Stretch Targets: Do They Motivate Salespeople & when should they be used?

In the world of sales, motivation is the driving force behind performance and results. One common strategy employed by sales managers to boost performance is the implementation of stretch targets. These are ambitious goals set slightly beyond what is considered achievable, intended to push salespeople to their limits. But do stretch targets truly motivate salespeople, or do they risk demoralising the team? This blog explores the nuanced effects of stretch targets on sales motivation, drawing from psychological theories, real-world examples, and expert opinions.

Understanding Stretch Targets
Stretch targets are not just regular goals; they are ambitious, often pushing the boundaries of what salespeople believe they can achieve. The intention behind these targets is to stimulate extraordinary performance by challenging salespeople to go beyond their comfort zones. This concept is rooted in the psychological principle of goal-setting theory, which suggests that specific and challenging goals can lead to higher performance compared to easy or ambiguous goals.

The Motivational Power of Stretch Targets

1. Enhanced Focus and Effort: One of the primary benefits of stretch targets is that they can significantly enhance focus and effort. When salespeople are given ambitious goals, they tend to prioritise their time and resources more effectively. The challenge of achieving something extraordinary can stimulate a high level of engagement and drive, pushing salespeople to explore innovative approaches and work harder.
2. Sense of Achievement: Achieving a stretch target can provide a profound sense of accomplishment. This can boost self-esteem and reinforce a positive cycle of motivation. When salespeople see that their hard work and creativity can lead to remarkable results, they are likely to feel more confident in their abilities and more motivated to tackle future challenges.
3. Competitive Spirit: Sales teams often thrive on competition, both internally and externally. Stretch targets can tap into this competitive spirit, motivating salespeople to outperform their peers and competitors. The desire to be recognized as a top performer can drive individuals to push themselves harder than they would with standard targets.
4. Skill Development: Working towards stretch targets can also contribute to the development of new skills. Salespeople may need to adopt new techniques, learn more about their products, or enhance their customer relationship management skills. This ongoing development can lead to long-term career benefits and job satisfaction.

Potential Downsides of Stretch Targets
While stretch targets have clear motivational advantages, they also come with potential risks that managers must carefully consider.

1. Risk of Burnout: Constantly striving for highly ambitious goals can lead to burnout. Salespeople might feel overwhelmed by the pressure to continuously exceed their limits, leading to stress, fatigue, and a decline in overall performance. If not managed properly, the pursuit of stretch targets can result in high turnover rates and reduced morale.
2. Demotivation from Failure: If stretch targets are perceived as unattainable, they can have the opposite effect, leading to demotivation and disengagement. When salespeople consistently fail to meet their goals, it can erode their confidence and diminish their motivation to perform. It is crucial for managers to set targets that are challenging yet realistic to avoid this pitfall.
3. Unethical Behavior: In some cases, the pressure to meet stretch targets can drive salespeople to engage in unethical behavior. This can include misrepresenting products, pushing customers into unwanted purchases, or manipulating sales figures. Such actions can damage the company’s reputation and lead to long-term negative consequences.

Balancing Stretch Targets for Optimal Motivation
To leverage the motivational benefits of stretch targets while mitigating the risks, managers should consider the following strategies:

1. Set Realistic but Challenging Goals: Ensure that stretch targets are ambitious yet achievable. They should be grounded in a thorough understanding of the market conditions, individual capabilities, and available resources. Involving salespeople in the goal-setting process can also enhance their commitment and buy-in.
2. Provide Adequate Support: Equip sales teams with the necessary tools, training, and resources to achieve their targets. Continuous support from management, including regular feedback and coaching, can help salespeople navigate challenges and stay motivated.
3. Recognize and Reward Effort: Celebrate not just the achievement of stretch targets but also the effort and progress made towards them. Recognition can come in various forms, such as bonuses, public acknowledgment, or career advancement opportunities. This reinforces positive behavior and encourages ongoing effort.
4. Monitor Well-being: Keep a close eye on the well-being of the sales team. Encourage a healthy work-life balance and provide support mechanisms to address stress and burnout. An environment that promotes mental and physical health will sustain motivation in the long run.

What does the research say?
Research into this topic by Harvard University, indicates that in addition to appropriate goal setting, certain conditions must be present in an organisation for stretch targets to be viable.  Their framework suggests that organisations with strong recent sales performance together with "slack" or available resources are the conditions most likely to see stretch targets achieved.

On the first condition - Strong recent sales performance; a series of prior wins (like in sport) has a positive effect on the behaviours and attitudes within the sales team. "Success breeds success" as it were. Their research concludes that organisations should take bold risky decisions when they are strong, not weak/or coming off a series of losses.

On the second condition - Surplus or slack resources; The Harvard study found that organisations with an abundance of resources such as money, expertise, knowledge, people and equipment were better able to try and stick with bold and even risky ideas,  absorb short term losses and in general be more resilient and committed in the face of setbacks. Those organisations with less resources tended to be less resilient and jump between band aid type approaches.

Conclusion
Stretch targets, when implemented thoughtfully can be a powerful motivational tool for salespeople. They enhance focus, foster a sense of achievement, stimulate competitive spirit, and drive skill development. However, it is crucial for managers to balance ambition with realism, provide continuous support and resource allocation, recognise efforts, and monitor well-being to prevent burnout and demotivation. 

Fifth Executive specialises in the recruitment of sales personnel.