The bank has six sales areas that are the same size, have the same resources allocated and a similar potential, but have different levels of performance.

Sales Areas 3 and Area 6 have the best performance, where Area 1 and Area 4 are the worst, with an average performance of 20 units sold.

The bank has analysed its market share, the size of the market, its strength against its competitors, and its historic growth and has decided that it can grow at 15 per cent during the next period.

How can the bank set sales targets properly, without ‘killing’ Area 3 and Area 6 and provide a challenge to the others?

We have already discussed that if the bank wants to preserve the performance and motivation of Areas 3 and Area 6, it needs to be careful about setting the targets, otherwise teams that deliver more will always be stretched until they break while teams not performing will always have an easy time.

The total sales production is the sum of the six areas, which is 120 units. For a 15 per cent growth, the bank will need to sell 138 units.

The chart shows each area’s performance, and the final target set, respecting the above principles.

Setting performance targets

To challenge the teams in Area 1 and in Area 4 the bank sets a growth of 40 per cent, in Area 2 and Area 5 growth of 15 per cent, while in Area 1 and Area 6 a seven per cent growth rate is required. Such growth will give the company the expected overall 15 per cent growth.

You can increase one or reduce another but you need to always keep in mind that you should not ‘kill’ nor penalise well-performing sales teams by over-stretching them, destroying their motivation, or even worse, losing the team to competitors.


It is important to make relative comparisons with similar-sized sales units, (for example, by sales areas, regions, branches, or geographies), similar numbers of salespeople, and sales potential. Once the bank establishes the units to be compared, it should analyse the performance per product and segment. Banks should avoid overall comparisons, like total sales or total revenue, as they will miss opportunities, as one product’s good performance may be over-compensating poor performance in another. It is important to understand relative performance by product or service. A well-performing sales unit may not be performing well in every product, giving the bank a revenue opportunity: as a result a particular product or service in a well-performing area may have to have an aggressive challenging target. High-performing areas will have a lower growth in products or services with higher penetration, and the non-performing products will have above the average expected sales growth.

Continuing with our previous example, while Area 3 and Area 6 have an above-average penetration in credit cards and overdrafts, there is an opportunity for a more aggressive growth rate in insurance products.

The sales comparison exercise is a long and detailed one, but once the bank understands the relative performance of similar units, it will understand the reason for such performance. It must challenge non-performing products and sales.

A bank will never have similar sales units with the same performance, but it is the job of a sales manager or the sales director of a bank to ensure that the various units have challenging and achievable targets. There is no point in setting linear targets that give an easy life to non-performing teams and an impossible task to well-performing team.