Tip # 2 - Create Sales Quotas

Establish monthly and yearly sales quotas for each salesperson and involve them in the process. Complacency and mediocrity can sabotage the profitability of any business. A critical habit of an owner is to attend to the productivity of his sales team. Inherent in that habit is the requirement of the owner to occasionally turn up the heat or tension in his organization. Without tension an organization can languish in mediocrity. Productivity and profitability then suffer.

The first step in attending to productivity is to establish clear expectations for each sales associate. Unclear expectations has shown to, time and time again, be the number one cause of failure in the workplace. Besides performance standards, which we will address in another tip, each member of the sales team needs monthly and yearly sales and margin quotas. These quotas or goals subtly create tension in the mind of each individual. That tension stimulates action. Research has shown that quotas alone can increase productivity as much as 27%. Could you use a 27% increase in sales?

These quotas or expectations are given to each member of the sales team even before they are hired. As they develop in their new job, they feel the expectation, in the form of tension, to produce. They, then, force themselves to practice, to learn and to take action that may be uncomfortable for them. Many sales people find it uncomfortable to close, to overcome objections, to ask for referrals, or to be persistent. The quota creates tension to take those sometime uncomfortable actions.

However, better than quotas, if individual salespeople create their own personal quotas or goals, productivity improves over those who just had their goals imposed on them by their sales managers. Personal goals have shown to increase productivity upwards to as much as 33%. In our consulting practice, we recommend that you meet regularly with each of your sales people to discuss their goals and their performance. Then together, their goals and expectations are agreed upon and established. These discussions of performance can have a powerful affect on productivity. Can you afford not to have expectations, clarify them and come to consensus with your salespeople? This is a best practice.

Thanks for reading.

Sam Allman

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