It is a sales manager’s responsibility to set sales goals for their team. Your sales goals should be something that you can achieve, without being too specific on hitting a certain number.
A sales manager who focuses only on numbers is making a big mistake when setting sales goals for their team.
It is important to keep in mind the long-term business goals of your company when making decisions. To meet sales targets, representatives may pursue deals that are not profitable, have a high churn rate, or both. If your company’s representatives make unrealistic promises that your product or service cannot deliver, this can have negative consequences for your company’s reputation.
It is important that the numbers you choose are achievable and motivating. If sales representatives feel that their targets are unattainable, they will focus their energy on interviewing for other jobs instead of trying to reach your company’s revenue goals.
How to set sales goals
It is difficult to achieve sales goals without a clear plan. The ideas mentioned can be used to help achieve sales goals, however there are some additional steps that need to be taken to guarantee success.
1. Determine what’s realistic
A business can’t succeed without ambition. If you’re not careful, shooting for the moon can lead to getting carried away. That doesn’t mean you shouldn’t set challenging goals. By all means, aim high. You need to establish what will be considered realistic in terms of your goal-setting.
When considering what to expect from your sales organization, you will need to take a look at a few things. The first is past data. Look at key performance indicators from the past to analyze how your sales department has performed, such as revenue, profit margins, and sales funnel conversion rates. Past performance is a good starting point, but don’t expect your business to change overnight.
Next, take a look at growth rates. It is important to select a consistent time frame when measuring something. When making sales goals for the next month, compare your growth to the previous month. This also applies to quarters, years, etc. Use average growth rates with your past sales data to generate ideas of what is possible and what is not. Goals that challenge you are ones that are difficult but possible to achieve, while unrealistic goals are ones that are impossible to achieve.
After you have looked at your sales team, you should assess their skills and potential. You need to figure out if the goals you have fit the specific group you’re working with. If you are training a lot of new sales representatives, you may want to wait to set goals until they are fully acclimated. If your department is full of strong sales professionals, you should incorporate that into your objectives.
2. Set the goals
Now it’s time to set the goals. Your business model will determine how often you need to check your inventory levels. Checks can be done on a monthly, quarterly, or yearly basis. While long term goals are important, it’s also beneficial to give sales teams more small and frequent wins.
Take seasonality into account. If your business’ sales typically go up or down during certain seasons, make sure your sales goals for the year reflect that.
Remember that it costs money to keep your business running. Your revenue needs to be greater than the total of your expenses which include salaries, production costs, marketing expenses, and general overhead.
3. Make sure they’re SMART
It’s good to have goals like increasing revenue or reducing the sales cycle, but they’re not specific enough to be useful. They’re just ideas. A sales goal should be specific so that you know what you need to achieve, it should be measurable so that you can track your progress, it should be achievable so that it is realistic, it should be relevant to your business goals, and it should be time bound so that you have a deadline to achieve it.
Reevaluate each sales goal you’ve made and ensure they meet the following criteria:
- Specific: Be clear and specific about what you want your sales team to achieve. Leaving a goal too vague can result in poor direction for achieving it.
- Measurable: Attach a number to the goal so progress and success can be measured. You don’t want to increase revenue, you want to increase revenue by 5%.
- Achievable: This all goes back to defining what’s realistic for your team. Ensure that the goal is achievable. While aiming high can be a good motivator, taking it too far can be discouraging and feel hopeless.
- Relevant: Your sales goals should reflect those of the business. Make sure your department is aligned with senior leadership and other departments.
- Time bound: Set a deadline for completion. This will eliminate the temptation to procrastinate on important sales goals.
Let’s look at an example.
Here’s a non-SMART goal: Let’s generate more revenue.
The goal is to increase annual recurring revenue by 3% by reevaluating our customer retention strategy by the end of the second quarter.
4. Re-strategize to support them
The goals of a sales team typically involve earning money, but the specific focus will depend on what the organization is trying to achieve during that time period. This could mean focusing on reducing the number of customers who leave, lowering the cost of the items sold, and so on. These will be reflected in your sales goals.
If you want to achieve different sales goals, you will need to follow a different strategy. You cannot reach a new goal without changing your methods.
What are some things your team can do to help achieve each new sales goal? It is important to have a clear set of sales metrics so that you can track your progress, success, or failures. After deciding what actions need to be taken to reach your sales goals, examine your sales strategy to identify what is and isn’t effective, and what can be improved.
Using sales performance management tools, answer the following questions and strategize accordingly:
- Where are we currently seeing success in our sales process? Where are we currently experiencing hiccups?
- Do we currently have any tools or resources that can help resolve setbacks? If not, can we explore opportunities to find them?
- At what stage in the sales funnel are we losing the most leads? How can we optimize that stage to keep that from happening?
- Where is our core audience most present, and how can we do a better job of reaching them there?
Your answers to specific questions will help you develop a series of smaller goals that, collectively, will help you achieve your broader objectives. Sales representatives will be more motivated to achieve long-term goals if they experience more frequent wins.
5. Track progress
It is important to track your progress when you start a new business venture. Sales goals should be set with benchmarks and milestones so that growth can be measured at regular intervals. Whether or not you are likely to hit sales goals can be determined by this, which might require further strategizing.
Depending on what your sales goals are, there are a set of sales metrics that you can track in order to monitor and evaluate your progress in real-time. Be sure that every member of your team knows what is being tracked and why it is being tracked. Use the data to improve your strategy.
At the end of the month, quarter, or year, you should calculate your final metrics and determine whether or not you hit your sales goals. You should keep that data for future reference.
How to smash your sales goals
Before anything else, take the time to come up with a strategy and plan for what you would do in the event of failure. Sales managers may not set out to fail, but roadblocks are an inevitable part of business.
Very careful planning does not only involve looking at what resources you have in place to achieve your goals, but also examining the gaps and the obstacles.
Having a plan to deal with setbacks ahead of time will make it easier to fix problems when they come up. This is a quick process to follow for your plan. It doesn’t have to be exhaustive.
What can prevent you from achieving your goals? Examples might include having a limited budget that doesn’t allow for new hires, or not having access to helpful tools like a customer relationship management platform.
Determine if your team has the necessary skills, abilities, and systems to meet their goals. Is more sales training needed, and do you have the means to provide it?
- Conduct market research: You also need to have a solid understanding of the market, your target audience, demand for your product or service and the competition.
Once you’ve identified your biggest potential obstacles, you can establish a strategy to overcome them.
Develop support and structure
The goal of a sales team should not be simply set and forgotten. In order to ensure that the team’s goals are actually achieved, they should be regularly monitored. As a sales manager, it is important to set goals for yourself.
To empower your sales team to reach their goals, focus on the actions you can take.
Your top priority should be to get a system in place to facilitate simple pipeline management and successful selling.
If sales reps are too busy with administrative tasks, they’re not spending enough time on things that are important. If you want your sales department to be focused on selling, you need to automate it. A CRM system is necessary for sales managers and reps to be able to monitor performance and gauge progress. By reporting on sales performance, you can identify areas that need improvement and make changes to increase productivity. Additionally, you can use this data to recognize top performers and incentivize them accordingly.
The value of having a sales team that you can talk to in person or over a video conferencing platform cannot be ignored. Your team should see you as a mentor and sales coach, not just a manager who is focused on targets.
Make sure your team understands their goals and how they can achieve them. Give them the time they need to do this.
Are they feeling confident about the goals you have set?
Do they foresee any challenges?
Where do they need your support?
This makes it easier for you to meet with individuals or teams to talk about how well they are doing, any challenges they are facing, what they have learned, and to celebrate their successes.
We’ve talked about how setting activity-based goals can help your team take back control, but now you need to help them figure out which goals to prioritize.
Set clear goals for your reps and coach them to focus their energy on the most impactful tasks. The tasks that an employee is assigned should support both their professional goals and the company’s profitability.
Reward your team for great performance
Giving your team members performance-based bonuses and incentives is a great way to get them to produce their best work.
It’s a no-brainer: Incentivize sales targets for your team.
Although monetary rewards are a form of positive reinforcement, you shouldn’t rely solely on them.
Think about ways to celebrate when a customer spends more money with your company (an upsell) or when a customer continues to do business with your company (customer retention). This will motivate your team to approve the right customers and concentrate their energy on the customer lifecycle – and raise morale in the meantime.
Quick sales that don’t turn into long-term customers should not be celebrated as it is not good for the team or business.
Sales managers should set goals for themselves and their team that are slightly out of reach. This means that if you make all of your goals difficult to achieve, you are more likely to not accomplish them and disappoint yourself and your team. If you want your team to do better, it’s okay to push them to exceed expectations and strive for more. Just be sure to offer them rewards for their efforts and set more realistic goals at the same time.
Don’t just set it and forget it
It is not worth it to set a goal if you do not have a plan to achieve it. There will always be relevance to the sales goals mentioned, but they won’t always be the main focus. Focusing too hard on too many things at once is a recipe for burnout. Your sales goals should be specific so that they are achievable, and you should be rewarded for achieving them.
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