Targets are a prickly issue! What basis do you use to establish targets for self-employed commission-only sales agents that are fair and achievable? Target setting traditionally lies in the domain of the salaried salesforce – which most sales agents have left behind for good. Sales agents set their own agenda, and essentially cannot be told what to do. Therefore the setting of ‘targets’ may be met with something between passive agreement and total rejection. Either way, the likely net result will be that your targets are completely ignored!
Most sales agents are happy to have left behind their ‘repping’ days, with managers often breathing down their necks. Now they are self-employed, so they will want to work to the beat of their own drum, not yours. Trying to impose such management techniques is more likely to rub them up the wrong way – and therefore be counter-productive.
If you really MUST have targets, the best way to set them is by negotiation directly with each individual sales agent – take a more co-operative approach. This involves arriving at goals by getting the sales agent to suggest ‘estimates’ of what is possible and what they would like to achieve in certain timeframes. If you think these are reasonable, then you agree them, and work with the sales agent towards achieving them. Part of our pre-interview profiling procedure involves asking sales agents about their potential way in advance of this stage. At this earlier stage a sales agent might have been ‘selling himself’ to you, and possibly exaggerating the size and potential of his customer base. When it comes to agreeing goals, a savvy sales agent may have a tendency to do just the opposite! This position can be used to your advantage by leveraging more ambitious goals that might be nearer to your own requirements.
You may also find that self-employed commission-only sales reps will refuse to sign agency agreements that stipulate targets, for fear of being terminated if they are not achieved (which by the way is usually not grounds for legal termination, but sales agents may not know this).
Achievement of targets may indeed be outside the sales agents’ control. And targets may not be fair or realistic in the first place.
To sum up – targets are best avoided – especially in the early years of a sales agency.