close.
Eliminate Excuses and Foster Healthy Competition
One benefit of comparing reps to top performers is that it eliminates the excuses that might come with other types of targets. When targets are set, but reps aren’t hitting them, they may challenge the target and say it was unachievable. But if you benchmark against high-performers, it creates accountability in the team because everyone can see that there are other members of the team who have been able to put up those numbers, and so they can too.
It also fosters healthy competition and puts a higher-level goal into the hands of each of your reps. Meaning, instead of a rep saying "I want to hit my opp target", they say "I want to be a top-tier performer". And then they use the benchmarks of the current top performers to build their own path to that success.
Using benchmarks and comparisons instead of targets is not reserved only for fast-growing companies. In any sales organization, comparing reps to their peers and top performers is both motivating and highly useful. It creates better accountability and performance from the team, and ultimately leads to significantly higher sales performance.
Sales Rep Scorecards can help
Rekener's Sales Rep Scorecard app is the fastest and most powerful way to give your sales managers everything they need to become great at data-driven sales coaching, including easy-to-use benchmarking of each of their reps against peers and top performers. Investing in sales coaching will generate significant improvement in your sales results. The return on investment is big.
Request a demo of Rekener's Sales Rep Scorecards application.
Start a free trial by connecting your Salesforce or HubSpot CRM account.
Read our playbook on data-driven sales coaching.
Cover image from Okta (Oct 2018).
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Greg is COO and Co-Founder at Rekener. Greg’s career has been focused on using data to grow recurring revenue businesses. Before joining Rekener, he served as VP of Operations at ZeroTurnaround, where he built its strategy and operations practice, ran its customer success and renewals function, helped to grow and coach its high-velocity sales organization, and optimize its marketing efforts. Prior to that, he ran the BizOps and marketing functions for the AVOKE call center analytics business, a SaaS company within BBN Technologies. He got his start using data to improve sales and marketing efforts while at AppNeta.
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