The Behavioral Economics of Setting Sales Goals

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Successful sales goal setters are different from the rest – they achieve more than those who don’t set goals properly. In our experience, designing incentive programs and setting goals using the principles of behavioral economics will increase the rate of achievement and improve overall performance.

Encourage your sales force to follow these
seven goal-setting best practices to boost their achievement rates.

http://www.biworldwide.com/white-papers/behavioral-economics/goal-setting-and-behavioral-economics

Published in: Sales, Business

The Behavioral Economics of Setting Sales Goals

  1. Behavioral Economics and successful goal setting Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential
  2. Successful goal setters are different from the rest – they achieve more than those who don’t set goals properly. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential
  3. Designing incentive programs and setting goals using the principles of behavioral economics will increase the rate of achievement and improve overall performance. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential
  4. Encourage your sales force to follow these seven goal-setting best practices to boost achievement rates. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential
  5. { Idiosyncratic Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential fit one
  6. { Idiosyncratic By personalizing your goal, a higher value is put on it and you’re more likely to achieve it. goal make it your Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential own fit one
  7. { ReLEVancy Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential ofgoal two
  8. { ReLEVancy Stretch goals challenge people to go beyond their comfort zone and accomplish something they weren’t certain they could do. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential ofgoal two stretch yourself with an achievable goal
  9. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential { Goals loom larger Effect three
  10. { Goals loom larger Effect A deadline will help prioritize goals that are set. It’s okay to be on track but not achieve your goal in the time that you budgeted as long as you don’t give up on the goal altogether. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential three givedeadline yourself a
  11. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential { Memory Bias four
  12. { Memory Bias Since your brain forgets 70% of what happened yesterday, reminders are important! Your brain will engage functions that help you plan when you sit down and begin writing your goals. write downgoal your Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential BIGor small, four
  13. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential { Hedonic Treadmill five
  14. { Hedonic Treadmill Create specific milestones to monitor proximity to your goal. Your brain will do this automatically if you just give it a chance. Planon how to Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential make a achieve it five
  15. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential Goal Gradient theory { six
  16. A fast start leads to greater success and knowing your status along the way generates higher achievement. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential Goal Gradient theory { six Track your progress
  17. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential { Extrinsic Motivation seven
  18. Determine a reward early so you can focus on it as you approach the goal. The reward will act as a sweetener to your victory and a deterrent to giving up. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential { Extrinsic Motivation seven Once achieved REWARD yourself
  19. GOAL stretch { two yoursel f with an achievable Stretch goals challenge you to go beyond your comfort zone and you will find it to be especially rewarding when you accomplish something you weren’t certain you could originally do. It’s easier than you think – over half of our GoalQuest® incentive program participants exceed their baseline performance by achieving a stretch goal. goal setters are different from the rest – they achieve more than those who don’t set goals properly. In our experience, designing incentive programs and setting goals using the principles of behavioral economics will increase the rate of achievement { DEADLINE give and improve overall performance. yourself a three Encourage your sales force to follow these seven goal-setting there best Without practices committing is no sense of to to boost a deadline, urgency and their no achievement rates. measure of how to budget our time. A deadline will help you prioritize GOAL make it your and without them, goals you set are useless. Also, it’s okay to be on track IDIOSYNCRATIC FIT { but not achieve your goal in the time you budgeted as long as you don’t give up on the goal altogether. { four BIG or write downSMALL, your GOAL GOA L stretch { Writing down your goal helps you RELEVANCYof G OA L reaffirm and remember the goal. Since your brain forgets 70% of what happened yesterday, reminders are important! Also, your brain will engage functions that help you plan when you sit down and begin writing. make a PLAN ON HOW TO achieve it { Create specific milestones to monitor proximity to your goal. five No one runs a marathon without first setting milestones for training, 5K’s and half marathons. Your brain Goals loom larger EFFECT { will do this automatically if you just give it a chance. six TRACK YO U R progress Researchers tell us that a fast start { leads to greater success and that knowing how well you’re doing along Successful own the way generates higher achievement, too. Tracking should be relevant to the size and scope of your goal. Those who get off to a fast start in MEMORY BIAS { an incentive program typically finish 57% higher than those who don’t. one yourself with an achievable BIG or down your goal helps you reaffirm and remember the goal. achieved ONCE REWARD We we remember. yourself { seven Since your brain forgets 70% of what happened yesterday, reminders are important! Also, your brain will engage functions that help you plan when you sit down and begin writing. Determine your reward early on so you can focus on it as you approach your goal. The reward (an integral part of your goal) will also act as a sweetener to your victory and an added deterrent to giving up – favor things that Hedonic TREADMI LL { nobody likes to lose. { RELEVANCYof GOA L In order to buy into a goal and put effort toward achieving it, we must perceive it as being relevant to us. Goals loom larger EFFECT { A deadline gives us an “end in sight” and our motivation will increase the closer we get to it. MEMORY BIAS { We favor things that we remember. Hedonic TREADMILL { We always want to move on to the next level. Goal Gradient THEORY { We work harder the closer we get to achieving a goal. Extrinsic MOTIVATION { We do something because we know we’ll be rewarded for it. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI WORLDWIDE™ 2014 | Proprietary & Confidential six Writing an incentive program { Goal Gradient THEORY { Learn more... Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential To learn more about BIWORLDWIDE, visit: BIWORLDWIDE.com or email info@BIWORLDWIDE.com. two Without committing to a deadline, there is no sense of urgency and no measure of how to budget our time. A deadline will help you prioritize and without them, goals you set are useless. Also, it’s okay to be on track but not achieve your goal in the time you budgeted as long as you don’t give up on the goal altogether. { DEADLINE give yourself a three make a PLAN ON HOW TO achieve it Create specific milestones to monitor proximity to your goal. No one runs a marathon without first setting milestones for training, 5K’s and half marathons. Your brain will do this automatically if you just give it a chance. { five T RACK YO UR progress Researchers tell us that a fast start leads to greater success and that knowing how well you’re doing along the way generates higher achievement, too. Tracking should be relevant to the size and scope of your goal. Those who get off to a fast start in { four By personalizing your goal, you put a higher value on it and are more likely to achieve it. In behavioral economics, the IKEA effect sums it up: what you create, you love. Make sure that your goal is truly yours. B EHAV IOR AL ECONOMICS SUCCE SSFUL GOAL SETTING behind it and the { { A deadline gives us an “end in sight” and our motivation will increase the closer we get to it. We always want to move on to the next level. We work harder the closer we get to achieving a goal. We will work harder to achieve a goal if we perceive we have an advantage at achieving it. In order to buy into a goal and put effort toward achieving it, we must perceive it as being relevant to us. Stretch goals challenge you to go beyond your comfort zone and you will find it to be especially rewarding when you accomplish something you weren’t certain you could originally do. It’s easier than you think – over half of our GoalQuest® incentive program participants exceed their baseline performance by achieving a stretch goal. write downSMALL, your GOA L about how behavioral economics can help drive goals by downloading our tip sheet now.
  20. Australia | Canada | China | India | Latin America | United Kingdom | United States ©BI Worldwide™ 2014 | Proprietary & Confidential follow us... BI WORLDWIDE uses the principles of behavioral economics to produce measurable results for our clients by driving and sustaining engagement with their employees, channel partners and customers.

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