How does goal setting process work

The goal-setting process can be challenging, as it is a complex and collaborative process. It gets infinitely harder when you have to execute the process on spreadsheets with multiple copies of models floating around in your email. However, the Target setting process within the designers aims to make the process easier through:

  1. Single Source of Truth - everyone logs into one system and has access to the same information from one centralized location.
  2. Integrated Collaboration - Feedback is captured in one place, allowing everyone involved to see and react to changes made by others.
  3. Simplified Data Model - allows for territory planning and quota setting to be done on a standard format.

Principles behind the goal-setting process

Designing your territories and goals requires you to establish a set of key principles. These principles should serve as a guiding light on how you execute your goal-setting process. Here are some common principles that have served organizations well:

  1. Data-Driven - Make the process data-driven. Back up the targets with data showing that they are achievable. Try to eliminate any personal basis in how you set goals. Eliminate any perception of bias in the process of setting targets for sales reps.
  2. Transparency - make the process transparent to everyone involved, especially the sales reps. Provide the necessary tools for the managers to explain the process of goal-setting and the data points considered in the process.
  3. Fairness - Sales reps are more likely to accept a goal they feel is fair and achievable. Unachievable goals not based on data are likely not to be received well, especially if there is perceived bias.
  4. Policy-Driven but Flexible - Changing market conditions and a whole host of practical situations require quotas to be changed and quota credits to be applied. These are essential tools at the disposal of any sales team to maintain fairness and to reward high-performing individuals. But it's important to make these situations as policy-driven as possible. Document the policy and the process around how changes to a territory, quota, and credits will be applied. Allow the reps to have the means to challenge the process, followed by high-level sales leadership engagement.
  5. Customer Focused Design - make sure your process and policy encourage the best behavior by your reps that lead to the best outcome for the customer. Goals and targets have a significant impact on sales rep morale and sales rep behavior. Setting targets incorrectly can lead to sales behavior that can result in poor customer satisfaction.

Define these principles and communicate them widely to the teams involved in the goal-setting process, including sales reps and account executives.

How to implement goals

  1. Goal Setting & Forecasting - successful goal setting requires an in-depth analysis of the scenario being used to set the targets. Forecasting plays a vital role in determining the goals being set. Topline goals are usually based on financial objectives for the planning period. The company's corporate finance teams typically establish them.
  2. Top-Down Distribution - once the top-line targets are known, planners can then focus on the process of distributing targets and the various factors to be considered in breaking down the top-line targets by territory, teams, products, etc.
  3. Bottom-Up Feedback - involve the people that will be responsible for carrying the targets to help provide bottom-up feedback and ensure achievable targets. Remember that territory planning and quota settings are related, and there is a lot of information that reps and frontline managers have that is crucial to achieving targets.
  4. Communicate - Lock in the targets and communicate them to the sales reps once the Top-down and Bottom-Up process has been completed. This process conveys all the crucial factors and data to the sales rep.
  5. Adjust - Adjustments are inevitable, and are based on changing conditions and feedback from the market and sales team. Adjust in a way that is policy-driven. Remember that the territory design has a lot to do with how quotas are assigned and achieved. Allow for a policy-driven method to handle changes within a territory, as they directly impact quota.

Impact of Data Quality

Data quality in your territories will have an impact on your ability to build viable territories and also to calculate potential, total addressable market, or any other such metric that may be used to set goals. Therefore, provide a way to re-evaluate goals when significant data quality-based impacts are detected and corrected.

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