Retail Sales Management Tip: Is it Time to Rethink Sales Quotas?

Stop using sales quotas?  Can you be reading this correctly?  After all, quotas have been part of the retail selling landscape since time immemorial.  But if your retail sales organization is struggling to achieve desired results or to grow year-over-year, it may be time for you to re-evaluate your sales management program while considering a new way to achieve your goals.

Eliminating a “tried and true” method may seem like radical surgery, but through our retail consulting practice, we have found that a new approach is just what is called for when a business is failing to grow. 

Why Quotas May Not Make Sense

Often, the use of top-down sales quotas can actually limit retail sales productivity.  It may even produce a backlash effect.  Quotas are dangerous when any of the following circumstances may be present:

If the quota is perceived to be unrealistic or unattainable by the sales team, it can become a non-factor in their daily thinking and thus rendered useless.

  1. When the sales quota is lower than what the retail sales rep is capable of achieving.  If they have exceeded that level of sales in prior months, or weeks then the quota become irrelevant.  In fact, it may actually serve as non-motivating factor!

  2. When the sales quota is simply delivered on a piece of paper, spreadsheet, scorecard, or whiteboard.  Quotas – or even better, goals – should be established mutually through a coaching and sales management process.

  3. When the quota doesn’t account for the potential of the individual, store, locations, ore territory.  Whether it is due to location, nearby competition, foot traffic or other factors, we know that some stores are more equal than others.  The same goes for new vs. tenured sales representatives.

The truth is that retail sales quotas often encourage mediocre results.  Since they tend to define the minimum standards of productivity, they fail to encourage retail sales associates to grow and improve on their past performance.  The result is that retail sales managers who rely on top-down quota management often find themselves actually congratulating sales reps for underachievement. 

This happens because once a sales representative attains quota their natural tendency is to slow down.  Meanwhile the retail sales manager finds themselves recognizing a team member for achieving quota when they may actually have been able to sell (and have sold) 10, 20, 30, or even 50% more!

A Better Approach to Sales Management

In our retail management training programs we focus on helping sales leaders learn how to coach their team members to grow their results (and their pay) month-over-month and year-over-year.  We call our retail sales management program the “Top Check” process.  It involves focusing on:

If you would like to learn more about the Top Check Sales Management System or our retail sales training courses, feel free to contact us for a free one-hour consultation and needs assessment!

 

–          David Goodwin is the Principal of the Retail Advocacy Group.  As a 30 year veteran of the retail industry he operated hundreds of retail locations, launched his own retail businesses, and managed retail channels on behalf of Fortune 50 companies.  Retail Advocacy group offers consulting services for retailers and also offers retail training solutions through its Retail Training Service subsidiary.   You can learn more about instructor-led, e-learning, and other retail training programs at www.retailertrainingservices.com.