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You Need to Know This About Setting Sales Goals [New Research]

Most sellers have a quota, or a sales performance target, that is set by the sales leaders at their organization.

When it comes to setting these sales goals, there are two general philosophies organizations tend to take:

  1. Set low goals, with the expectation that most sellers will meet their quota, resulting in a positive psychological and cultural effect.

  2. Set more challenging goals, expecting sellers might not hit them, but due to the Pygmalion Effect, they will achieve better results overall.

The core message of the Pygmalion Effect is that, once an expectation is set, people tend to act in ways that are consistent with that expectation—the greater the expectation, the greater sellers will perform.

Which philosophy makes the most sense? Which is more likely to drive not only sales goal achievement, but higher revenue?

To find out, the RAIN Group Center for Sales Research launched our Top-Performing Sales Organization Benchmark study and collected information from 472 sellers and sales executives on this topic. We wanted to know three things: how challenging their sales goals are, whether or not they believe they are achievable, and if their sales team meets their goals.

We separated the 472 respondents into 3 groups based on a number of factors related to overall sales results—Elite Performers, Top Performers, and The Rest. Of course, we were looking to see which sales quota philosophy each group would subscribe to.

As it turns out, the differences in sales goal-setting and achievement are surprising.

settinggoals-charts1.png

100% of Elite and Top Performers meet their sales goals, compared to only half of The Rest. At the same time, Elite and Top Performers are also more likely to set challenging targets. They’re shooting higher and still achieving.

It looks like the Pygmalion Effect rings true in sales—the data proves that sellers are compelled to reach higher goals, even if they seem less realistic.

So if you’re wondering which sales goal setting philosophy you should use to set seller expectations, consider doing what the Top Performers do and aim high.

Additional Reading
[New Research] Benchmark Report on Top Performance in Strategic Account Management

When we studied strategic account management in 2012, 59% of sales leaders believed there was greater than 25% revenue growth potential in their existing accounts.

In a separate, more recent research initiative, we found that the #1 priority for sales leaders in the year ahead is to increase business with existing accounts. We also discovered that Top Performers are nearly 2x more likely to be effective at maximizing sales to their existing accounts.

5 Essentials for Managing Your Sales Organization’s Talent

Attracting and retaining top sales talent is a huge challenge for many companies.

If you want to take your sales results to the next level, your organization must have the right people in the right roles, performing at a high level day in and day out. You also need the right management team with an effective process in place to ensure this all happens.

How to Maximize Prices and Improve Margins

With increased product and service commoditization, sellers in almost every industry complain about price pressure and shrinking margins.

At the same time, there are some sellers and sales organizations who are consistently winning sales against lower-priced competitors and growing their margins.

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