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Numeric targets are a bad idea. They’re especially bad when monetary rewards are attached to them. Yet in sales, bonuses are often considered a must. There is a deeply rooted belief that sales can not function without bonuses.
Numeric targets with bonuses are an attempt to simplify the sales process and make it measurable. From a thousand leads, we’ll book a hundred meetings and eventually close one actual client. While this basic pipeline has truth to it, it is simplistic.
To build successful, long-term business we should find work that’s meaningful to the people actually doing the real work. We should make sure that the engagements are not dead on arrival, but have at least a decent chance of succeeding. We need to find engagements that help us become better at what we do. Numeric targets will guide our attention to quantity and leave out quality.
At Reaktor, our sales team doesn’t have bonuses. As a result, instead of focusing only on closing deals in the short-term, they’re striving for meaningful, successful, long-term partnerships with clients. Not having the distraction of bonuses enables them to do their best to look at all the variables at play.
After being privileged to see our sales team work for years, I think the real question is: how is it possible for a sales team to function properly when they do have numeric targets and bonuses?