Do sales targets work?
In this episode we study sales targets and expose their problems. Unpack the dilemma of arbitrary figures with us, as we get into the reasons of how these numbers can warp sales strategies, leading to short-term wins but potentially jeopardise your company's future. And if you think corporate life can't be dramatic, wait till you hear our Inglourious Basterds inspired sketch that throws a spotlight on the darker side of meeting – or not meeting - those targets.
Join us as we tear down the façade of sales target setting with real-world tales. Like the time we based a sales goal on a daughter's maths homework—yes, you heard that right. It's a romp through the whimsy and folly of figures plucked from thin air, with a sobering look at how they can lead to sales tactics that damage more than just team morale. We're sharing the raw and unvarnished truth about the psychological toll and the potential for lasting harm to profitability and reputation. Through it all, we advocate for sales objectives that are grounded in reality and integrity, because in the end, what's a number without a solid foundation?
So tune in for a session that offers not just laughs, but lessons in the fine art of setting sales targets, or how to approach the subject of sales targets, that truly benefit everyone.
For more info, free resources, useful content, & our blog posts, please visit realitytraining.com.
Reality Training - Selling Certainty
Do sales targets work?
In this episode we study sales targets and expose their problems. Unpack the dilemma of arbitrary figures with us, as we get into the reasons of how these numbers can warp sales strategies, leading to short-term wins but potentially jeopardise your company's future. And if you think corporate life can't be dramatic, wait till you hear our Inglourious Basterds inspired sketch that throws a spotlight on the darker side of meeting – or not meeting - those targets.
Join us as we tear down the façade of sales target setting with real-world tales. Like the time we based a sales goal on a daughter's maths homework—yes, you heard that right. It's a romp through the whimsy and folly of figures plucked from thin air, with a sobering look at how they can lead to sales tactics that damage more than just team morale. We're sharing the raw and unvarnished truth about the psychological toll and the potential for lasting harm to profitability and reputation. Through it all, we advocate for sales objectives that are grounded in reality and integrity, because in the end, what's a number without a solid foundation?
So tune in for a session that offers not just laughs, but lessons in the fine art of setting sales targets, or how to approach the subject of sales targets, that truly benefit everyone.
For more info, free resources, useful content, & our blog posts, please visit realitytraining.com.
Reality Training - Selling Certainty
Bob and Jeremy's Conflab the Reality Podcast.
Speaker 2:Good morrow, Bobby Boy.
Speaker 1:Greetings and it's great to see you in your new booth in Buckinghamshire. You guys need to understand that Jeremy has invested not in considerable sum in a grey booth which surrounds him and goes above him in his office when he's recording, and it looks like he's sitting in a World War II German bunker waiting for the Allies to land on the Normandy beaches. You can see his little bald bonts sitting up and it looks like he's poised over the kind of useful spandau machine gun that he's about to open fire with. So it's a really enduring image and maybe regular listeners might get sent a picture of this golden moment. Well, forever.
Speaker 2:It's fair to say we haven't quite cracked how to position the sound recording equipment.
Speaker 1:No, it's interesting and actually you're speaking into your round thing. The round thing is at an angle from the microphone, so please make sure that it's absolutely in line. That's better.
Speaker 2:So we're not sure of the sound quality, so we're going to go for it though.
Speaker 1:I think it sounds okay. So we are going to do a podcast today about targeting. Now, targeting was a subject we did in one of our first podcasts, all about the fact that targeting, in our view, doesn't serve much purpose in the modern world, because targets are, first of all, an objective, a dream, an educated guess at best, and they affect sales behaviors more than anything else, because if you have a target to hit, you're going to try and hit it. And once you hit that target, there's then a series of questions to ask yourself as a salesperson, do I want to go way over the target and thus have even higher targets hit in the future? If I'm not going to hit this month, if I'm having a bad month, should I stop selling and concentrate on the next month so I have a better month? And there's lots of these sorts of issues that come into our brains when we are thinking about how we manage our time, manage our energy and manage our sales.
Speaker 1:And many, many years ago we watched a film which some of you will have seen, directed by Quentin Tarantino, and it was called Inglourious Bastards, and that film is unique in that it has an opening scene that lasts about 21 minutes between two men an SS Colonel played by Christoph Valtz, and a French farmer I'm afraid I don't know the name of the actor who is his prey and they have a 20 minute conversation and we looked at that conversation about then. This was many years ago and we adapted that conversation to a sketch which has a sales director hiding orders from his superiors and this gentleman, hans Hans Lander, is sent to find out what's happened to some of these orders. Now we called that sketch at the time the Journeyman Hunter, and a journeyman, in our view, when it comes to sales and it could be a journeywoman, of course is somebody who turns it on occasionally to have a little bit of success, but a lot of the time doesn't do very much. It's actually quite lazy, and Hans Landers' job is to come into this organization and discover journeymen and also to find out where sales directors are hiding orders for the next month, because clearly that is a form of lying. You're lying to your superiors about how well or how not well you're doing, and that clearly isn't a very productive way to work.
Speaker 1:Jeremy.
Speaker 2:Well, what we'd like you to do is, rather than us talking to you and talking to each other about our thoughts on targets, we thought we'd start with this this can resonate for you and then we're going to go into a few points of things that we have seen changing as we've gone through the COVID, post-covid period and, of course, brexit. It doesn't look like targets have gone away. In fact, it looks like there's increasing insanity around them. So we're going to kick off now for this sketch. Bob is going to play the part of the journeyman hunter, sort of rooting out bad sales teams and managers, yep, and I am going to play the sales director. So he's coming into a division.
Speaker 1:And we're going to do the first preamble, which is a salesperson talking to Jeremy, who's the sales director. There's just a couple of lines there, but that sets up.
Speaker 2:Bob will play the salesperson and then he'll switch to Hans. I will I actually even have sound effective and knock at the door? Absolutely, as I open the door to Hans and the rest of my sales team have gone out. Okay.
Speaker 1:Jeremy, that's the new orders from the Dreyfus account in 50k worth.
Speaker 2:Oh, thanks, bobby. That's great news. Ah, but it's the end of the month, so we'll put it into next month's orders in the special order file. Don't want to go too far over, do we?
Speaker 1:And he puts the order under the carpet, too right. Well, time to get the hammock out for a few weeks. I'll see you in the pub.
Speaker 2:Great, I'll do a few things here.
Speaker 1:I'll see you in 10. Is this the sales department of Jeremy Blake?
Speaker 2:Yes, I'm Jeremy Blake.
Speaker 1:It's a pleasure to meet you, Mr Blake. I'm the new commercial director, Hans Lander.
Speaker 2:Oh, welcome to the company. How may I help you?
Speaker 1:I was hoping you could invite me inside your department. We may have a meeting.
Speaker 2:Of course, by all means Come in, Hans. I'm terribly sorry. The team are all out on business.
Speaker 1:That's fine. I'm sure we can cover everything together. First, please excuse my rude intrusion on your busy routine. Oh, don't be ridiculous, Hans. You're welcome. Mr Blake, the rooms I've heard about your team are true. You hit your targets with a semi-regularity that is reassuring in these difficult times.
Speaker 2:Thanks, please have a seat Would you like something to drink?
Speaker 1:Thank you. This being a sales office, one would be safe in assuming you have coffee. Yes, then black coffee is what I would like, with sugar. Very well, sir. To both your teams and your choice of coffee I say bravo, thanks. Please join me at your desk. Very well, mr Blake, I regret to inform you that I've exhausted the extent of my manners to continue to speak so inadequately but only serve to embarrass me. However, I've been led to believe you prefer totally direct communication. Yes, what just so happens, I do as well. This being your department, I ask your permission to switch to total directness for the remainder of our conversation. By all means, mr Blake, while I'm very familiar with you and your team, I've no way of knowing if you are familiar with who I am. Are you aware of my existence?
Speaker 2:Yes.
Speaker 1:This is good. Are you aware of the job I've been ordered to carry out by the CEO? Yes, please tell me what you've heard.
Speaker 2:I've heard the CEO has put you in charge of rounding up the journeyman left in the company who are either hiding orders, cheating to hit targets or simply passing for professional salespeople. The CEO couldn't have said it better himself. So the meaning of your visit, pleasant though it is, is mysterious to me. The previous sales director and a behavioural psychologist Look through my team nine months ago for hiding journeyman and found nothing.
Speaker 1:I'm aware of that. I read the report on this department but, like any enterprise, when there's new management, there's always a slight duplication of efforts, most of it being complete waste of time, but needs to be done nevertheless. I just have a few questions, mr Blake, and if you can assist me with the answers, my department can close the file on your team Now. Before the recession, there were four big client accounts managed in this area the Lovitz, the Dolorax, the Rollins and the Dreyfus'.
Speaker 2:Is that correct? To my knowledge, those were the main accounts among several hundred smaller ones. Hans, would it disturb you if I pretended to smoke my pipe? You know the smoking ban, you understand.
Speaker 1:Please, it's your department. Make yourself comfortable Now. According to these papers, all the major clients in this area have been accounted for, except the Dreyfus' Some are in the last year, it would appear, they've vanished, which leads me to the conclusion that they've either stopped buying from us or someone is very successfully hiding their orders a classic journeyman trait. So please tell me, what have you heard about the Dreyfus', Mr Blake? Only rumours. I love rumours. Facts can be so misleading where rumours, true or false, are often revealing.
Speaker 2:So, Mr Blake, what rumours have you heard regarding the Dreyfus' Again, this is just a rumour, but we heard the Dreyfus' had decided to buy from our competitors.
Speaker 1:So the rumours you've heard have been of an account that we have lost.
Speaker 2:Yes.
Speaker 1:Having never met your sales team, would you confirm for me the exact members of the team and their names? Well, there's five of them Tony, donna, bob. So, consequently, a sales director conducts a search of a department suspecting of hiding orders and supporting journeymen. Where does he look? He looks in the system, he looks in the call sheets, he looks in the hard disks, he looks everywhere. He would hide orders and evidence, but there are many places it would never occur for anyone for them to hide. However, the reason the CEO bought me off my Alps in Austria and placed me in a UK business today is because it does occur to me, because I'm aware of the tremendous feats human beings are capable of once they abandon dignity and integrity. May I fiddle with my pipe as well.
Speaker 2:Please make yourself at home.
Speaker 1:The other mistake that other sales directors make is their severe handling of the managers who give shelter and aid to the journeymen. These managers are not enemies of the company. They're simply confused people trying to make some sense out of the madness that recessions create in the majority of cases. And these managers do not need punishing, they simply need to be reminded of their duty in tough times. So let me propose a question, mr Blake, in this time of recession, what is your number one duty? Is it to fight the competitors in the name of the company to your last breath, or is it to harass the board of this company to the best of your ability? Or is your number one duty, in this time of recession, to protect those very fine people who constitute your lazy and inadequate sales team?
Speaker 1:Now my jog dictates that I must have my men enter your office and conduct a thorough search before I can officially cross your team's name off my list. And if there are any irregularities to be found, rest assured they will be. That is, unless you have something to tell me that will make the conducting of a search unnecessary. I might also add that any information that makes the performing of my duty easier will not be met with punishment. Quite the contrary, it will be met with a reward, and the reward will be nothing, providing nothing fraudulent or illegal is found, that your team will cease to be harassed in any way by me and my men for the duration of my occupation of this position. Your sheltering journeymen, are you not? Yes, you're hiding their orders underneath your carpet, aren't you? Yes, point out to me the areas where they're hiding. Ah, the draphuses, not quite the extinct account then. Not being a journeyman myself, can you explain to me the purpose of hiding this £50,000 order under your carpet?
Speaker 2:We were saving it for next month. For what reason? So we didn't go far over this month and we have our targets put up and have a mountain to climb next month.
Speaker 1:I understand so you would have produced this order next month, explained how you and your team managed to rebook the draphuses account, and the entire boardroom would have please forgive the expression stunk from your farts for a week, am I right? Yes, how long have you been a sales director? Three years. And who taught you to fudge the system in this way?
Speaker 2:We've always been like this.
Speaker 1:You've molded them into journeymen and women also.
Speaker 2:Yes.
Speaker 1:So every month, for years and years, you and your team have conspired to massage the profitability of this company and taking your salary plus bonuses home with not a single moment of guilt. I wouldn't say that. Oh what would you say? The company management Wish to make profits grow. The company employ enthusiastic and energetic people. Your actions, the actions of your team, the lazy, fraudulent and misguided way you have managed your department has made that almost impossible.
Speaker 2:Wait, Hans, please. I'm a good salesman.
Speaker 1:Correction were possibly once in the past, before you went to the dark side, before you chose the inevitability of this day, the day that you've been found out. Mr Blake, I thank you for your coffee and your hospitality. I believe our business here is done. What is going to happen? What else? We'll see you in court to recover some of the money you have received for fraudulent behaviour. That is unless you choose a different course. I bid you adieu. Well, a bit of drama for you, a bit of radio drama.
Speaker 2:A bit of radio drama from the new sound booth.
Speaker 1:Exactly so what we have here is a classic situation. Now some of you will cynics amongst you will be saying well, that doesn't really happen, does it? People don't act in this way.
Speaker 2:Well, they might not be a cynic. They might be working in a company that doesn't work like this.
Speaker 1:That would be very nice, that would be lovely, it would. Now, this is our big thing about targets. Targets change human behaviour. Just the very act of setting a target means that you are expecting your people who are going to be hitting that target to change their behaviour in some way. Now you think about that target and you go oh, to hit that target, my people need to work pretty hard, but I expect them to because I'm paying them and they will work pretty hard to hit that target and if they hit it they'll be delighted and you'll be delighted. But targets are a dream. How do you set a target, Jeremy? Tell us how you set a target.
Speaker 2:Well, my favourite is pretty, pretty good. I look at last year and I go plus 3.9%. I think that's a really sound method, don't you?
Speaker 1:Well, that's pretty sound. And how have you come to the 3.9%? Well, what?
Speaker 2:I did was I thought 10%, ludicrous 5%. Pushing it 2% is sort of inflationary. Try and really push it to just under four.
Speaker 1:I think, gives a sort of comfort fact, and so you've noticed that there's trends in your marketplace which are actually leading towards that kind of an increase as well. Yeah, is that what you've done?
Speaker 2:No, my daughter, Florence, was doing some homework. I saw 3.9 on a piece of paper and I thought that would do.
Speaker 1:Okay, now that is actually a much more scientific way than most people set targets. Most people add 5%, 10%, whack it on and off they go and there's no basis of that. And in fact some managers we know will spend weeks and weeks every year sitting down going through working at individual targets, which we think is a totally pointless exercise. It really is.
Speaker 2:We've said this before no one knows about certain world, global or nature events. No, I remember huge problems in Japan where all the ink factories went down and people couldn't travel, and I had a friend who was setting UK targets for his Japanese firm and they were all missed. Of course, I'm wondering what my main problem is with this. I think it's energy, but you're expending energy in a completely fruitless direction. Yeah, so you go to work, as John said and again wrote in his book, you go to work to cheat, you go to work to conspire, you go to work to manipulate.
Speaker 2:And it actually was thinking that it's a bit like a bunch of teenagers who've been set a school competition to sort of sell as much lemonade as possible, and what they actually do is one of the mums dries up at the very end and buys all remaining stocks and they get over the line and she pays too much for them and it's fake. How much lemonade did you produce? So we produce the same as everyone else, but you sold it for more. Yeah, we made a great profit, and when I watch the things like the Apprentice, you just think it's just energy wasted. It is so it's nuts. You're meant to be an adult doing something with integrity.
Speaker 1:Let's think about that. So if you're a salesperson with a medium level of experience, you will also know that there are some months that just don't go your way for various reasons. The big accounts that you thought were going to buy didn't, some smaller ones did, but you just didn't get the momentum that you had expected for that month. Now that doesn't mean you're a bad salesperson. It doesn't mean that you haven't done your job. It just means that the economic reasons for a bad month were not in your favor.
Speaker 1:But rather than accept that and explain that to your managers which is the truth you rather make manipulative calls to various clients to drop your price, to tell lies, to say anything, to get them to put that placement of the order in that month. So you come close to or even scrape within a few percentage points of your target. And what that does is it gives the customer you know whatever it is. You're selling at a lower price, which means you make less money, whereas if you'd waited to the next month, they might have bought from you at a higher price, which means you would have made more money.
Speaker 2:But no, you've got a target to hit, so you'll subject your profitability just to do that, and the point Bob's making was, in the timeframe of the window of you not being a success, you've compounded that by deciding to sell your products or services at a lower price To hit the target, which means the higher ups, who either own this company, have a stake in this company or at least have a position that calls them a director, are allowing integrity to fly out of the window when some of them, possibly when they wake up in the morning, think that they are doing a wonderful thing with a wonderful product in a great company with tremendous heritage or in a brilliant startup that's going to change the world, and so you get the opposite effect of your insistence of reaching a number within a fixed time period.
Speaker 2:Reality Training was created in 2001 by Bob and Jeremy, both actors you met at drama school. Reality delivers training that is effective, memorable and entertaining, with a touch of theatricality to bring it to life. We now have a company of trainers, actors and coaches who you can work with to create change programs across your business. Please contact us via realitytrainingcom.
Speaker 1:Now I'll give you an example of this. I started a sales job in the middle of a month and I started, let's say, on the 15th of a month and my sales manager at that point said to me don't worry about this month, bob, just imagine that you've got six weeks to work on next month. Okay, so he's already telling me to forget about selling for the month. I was in for two weeks Now. I might not have sold very much, but I probably would have sold something. But that immediately puts into my brain If it's looking bad, just concentrate on the next month that's coming. It's such an easy thing to think, but actually what that means is your energy is Jeremy's talking about focuses further away, and that completely damages the potential of the month that you're in. And other people are hearing that and some of those people sitting there are going well, I'm having a terrible month anyway. This is awful. I'm going to concentrate on the next month too, and so you're manipulating figures all the time rather than just concentrating on selling to customers.
Speaker 2:Yeah, I mean, years ago you'd been doing it manually in a paper book or a sort of hardback file. Now people are staring at their screens for hours a day pulling numbers out of spreadsheets, changing the formulas to make them add up. Yeah, Actually going to work to do that, rather than spending the energy going you know what. Let's just talk to some new customers who we've never spoken to before. Yeah, let's just design some really good educational material. Let's just talk about getting a new idea. It's phenomenal. I think it's the expense of incorrect effort, which is just a kind of a form of professional commercial insanity.
Speaker 1:Now let's take this to very, very large organizations that we know. Some of them will look at their figures two to three weeks in through whatever their period is it's generally a month or a quarter and then, as they approach the end of that, they'll then say right, guys, we're introducing a special promotion where we're going to discount heavily For the next week and a half, so get on to everyone and sell like mad for the next couple of weeks. And so you get on the phone and you sell like mad and you introduce a discount. So whatever you're selling, you're making less money from and you may, because of that promotion, hit your target. They go what a fantastic thing. And everyone goes out for a curry and everyone has a laugh and everyone's so relieved.
Speaker 1:But I think if you step back from that if that was your business, you'd think hang on a minute. We've managed to scrape a target. The last 50 orders were discounted heavily, which means we make less money overall. So actually have we hit target there? And also, we now move into the next month starting from scratch and we've got to build again, build new relationships, get the pipeline going again. We're not going to have that promotion initially, so that's going to be a pain, or maybe we should keep the promotion, but that means you spend a whole month selling at a discount, which means we make even less money, and so what you get is a perpetual snowball of the wrong behaviors and a lack of integrity, which is damaging, and over time, companies, especially brands, will get reputations. If you ring them at the right time of the month, you can get a discount. You can get it for less. Don't buy the beginning of the month, it'll be full price, and that is damaging long term, and so many brands have never recovered from those sorts of behaviors.
Speaker 2:Well, there used to be a thing in the car industry that the time to buy a car is on the last Saturday of the quarter and you want to walk in and look at the salesman who's the most dejected. That's who you ask to buy a car from, rather than the ones standing up having coffee swinging their keys around. They've already hit.
Speaker 1:Yeah. And then look at a car that is slightly outside your price range Absolutely and say I'd love that. I just wish I could find a way of affording that. And you just wait and see how quickly that lovely car suddenly becomes very, very affordable.
Speaker 2:So, to end on this, because we're only in the second month of 24. And some of you were into resolutions. Some of you are considering your growth, your character this year and how you're going to grow in your work capabilities and whatever. I think it's not too late to look back at this month, just take some reflection over it and think what are we doing here? What do I want to achieve personally? Now, it might have numbers on it if you're in a sales based position, because those numbers will lead to the invented targets you've been given.
Speaker 2:But you can decide what you want to achieve based on your year, based on the type of holiday you want to try to afford or just to live within your means, or whatever that is. Take some ownership of that, rather than receiving a set of numbers to hit. That's very unmotivational. You need something more motivational, which is what do I want to do with this? Where am I going with this? And seek out organizations that have a different way of thinking. There's a few, and I think there will be more in years to come, because it isn't the only way to play the game that you're currently playing and managers, if your job is to set targets, I would treat that task with the contempt it deserves.
Speaker 1:Throw down your best guess and send it up. Do not spend hours and hours and days and days and having meetings about forecasting and reporting and targeting. It's such a waste of your time because, trust me, whatever you send up, the higher ups will look at and go, oh, we need to change that. Don't worry about it, they will set the targets anyway, so don't spend lots of time doing it. But my message for people in the boardrooms of companies if you are setting targets which are going to be manipulated by the sales managers and the sales teams who are in your hierarchy, then why are you doing that? Why are you wasting time on that?
Speaker 1:Can it be a really motivating thing to say we're now going to abandon targets for a limited period as an experiment and we're going to incentivize everyone to sell as much as they possibly can? Okay, and that's it. We'll let the market dictate what you succeed. We'll give you a percentage on everything, so there's no disincentive to stop selling and let's see what that achieves. And in our opinion, you will achieve results far better than anything you could have dreamt of which is all you're doing, when you're actually trying to set a target.
Speaker 2:I've got one more thing to say. If you are shifting position in a business and you're about to inherit something and a new conversation starts to emit towards you or someone says right, you're now in this position, what we do with the targets? We only gave you some of the information before. You're now involved in this. You've got a chance to, instead of receive that and repeat all of the wrong behaviors, to question it and go hang on a minute, what are we doing here? If you are about to, you know, change what you do and become instrumental in a number of other people, consider very carefully how you respond, take time, throw up the dice, shake it up, because actually they might just need a changemaker in there and that could be you.
Speaker 2:That says why are we doing this? Let's stop, give me a week. I want to go away and get some evidence. I want to study demand. I want to actually say to us all we don't need to keep doing this, because it affects everybody. It affects everybody. Indeed. Well, we've had a good old pointed go at one of our old friends, mr Target.
Speaker 1:and Mrs Target, thank you for tuning in One little addendum just to finish Back in the early days, jeremy, this is back in the early 2000s, when we first started. We did a simple piece to camera on YouTube which you may recall called Sales Target's Stupid, and it was one of our highest rating little films and it was even picked up by a guy who writes for Inc magazine, I think, who wrote about it as well.
Speaker 1:And even back then, people were saying yes, they're absolutely right. Actually, sales Target's are stupid, they're certainly a waste of time, and this has been a concept that's been running for a while. So our question to you is our challenge to you is how can you change the way we feel about targets and how we manage them and how we are affected by them, Because we think they could make a huge difference to your success. Ciao, see you next time. Bob and Jeremy's Conflab the reality podcast.