Road to Success: Setting the Right Sales Goals

Posted by Lucrativ on 8/29/19, 11:00 PM

 

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Sales teams set goals on a regular basis—from monthly and weekly to even daily. Having goals give sales team focus. Sales reps know exactly what needs to be accomplished, and sales managers strategize specifically for these goals and targets.

A lack of goals can bring about a lack of drive among sales reps. It signals a lack of direction and this can impact your team’s performance and your business revenue.

But goal-setting is not just a matter of listing goals. The process has to be well thought of for it to be achievable and successful. Setting goals that are challenging yet attainable is also key. You want goals that test your team’s skills and capabilities, but you also want goals that they can actually accomplish.

And contrary to popular belief, sales teams don’t only have one goal: meeting quotas. That’s severely short-sighted. Sales teams should have weekly goals—even daily—that help get them to the bigger goal: meet or exceed quotas.

First, let’s discuss how to set goals. We’ve long espoused the value of the SMART Criteria—from setting goals to giving constructive feedback to employees. SMART means: Specific, Measurable, Achievable, Realistic, Time-Bound. The tips below touch on these criteria and more.

Let’s get started.

 

8 Ways to Set Challenging Yet Attainable Goals

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1. Be very clear about your goals.
It’s easy to say “Let’s increase revenue” or “Let’s sell more.” While that is a goal in itself, it doesn’t really set a direction to identify the actions needed to be taken to achieve that goal.

Set weekly or monthly sales goals based on historical and market data. Sales is a numbers game and you should have numbers in your data and reports to serve as jumping-off points.

For example: If you’ve been averaging 5 closed deals out of 50 prospects and you want to double your sales this month, that means you have to generate at least 100 leads a month. So that’s your goal: Generate at a minimum 100 prospects a month. That’s specific.

2. Break down your goals.
Your goals don’t need to be big all the time. In fact, the small goals lead to the big goals; the small wins lead to the big wins.

Set smaller goals to get to the big ones. This will also make your goals more strategic and, to your sales reps, more attainable.

So you can break down that 100 prospects a month to 25 a week or five prospects a day. If you have a team of 5 sales reps, that’s just at least 1 prospect a day for each of them. (We say at least because you don't want to hit just the minimum.) That sounds more manageable.

Breaking down goals brings about “action” or “activity” goals—these are goals that have specific, actionable steps attached to them. For sales reps, this boosts their productivity: they work more efficiently if they know the specific tasks they need to work on. For managers, it makes monitoring performance much easier.

This is why sales reps must also always have a daily checklist. All those little tasks they perform each day can yield great results over time.

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3. Set what’s realistic.
Again, you don’t just pull numbers out of nowhere. Your goals have to be backed by data.

This is also how you can guarantee that your goals are within the realm of reality. In the above example: To reach the 100 prospects a month, is it realistic for the team of five to get one prospect a day?

Again, look at your data: How many phone calls do you need to make to land at least one prospect? Let’s say it takes 20 calls to get one quality prospect. So that means each sales rep needs to make at least 20 calls a day to meet the “one prospect a day” goal. Depending on how quickly or slowly a call goes, that could mean that making cold calls is all that your team members will do day in and day out, every day of the week. How about pitches? Meetings? Sales calls? Other sales-related tasks? Then you also have to consider that not all your sales reps are on the same skills level.

All of a sudden, what sounded manageable at first doesn’t seem too realistic now, does it?

So then you have to make it more realistic. It could work if sales enablement or marketing has better lead qualification systems that would allow them to hand off high quality, best-fit leads to sales reps. That way, your sales reps won’t need to make 20 calls a day to get to one quality prospect.

That creates another goal for management: Increase lead generation and lead qualification efficiency. That could mean putting more people in charge of lead generation, or improving the current system for generating and qualifying leads. You will need to identify the loopholes and set activity goals for each one.

This is why goal-setting is not so easy. There are many pieces of the puzzle that you need to consider. You have to look at your organization as a whole and set goals based on how all the parts of the whole function.  

4. Check what’s working and what isn't.
Part of keeping things realistic is checking what works and what doesn’t within the current sales system. Analyze all the data available to you: win rates, loss rates, sales cycles lengths, weekly performance reports, etc. This should be easy if you have sales metrics and pipeline reports readily available, or if you do regular analysis of your sales funnel.

By identifying what doesn’t work and correcting them, you're making sure that your goals have better chances of being attained.

5. Align everything.
It goes without saying that if you will set all these small, short-term, and activity goals within different teams and departments, then those need to be aligned.

What does each person have to meet? What does a whole department or team need to hit? What’s the target for this week and does it align with the monthly target? And does the monthly meet the annual sales goal?  Managers must make sure that all these goals are in sync.

6. Aim for stretch goals.
While being realistic is good, it doesn’t hurt to think and go bigger when the time is right. This is why we have stretch goals.

While stretch goals aren’t right for everyone (e.g. an underperforming sales rep), managers can identify who can carry the “additional pressures” attached to stretch goals (e.g. an overperforming rep or team).

Setting stretch goals may need to happen when the wheels have started turning. If you’re seeing some progress, it wouldn’t hurt to challenge your sales reps further. But for stretch goals to be enticing and effective, you need to do the next step: incentivize.  

7. Create incentives.
The rule for creating incentives is simple. Create them based on what motivates your members. Truth be told, it would most probably be cash: a bonus or a bigger commission.

If the company is not in a position to incentivize with cash bonuses just yet, it can get creative and offer other rewards like paid vacation leaves, gift certificates from suppliers, and the like. The idea is to reward them for the accomplishment of big—and especially stretch—goals.

8. Set up a "goals monitoring" system.
You can set all the goals you want, but if you’re not monitoring them, it would all be for nothing. Set up an efficient system for monitoring all the small and big goals. This can be done with your CRM.

Your CRM can give you pipeline visibility and quota transparency for easier tracking. Customize your dashboards so you can have an overview of the reports you need to regularly analyze. Dashboard lets you track many metrics at once, so you can quickly check the performance of your team or see correlations between different reports. And make sure to generate enough insight to identify problems and create solutions. 

 

Now that you’ve set your goals and created a system for it, how can you make certain that these goals are achieved? That’s in our next post.

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Photos from Pixels. Main photo by rawpixel.com

Topics: Sales Team Management

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