Setting Sales Goals in Uncertain Times (Sales Series, Part 6)
On the go? Check out the audio version of this blog post below, or by searching for skucast wherever you listen to your podcasts.
Now is the time to set your intention for 2021.
Yes, the future is as unpredictable as a presidential election.
And yes, sales forecasting these days feels like you’re lost in a blizzard trying to find your car keys.
But when the chips are down, when the economy is limping along, and when your team is exhausted by overwhelming uncertainty, there is no better way to regain your equilibrium and find your focus than by rallying around a shared goal.
And let’s be honest, it’s pretty damn easy to set sales goals when the economy is roaring. Nailing projections when sales growth is certain does not make you a sales-whisperer, it just makes you a poker player with a winning hand.
When the market is UNSTABLE, when the odds are against you, that is when you and your team need goals the most.
I chatted with Michael Wolaver, Captain at Magellan Promotions, a Milwaukee-based distributor whose previous career consisted of working for Fortune 500 company Danaher, a $17 billion dollar enterprise, where he learned about the importance of setting and tracking goals to quantify success. Michael brought that goal-setting discipline along with him when he formed Magellan Promotions, and for the last ten years Michael and his team achieved 25% year-over-year growth. Michael’s advice? Three keys:
1 > Ignore the Averages: Set Goals Against Your Best Self
When Covid hit and the market collapsed, Michael and his team knew they had to regroup. Setting goals was such a driving force behind their past success that he knew they couldn’t just abandon goal setting. But the question remained: How do we set goals when the market has been decimated? One thing Michael knew, based on his experience, was that goals were imperative for maintaining and driving morale. So they stepped back from the fray for a moment and thought let’s consider all our assets, assess our strengths, factor in the positives about our business and our place in the market, consider our specific customers, and really challenge ourselves this year by not abandoning goals but setting new ones.
Michael reflected, “If you set a 30% goal and you only hit 20% growth (other than the fact that you’re a little disappointed) you still achieved 20% growth. Nothing negative happened, all positive. The purpose of the goal is to give us something to strive toward and rally around, and this is what goal setting helps you achieve, not just a finish line, but it creates concrete objectives and an emotional, stabilizing force for you and your team. Particularly for your team.”
So at first, they set a low goal compared to previous goals, a goal aimed specifically at keeping morale high and momentum moving. But they didn’t settle there. As they hit their weekly goals, they kept setting new, higher goals to push themselves to the next level. In other words: long-term goals are and should be adjustable, particularly during a fluid and uncertain market.
Consider Michael’s advice through the lens of an analogy: Can you imagine taking your team on a long journey without telling them where they’re going? Without sales goals, you essentially tell them to “show up, work your ass off, and we’ll get there, just trust me.” And when -not if- you take the wrong path and have to backtrack, -like what happens when the economy dips or you lose a major client- your goals are like a map and a compass: they help reorient everyone toward the destination, they are one of the most stabilizing forces in an uncertain sales environment. Without your goals, your map, you’re lost. And about one-third of the way through the journey, frustration sets in for your team, and about half-way through the journey, resentment creeps in, morale plummets. It’s exactly how and why people quit: When they feel like they’re working in circles and getting nowhere. When they feel like their work is worthless.
When Covid hit, most distributors simply quit setting goals. Which, in light of the catastrophic implications, was certainly understandable - for a time. With a glint of hope in sight about vaccines for Covid and a new year arriving quickly, it’s time to reclaim those solid business practices that we abandoned and get back into the business of growing our business.
Plus, the reality is, some distributors' businesses actually grew during the pandemic (and I don’t mean just PPE sales). We are all in the same business but we are not all the same. We serve different clients, different verticals, we have unique specialties and services. And because of this:
We must be careful not to heed the voice of averages
The headlines are full of businesses shuttering, restaurants closing, and even in our own industry, the precipitous drop creates a maelstrom of helplessness. Even now, as cases are climbing to alarming heights, the news will take on a decidedly dark tone again, particularly through winter and the ambiguity still around politics, but sometimes our business becomes the victim of the echo chambers we create.
The friendliness of our industry, the closeness, the camaraderie, it’s an amazing support in a downturn, but it can backfire if everyone thinks they’re drowning. And you know what they say about trying to help a drowning man, in all their flailing about and struggling to survive, you can’t let them pull you down with them. We’ve seen this happen in our industry with margins. When industry reports suggest the average margin in our industry is 32%, guess what happens to the insecure salesperson who is commanding 40% margins or higher? They begin to question their quotes. They lose confidence simply because of an average statistic.
Margin. Sales. Growth. It’s all an attitude. Yes, there are market forces at play, but that shouldn’t throw out years of best-practice planning. Don’t set goals against the average nor against your biggest competitor, set your goals against your best self.
2> Find Your Goldilocks Goals
Admittedly, finding a number that works for you and your team is the biggest challenge. Michael’s second tip? Think: Goldilocks and the Three Bears and aim for Goldilock goals. Goals that aren’t too hot, nor too cold, but goals that are juusssst right.
When you set a goal, it obviously can’t be outrageous. If you’re at $2 million and next year you want to be at $10 million, that’s not a reasonable goal. Michael and his team had a proven track record of 25%, year-over-year growth, so they had some history working toward tough goals in difficult years. “An impossible goal is too hot and therefore discouraging to your team,” Michael said, “if it’s too cold -too easy to hit- it’s a meaningless goal. What you want is a goal that is slightly uncomfortable, where you feel like you’re pushing yourself.”
Be sure you set Goldilocks Goals that are just right for you, your strengths, your team and most importantly, your market. Finding that right number is the hardest part but it’s worth working toward. “Sales forecasting is hard work only because it takes time to stop and focus, but it’s important for planning,” said Nate Bailey, founder of Ideation, who shared his thoughts on forecasting in a skucast episode. “We break it down by customer. We look at every month by customer, to gain an understanding of what it is that we’ve done and where we need to grow. For example, if you had a $250,000 customer that had a rebrand, you’d better not count on that same revenue for your growth for the upcoming year, you need to figure out where you’re going to make up for that loss in sales.”
Nate’s advice is perfect for a struggling economy as Forrester Research claimed there are four critical planning considerations for sales enablement leaders in 2021, and first two points are, arming yourself with data and metrics, and the second is talking to customers. Forester suggests looking at the top sales accounts from your 3rd quarter of 2020 and if you see different ones from last year, it’s possible those “new high performers have learned to thrive in the current environment. As sales leaders, we are responsible for figuring out what they are doing differently, document it, and institutionalize it.”
But there’s still a richer secret to goal setting and it’s the magic in Michael’s third idea ….
3> The Magic Mojo
One challenge every employer has is ensuring everyone knows and feels that what they do for the organization matters. “What I didn’t like about working for a larger company is feeling like my work didn’t matter to the overall success of the organization,” said Michael. “You feel like you're just such a small cog because you can’t map your day to-to-day tasks to any sort of big-picture progress.”
Setting a big number as a goal in a one-time annual planning meeting, and thinking it will stick is like writing your goals in sand. It looks pretty for a moment but it’s soon gone, and moreover, it’s not doing anything to motivate your team on a daily basis because out-of-sight really does mean out-of-mind. Because that number will get buried by the thousand urgent deadlines over the next year.
Michael’s secret?
Track sales goals on a weekly and even daily basis. Michael said, “I talked with a very large distributor who once advised me not to track goals weekly or daily but rather, track them monthly. That was one piece of advice I ended up simply ignoring,”
It was wise of Michael to ignore the echo chamber and create a system that would work for his team and his goals. Moreover, now more than ever, tracking daily and weekly goals is crucial in a down economy. Monthly and quarterly sales goals are rear-window numbers, past history. They can give you an idea as to where the business is heading in a general sense but they can’t give you a day-by-day, week-by-week outlook. And as we all know, the world is radically changing at a speed never before experienced, so your most recent sales history is the most reliable pulse for progress.
At Magellan, Michael and his team track daily and weekly sales and they have a Slack channel specifically for their goals, they use it to celebrate daily wins, or when the weekly goal has been hit. “Since we’re all remote, we’re unable to celebrate in-person, but we still need to be able to have some positive interaction around goals and stay fired up.”
And because they physically see it every day and every week, it’s apparent whether they are hitting their daily, weekly goals. It makes goal setting interactive and fun and inspires the right kind of conversation, like: “Hey, do we have projects coming in? We’re close to our goal, what else can we bring in?”
Moreover, Mike and the team set quarterly goals in a fun and creative way by creating a theme. For example, take the 4th quarter that we’re in now. Mike and his team had continually increased their weekly goals this year and finally got to the point to where now, their new goal for 4th quarter is 90% of 2019’s Q4 sales. Mike said, “Since our company name is Magellan (after the famed explorer Ferdinand Magellan) our designer found an image of him and decked him out in an unbuttoned flannel with a Nirvana t-shirt and the number “90%!” emblazoned on the front. If we hit the goal, we’re having a 90’s theme party.”
I asked Michael if he had any final words of wisdom and he shared the most important part about all of this, particularly for our always-on, deadline-driven, future-worrying industry:
“The final thing I want to mention is to encourage everyone to pause and celebrate the wins more. It’s so easy to get caught up in industry thinking we had a good week but next week’s going to be hard. Take the time to celebrate the wins, it’s a hard business and a long journey, when you hit a goal, do something fun.
Thanks to Michael Wolaver (and his team!) for sharing their experience with the community!
Additional resources:
For a few more ideas on how to do goal setting with individuals and as a team, check out our Whiteboard Wednesday video on How to Set Sales Goals.
Goal setting is a worthless strategy if you don’t implement it with tactics, to help you figure out your next steps and create your own account action plan, check out: The Only Marketing Strategy You Need to Supercharge Your Sales and This is What Happens When Your Sales and Marketing Strategy are Synched.