Setting sales goals can feel like walking a tightrope. Make the goals too high, and managers risk frustrating agents. Set the goals too low, and they jeopardize the bottom line.
“Striking a balance is very important because agents do have the choice to go wherever they want,” says Garima Shah, senior vice president of indirect sales at Century Payments, a payment processor based in Frisco, Texas. “They can write business with us one week but go elsewhere the next.”
Indeed, a host of variables can shape strong sales goals, from industry trends and a sales force’s past performance to each agent’s experience and capabilities. Moreover, no two agents are alike, and individual salespeople vary in terms of what motivators, compensation and incentives work best for them.
Companies base goals on trends and past performance, Shah says. “Some companies set overall goals, but it doesn’t really drive one type of behavior or another,” he says. “Figure out what the goals should be, measure them against past performance and make sure they are in fact realistic.”
Derrick Hess knows that come holiday season and tax time, sales numbers are likely to take a plunge.
The busy nature of those times of the year is almost guaranteed to put a damper on the number of merchant accounts that are signed, says Hess, national sales manager for Payment Processing Technologies, also known as PayProTec, a payment-processing ISO based in Warsaw, Ind. But because he has followed that sales trend for years, Hess knows to plan ahead for it when setting goals by dangling a carrot in front of agents to bring in more sales.
The strategy works both ways: The agents receive something extra for doing their jobs, and the slower season becomes stronger for both the reps and the company, Hess says.
“We want our partners to understand their overall value to our organization, and reminding them often with special promotions is key,” he says, noting this past December was one of the ISO’s best months because of the motivation and incentive programs put in place for the holidays. For example, for every new merchant signed, the agent received 100 free leads.
Trend spotting is a key strategy ISOs say they use when setting sales goals.
At Century Payments, managers track trends for the industry, the company and the individual agent, Shah says. That might mean looking at each agent’s average sales and account signings, and then asking them to increase whichever average is lacking by 5%.
Sales managers consider a litany of factors when calculating sales goals. For Century Payments, that includes the number of accounts per month, average revenue earned, total transactions, average sales volume and types of businesses.
Goals should be attainable, but agents also should be asked to push themselves just a little more so that they are putting in a full eight-hour day, says Joe Natoli, senior executive vice president and a director at National Processing Co., a merchant processor based in Cincinnati.
“The goals should be realistic, but they should also be designed for what is realistic for that individual,” he says.
To achieve that stretch, Hess sometimes offers his agents $50 for every deal they bring in over and above the previous month.
“I’d rather have 10 small merchants than one merchant that equals all of those because of attrition–safety in numbers,” he says.
But basing goals strictly on the company’s budget needs can be a mistake.
“Obviously you have to manage your business based on being efficient, successful and growing. But it’s unrealistic to say a company needs a certain number of merchants and you have to raise the goal of the salespeople to meet that,” Natoli says.
A better approach is to see what top producers are bringing in versus what middle producers are signing and achieve a happy medium, he says.
Pitching A Product
The challenge for the business owner or manager comes in how to fill the gap of a shortfall. That could be done through a number of strategies, including tapping a vertical market, creating a lead-generation system for agents or hiring more salespeople, or a combination of all three, Natoli says.
Products tailored to a specific merchant type can serve as an agent’s entree into a sale. Often those products are geared toward a set group, such as retail, restaurants or medical.
The tactic helps agents go into a business and almost immediately know what to pitch, Hess says. Instead of walking into a restaurant and immediately pitching them on credit card processors, agents can use a specialized product, such as text advertising, as their way in with a merchant.
“Then say, ‘By the way, we can reduce your costs for this text-advertising program if you give us an opportunity to work with you on credit card processing,’” he says.
Hess instructs agents to always sit with merchants and go through the list of products PayProTec offers before leaving the pitch.
“They don’t know you have this product until you tell them,” Hess says. “If you don’t ask, you’ll never get it.”
Understanding a merchant’s individual needs dictates the types of product recommendations an agent should make, says Scott Avery, senior vice president of sales for Federated Payments, an ISO based in Melville, N.Y.
Experience levels can dictate whether an agent is motivated by a fast, fat check. Newer agents tend to be lured by high commissions, whereas experienced agents may not be motivated as much by up-front money; they are more likely to have established clients that provide residuals, so they may want higher residual splits, ISOs say.
“You have hungry individuals out there; then you have guys who are just not hungry. You can’t manage each guy the same way,” Avery says.
Agents new to payments processing may face a steep learning curve. Becoming an agent does not require much monetary investment, yet the industry is full of nuances, Natoli says.
“To really be able to compete against an experienced sales rep who knows the business, I don’t think it’s realistic to expect the same percentage of success from a newbie than from an experienced person,” he says.
Determining how to compensate agents of varying experience levels can be a challenge, Natoli says. For some salespeople, the more they earn, the more motivated they are. Others may find a comfort zone once they have a regular stream of residuals and may not work as hard once they reach that level.
Hess offers a quick start bonus for new agents. If they sign 30 deals in 90 days, they receive a $3,000 bonus. That is in addition to the agents’ residuals and up-front bonuses. “That’s 10 deals a month, so it’s very attainable,” he says.
Gauging Motivation
Some managers believe there are two types of sellers: those who are self-motivated, and those who need outside motivation. Finding the balance between tapping into internal motivation and coaxing those agents can be the challenge.
“There are ‘rah rah’ salespeople who need constant morning meetings and ‘Let’s get up and go get ‘em’-type motivation. Then there are the people who just inherently know they need to get out there and make money to provide for their family, and they’re motivated internally,” Hess says. “Like water dripping on a rock, the activity generated on a consistent basis will produce results.”
One motivator ISOs say almost always works is money. Different types of sales incentives and promotions can motivate a seller.
“It all comes down to money,” Hess says. “The more you throw out there, the more they’re going to try to achieve it.”
What motivates reps even more than money is guidance, Hess says. He believes being available when his agents need advice on a sale is what has kept some of them from doing business with another ISO.
“I may have 100 e-mails, but I can still take the time to listen to agents. That’s the motivation that works–to have someone so they feel they’re not totally alone in this industry, which is a bunch of independent contractors.”
Time management is critically important when it comes to setting goals, Natoli says.
Importantly, each salesperson should identify goals for the year and then break down that objective by quarter, month, week, day and even the hour. Not breaking down the goals can tempt agents into believing they always can make up for a shortfall, even if doing so is not realistic, Natoli says.
“So if the objective was to write three to five new merchants a week but they fall a little short, they think the next week they’ll work a little harder and make it up. That never works. There are 24 hours in a day; you can’t make 25,” he says.
In breaking down their day into hourly goals, agents can determine how much time they should spend selling versus prospecting new merchants, Natoli says.
“When a salesperson looks at their job, they should look at it in those categories so it’s not this big monster of, ‘I need to write 500 new (sales) this year; how do I do it?’”
ISOs should factor in the type of selling they are doing and who they are selling to, when mapping out a sales strategy. “You don’t sell an auto mechanic the same way you sell the guy who has a nice website,” Avery says.
He points to the differences between his Canadian and U.S. divisions. The U.S. side tends to be a much more competitive market, and agents have to compensate for that. Because the market is less competitive in Canada, the sales cycle is much longer and calls for more relationship-building.
In the U.S., agents are trained to push for a one-call close, which occurs 70% of the time compared with 30% in Canada, where there are fewer than a dozen competitors, Avery says.
The same goes for the type of business receiving the pitch. An agent would not walk into a doctor’s office and try to start pitching the receptionist on his company’s services, Hess says. However, that strategy might work when selling to a smaller merchant, where an agent can walk in with a flier and pitch to the owner on the spot.
“My strategy will differ based on the size of the merchant and how they conduct business,” Hess says. “If everyone’s wearing a suit and tie, you don’t want to walk in wearing blue jeans and a polo.”
With so many factors to consider, sales managers face a daunting task in setting goals. Transparency and a well-thought-out vision play a large role in making sure agents succeed in achieving those goals.
“The most-important thing overall is making sure you have a clear plan as an organization, and you drive sales goals from that plan,” Shah says. “Then customize those goals to your individual salespeople.”
The key is making sure salespeople are getting the results intended, Shah says. For instance, if the goal is to promote a certain selling behavior or to get agents to sign more accounts, the salespeople should not forgo other important tasks, such as making sure they drive reliable revenues, in the process of achieving that goal.
If those results are lacking, managers might find it is time to hit the reset button and revisit their strategy
