The Behavioral Economics of Setting Sales Goals

Successful goal setters are different from
the rest – they achieve more than those
who don’t set goals properly.

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 achievement rates.

{ Idiosyncratic
fit
one

{ Idiosyncratic
By personalizing your goal, a
higher value is put on it and
you’re more likely to achieve it. goal make it your
own
fit
one

{ ReLEVancy
ofgoal
two

{ ReLEVancy
Stretch goals challenge people
to go beyond their comfort zone
and accomplish something they
weren’t certain they could do.
ofgoal
two
stretch
yourself with an
achievable
goal

{ Goals loom larger
Effect
three

{ 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.
three
givedeadline
yourself a

{ Memory
Bias
four

{ 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
BIGor
small,
four

{ Hedonic
Treadmill
five

{ 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
make a
achieve it
five

Goal Gradient
theory {
six

A fast start leads to greater
success and knowing your
status along the way generates
higher achievement.
Goal Gradient
theory {
six
Track your progress

{ Extrinsic
Motivation
seven

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.
{ Extrinsic
Motivation
seven
Once
achieved REWARD
yourself

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
{
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.
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six
Writing an incentive program {
Goal Gradient
THEORY {
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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
{
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.

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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.

The Behavioral Economics of Setting Sales Goals

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The Behavioral Economics of Setting Sales Goals