When setting sales goals for your retail employees — or for any employee, really — there are usually two things to keep in mind: Those goals need to be realistic and clearly defined.
But I urge you to think of a third aspect — motivation.
What drives your retail employees to achieve the goals you set for them?
I’ve been leading sales teams since 2014, and believe me when I say I’ve seen a few things. In this article, I’ll walk you through my step-by-step process of setting goals for sales reps — with a special focus on retail employees and the power of sales incentives and gamification.
Step 1: Set a SMART goal structure
The SMART goal system is a classic for a reason — it creates tangible KPIs that can be easily measured. Here are the principles:
- S – Specific: The sales goal has to be clearly defined and detailed. “Improve sales numbers” is not specific. “Convert 80% of visitors to customers” is.
- M – Measurable: What’s the exact number you’re aiming for? Make sure it’s something you can measure (for example, increase revenue by $50K, close 30 new deals, etc.)
- A – Achievable: Given your historical data, current market trends, and your resources, your team can realistically achieve this goal.
- R – Relevant: This goal is in alignment with your company’s mission broadly, and your employee’s job specifically. (For example, “Decrease warehouse safety incidents” shouldn’t be assigned to your front-line sellers.)
- T – Time-bound: This goal has a deadline or structured timeline (e.g. monthly goals, quarterly goals, annual goals, etc.).
As a methodology, it’s hard to argue with. Set concrete, measurable goals (that are achievable and relevant for your team), and give yourself a specific timeframe to check your success. Boom, boom, and boom.
Step 2: Research and set target goals
Now, it’s time to do your research and set actual targets and KPIs. To do that, you’ll need to analyze:
- Historical sales data. Look at your past several years of sales (quarter over quarter to account for seasonality). This will help you determine: 1) where you are, 2) where you want to be, and 3) how achievable that ideal place is.
- Current assets. The manpower, technology, and skills available to you at this point.
- The market potential and trends. Is your industry oversaturated, or is there space to grow? How is the competition?
- Expenses. Factor in things like supplier costs, inventory storage, fulfillment, overhead, and other fixed and variable costs.
Based on this data and historical information, I set my team’s daily, weekly, monthly, quarterly, and annual goals. Here are some examples:
1. Monthly/quarterly/yearly sales goals
The first type of goal is simple — the sales number your retail employees should aim for on a monthly, quarterly, or yearly level.
Depending on the nature of your business, you can adjust these goals for the period it suits you (for example, daily or weekly goals).
Example: Sell $10,000 monthly, calculated from the first to the last day of the month.
2. Waterfall goals
The waterfall goal system entails achieving smaller milestones and slowly increasing the expectations and deliverables over time. So, instead of setting one huge target at the end of the year, you divide it into smaller chunks or milestones that sound easier to handle.
Example: Boost sales by $10K in Q2, $15K in Q3, and $25K in Q4
3. Sequence goals
This one is especially effective in retail. The sequence goal system is a way to teach your employees to prioritize goals. You give them a list of goals and targets, starting from the one with the biggest impact and highest priority, and ending with a smaller goal.
This way of setting goals in a sequence is based on priority. And works great in retail, where employees often have to wear different hats and complete different tasks.
- Monthly sales target – $5,000 (highest priority)
- 10% higher email response rate
- Maintain 99%+ customer satisfaction on all channels
4. Competitive team goals
How about some friendly competition? Set team or collective goals to create a sense of belonging in a group. If you have retail employees working two shifts, here’s your chance.
Example: First shift vs. second shift: The group that makes $10K in sales first, gets [reward or incentive].
5. Stretch goals
If you have high performers in your company, this is how you can single them out. Stretch goals entail surpassing the initial goal and testing the limits of how far you can go beyond that.
Example: The sales goal for Q4 is $50K. High-performers will get a 5% commission on all sales above that.
Step 3: Educate and empower your sales staff
This is a crucial step that you shouldn’t skip. After setting the goals, you must teach your team the best practices for achieving those targets.
Gamifying the entire educational experience can produce great results. There are many sales training games that work in terms of engaging your employees to help them understand the psychology of the sales process.
Here are some examples of sales training games:
1. Dice exercise
The dice exercise provides a unique sales lesson to its players. It implies the fact that sales are a ‘numbers’ game. The more you try, the higher the chance of you getting a sale. The game involves asking participants to roll as many sixes as possible during a specified time period.
As time in the game progresses, you will be able to see participants roll with more ‘vigor’, trying to achieve more sixes before their time ends. This provides another key lesson to participants, i.e., sales individuals should adopt the same level of enthusiasm at the start of their sales cycle – instead of panicking towards the end to achieve their sales targets.
This is a common problem for sellers: They’re relaxed at the start of a goal cycle, and double down on their efforts as the end of the cycle approaches and they get anxious about hitting their targets. That anxiety can come off as desperation, and customers can smell desperation from a mile away: Sales lost.
The winners of the dice exercise are those who roll with consistent vigor from the very beginning of the game, just as your best sellers approach every opportunity with equal enthusiasm, all cycle long.
This sales training game is a great tool for sales training sessions. After a training session is conducted, players are split into two groups and are provided resources to create questions related to the session they just attended.
The two groups will take turns asking each other the questions they’ve formulated. This engaging approach keeps players on their toes as they focus to avoid getting questions wrong. The rules of the game are simple: If one group gets an answer wrong, a part of a ‘hangman’ is drawn onto the paper provided. Once a group gives a correct answer, they are allowed to ask the other group a question.
The group that successfully ‘hangs’ the other team’s ‘man’ wins the game! This game has been proven to increase training retention amongst sales trainees and it also gives the trainer insight into what has been successfully retained.
3. “Still don’t get it”
This sales training game is perfect for teaching persistence and overcoming sellers’ shyness about approaching potential customers.
In “Still don’t get it,” your employees need to venture out into a public space (this is an ideal game for malls, shopping centers, and busy foot districts — spaces your employee can be out of your own store) and ask passersby for directions.
The employee doing the exercise starts by asking for simple directions to a business nearby. If the stranger they’ve approached helps by providing directions, the real game begins. The employee begins asking for further help and clarification — for example, to have the stranger draw a map, or look up the phone number of the business. The more ways the stranger agrees to help, the more points the employee gets.
How it works: “Still don’t get it” teaches persistence and stepping outside of your comfort zone. It helps foster a “if you don’t ask, you can’t get” mindset that’s key to helping your retail employees land sales (and upsell!) on the floor.
(If you’re interested in more games, check out our article on sales training games on the Deputy blog. We’ve also got a great one on teaching your retail employees how to build rapport with customers and maintain a relationship that will result in loyalty and repeat purchases.)
Finally, your retail employees, especially your front-liners such as cashiers or sales assistants, need to understand the product inside and out. Closing a sale will be much easier with staff that knows what they’re selling.
Step 4: Incentivize and reward
The fourth and perhaps most important step in reaching the set goals for retail employees is the sales incentive. What is in it for the employee? What will they get from meeting the target?
Think in terms of commissions, bonuses, salary boosts, gift cards, store credits, and similar. Whatever you do, define the bonus or commission structure upfront and make it known to all your employees.
To put it even more simply — it should be in everyone’s interest to bring more sales to the company. If there’s nothing in it for me, why should I work extra hard for you?
The right sales compensation plan is crucial for employee productivity in retail. But, let’s not forget about gamification as a strong sales incentive.
One example of gamifying is Pop-the-Balloon. Inflate a bunch of balloons and put pieces of paper with different prizes written on them inside each balloon. Then, set several smaller goals throughout the day, and let each employee choose a balloon to pop whenever they reach a goal. They get to keep the prize!
Some prize ideas can be a dinner for two, store credit, a $50 gift card, a weekend getaway, a salary bonus, movie tickets, gym membership, etc. Be creative!
There are many similar sales incentive games such as jar prizes, Bingo, the wheel of fortune, etc. All of them use the same concept of offering prizes for goals to keep up the level of motivation and productivity in retail.
Now that you’ve understood the different strategies you can set achievable sales goals for your retail employees, it is time to start putting them to work. Incentivizing your employees through a performance-based reward system can help boost productivity and conversions.
Set a series of actionable steps that your retail employees can take towards enhancing their overall efficiency. Simply setting goals isn’t enough, you will also need to provide support and guidance to help your employees achieve their goals.
By following the steps mentioned in this article, you will be able to nurture a committed sales team that will aim to grow alongside your business.
Edited by Kendra Fortmeyer @ Sales Hacker 2022