When setting goals for your salespeople today, you may want to consider some new strategies. 

Here are the top four keys to setting goals salespeople will be motivated to hit, according to a recent Corporate Executive Board study of more than 700 organizations:

1. Connect incentives to company goals: Most managers understand the value of providing incentives that constantly raise the bar on salespeople’s performance. But the goal should also be to find ways to tie incentives to your company’s overall mission. That way salespeople aren’t just focusing on closing sales. Example: The Ritz Carlton wanted to increase customer loyalty. And to do that it started giving out additional bonuses to employees who constantly go out of their way to let guests know how much their business is appreciated. As a result, the company was rated No. 1 in PeopleMetrics’ 2009 Buyer Loyalty Survey.
2. Follow up and follow through: It’s also essential to have a system in place for following up on goals and adjusting them based on each rep’s progress. Meet with salespeople regularly to review previous goals and actual business results, and adjust those goals when necessary. During those meetings, have reps choose three specific goals they’d like to achieve and work with them to create a step-by-step plan for accomplishing each.
3. Have clear metrics in place: Even though certain goals are qualitative, there should always be an agreed upon means for measuring a salesperson’s progress. Metrics help managers pinpoint where a salesperson may be falling short, which is the first step in overcoming the problem.
4. Consistently update your approach: The business world is constantly changing, as are the incentives that motivate salespeople to go out and close more business. With that in mind, you may want to consider updating your compensation strategy so it reflects the way your business has changed (e.g., does it reward reps for closing repeat business? Does it encourage reps to push the products with the highest profit margins?). You also may want to ask salespeople what incentives they want that would motivate them to close more business. Incentives only work if they are something salespeople truly value.

Source: “Five Steps for Effective Sales Coaching,” by the staff of the Corporate Executive Board, BusinessWeek.

Can you think of any other goalsetting keys? What works for your sales organization? Let us know in the Comments Box below.

Tags: Corporate Executive Board, customer loyalty, goals, incentives, motivate, PeopleMetrics, Ritz Carlton, study