As the great Zig Ziglar once said, “A goal properly set is halfway reached.” And science has proven time and again that he was right. Studies have repeatedly shown that the setting of specific and measurable goals can have a real, balance sheet-boosting impact on the productivity of your salesforce.
You know this in theory, right? But if you’re wondering how to set sales targets or how to make a sales plan in practice, read on.
Setting sales goals that are SMART
Let’s just recap on basic wisdom about how to set sales goals using the widely known mnemonic SMART:
S – Specific– The more you are able to define exactly what it is you want to achieve the greater the chance of getting there.
M – Measurable– How will you know that your goal has been met? By spelling out the desired end result you’ll make everything a lot clearer for your sales team.
A – Attainable– While you want to make your sales goals challenging enough to stretch your team, your sales guys will certainly need to feel the targets they’ve been set are possible, otherwise you may find they lose motivation.
R – Relevant– Look at your company’s overall profit targets and start from there. Make sure, when setting sales targets, that they’re always part of the bigger picture.
T – Timely– By creating a sales plan with deadlines you’ll add an intrinsic motivator for your teams – most people work more efficiently when there’s a deadline in place.
How to set goals that will move your business forward
When setting sales targets for your team, there are several options depending on the nature of your business and your current overall strategy – use your long-term company goals to inform the decisions you make. All short and medium-term goals should lead towards the achievement of this longer-term goal:
Target sales revenue growth
This is one of the most frequently used metrics, as calculating income received by each salesperson is straightforward and easy for everyone to understand. But how to set targets for sales? Begin with last year’s sales figures. Based on your annual strategy, calculate your expected sales revenue growth year on year.
Use this to inform appropriate quarterly and monthly sales targets to set for your team. These could be a percentage increase or a specific total increase on last year’s sales. Be sure to take into account any activities that will occur within the time period that may impact your team’s ability to target sales in the volumes you would like.
Monitor how it’s going, and mid-way through the year, if you find the sales goals you set are too easily achievable, adjust them upwards for the second half of the year. If targets don’t stretch your sales team enough you risk losing money.
Incentivize new business generation
If your primary strategy this year is to grow your customer base, get your salesforce motivated to bring in new business with targets that are linked to acquiring, or selling to, new customers.
Again, work from an annual target to calculate how many new customers would need to be found each month, or each quarter, to enable your annual target to be met. Your target might be 5 new customers each per salesperson per month, or 50, depending on the nature of your business. Giving your sales team such a specific target will allow them to calculate how many prospects they will need to contact, knowing how many they can expect to convert. It will also allow them to track their own progress easily across the time period.
When you’re looking to foster a better team spirit – perhaps if you’ve had lots of new starters in the team – it can be beneficial to think about setting sales goals at a team level. Make sure that you still monitor individual performance as you’ll want to make sure everyone is pulling their weight and not hiding behind others.
Remember, whenever you’re setting sales targets, always talk them through with the team. Get a steer from them as to how realistic they are. After all, while a sales target should provide enough of a stretch to give the motivation to push forward, it should not be so far-fetched that it causes your sales team to lose morale. Also, by agreeing the targets up front your reps will feel much more accountable.
Does your system allow you to easily monitor performance against sales goals? Find out how sales-i can help to make the whole thing easier.