The Behavioral Economics of Setting Sales Goals

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Behavioral economicssuccessful goal setting

and

Behavioral economicssuccessful goal setting



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.

http://www.biworldwide.com/en/sales-channel-effectiveness/sales-incentives

http://www.biworldwide.com/en/bi-blog/



Encourage your sales force to follow these seven goal-setting best practices

to boost achievement rates.



{idiosyncraticfIto

ne



By personalizing your goal, a higher value is put on it and you’re more likely to achieve it. goalmake it

yourown

{idiosyncraticfIto

ne



{relevancyofgoAL

two



Stretch goals challenge people to go beyond their comfort zone and accomplish something they weren’t certain they could do.

{relevancyofgoAL

two

goalstretchyourself with anachievable



{goals loom largerEffECtth

ree



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.

deadlinegiveyourself a

{goals loom largerEffECtth

ree



{memoryBIAS

fou

r



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.

goalwrite downyourBigor

small,

{memoryBIAS

fou

r



{Hedonictreadmill

five



Create specific milestones to monitor proximity to your goal. Your brain will do this automatically if you just give it a chance.

make

a

Plan on how toachieve it

{Hedonictreadmill

five



goal gradienttHEorY {s

ix



A fast start leads to greater success and knowing your status along the way generates higher achievement.

goal gradienttHEorY {s

ix

track YoUrprogress



{Extrinsicmotivations

eve

n



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.

{Extrinsicmotivations

eve

n

onCEachieved reWard

yourself



Australia | Canada | China | India | Latin America | United Kingdom | United States©BI WORLDWIDE™ 2014 | Proprietary & Confidential

Successful 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.

To learn more about BI WORLDWIDE, visit: BI WORLDWIDE.com or email info@BI WORLDWIDE.com.

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

{

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.

{DEADLINEgiveyourself ath

ree

make

a

PLAN ON HOW TOachieve itCreate 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

TRACK YOURprogressResearchers 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

an incentive program typically finish 57% higher than those who don’t.

{

six

ONCEachieved REWARDyourselfDetermine 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 – nobody likes to lose.

{seve

n

Writing down your goal helps you 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.

{

fou

r

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.

GOALmake it yourown

on

e

BEHAVIORAL ECONOMICS

SUCCESSFUL GOAL SETTING

beh

ind

itand the

{

{

A deadline gives us an “end in sight” and our motivation will increase the closer we get to it.

Goals loom largerEFFECT{

We always want to move on to the next level.

HedonicTREADMILL{

We work harder the closer we get to achieving a goal.

Goal GradientTHEORY{

We do something because we know we’ll be rewarded for it.

ExtrinsicMOTIVATION{

We favor things that we remember.

MEMORYBIAS

{

We will work harder to achieve a goal if we perceive we have an advantage at achieving it.

IDIOSYNCRATICFIT{

In order to buy into a goal and put effort toward achieving it, we must perceive it as being relevant to us.

RELEVANCYofGOALStretch 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.

GOALstretchyourself with anachievable

GOALwrite downyourBIG or

SMALL,

Australia | Canada | China | India | Latin America | United Kingdom | United States©BI WORLDWIDE™ 2014 | Proprietary & Confidential

Successful 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.

To learn more about BI WORLDWIDE, visit: BI WORLDWIDE.com or email info@BI WORLDWIDE.com.

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

{

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.

{DEADLINEgiveyourself ath

ree

make

a PLAN ON HOW TOachieve 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.

{fiv

e

TRACK YOURprogressResearchers 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

an incentive program typically finish 57% higher than those who don’t.

{

six

ONCEachieved REWARDyourselfDetermine 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 – nobody likes to lose.

{seve

n

Writing down your goal helps you 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.

{

fou

r

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.

GOALmake it yourown

on

e

BEHAVIORAL ECONOMICS

SUCCESSFUL GOAL SETTING

beh

ind

itand the

{

{

A deadline gives us an “end in sight” and our motivation will increase the closer we get to it.

Goals loom largerEFFECT{

We always want to move on to the next level.

HedonicTREADMILL{

We work harder the closer we get to achieving a goal.

Goal GradientTHEORY{

We do something because we know we’ll be rewarded for it.

ExtrinsicMOTIVATION{

We favor things that we remember.

MEMORYBIAS

{

We will work harder to achieve a goal if we perceive we have an advantage at achieving it.

IDIOSYNCRATICFIT{

In order to buy into a goal and put effort toward achieving it, we must perceive it as being relevant to us.

RELEVANCYofGOALStretch 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.

GOALstretchyourself with anachievable

GOALwrite downyourBIG or

SMALL,

about how

behavioral economics

can help drive goals

by downloading

our tip sheet now.

learn more...

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BI WORLDWIDE uses the principles of behavioral economics to produce measurable results for our clients by

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