{"id":1025,"date":"2019-12-07T13:18:21","date_gmt":"2019-12-07T19:18:21","guid":{"rendered":"http:\/\/blog.kmbrian.com\/?p=1025"},"modified":"2020-12-04T15:45:19","modified_gmt":"2020-12-04T21:45:19","slug":"sales-goals","status":"publish","type":"post","link":"http:\/\/kmbrian.com\/blog\/sales-goals\/","title":{"rendered":"How to Set Effective Sales Goals for Your Sales Team"},"content":{"rendered":"

We live in a goal-oriented world: New Year\u2019s resolutions, academic goals for the school year, personal goals to change our life around, and professional goals at the office. It\u2019s goals galore.<\/p>\n

With a SaaS business, you may have all kinds of business goals<\/a>: increasing customer lifetime value, decreasing churn, increasing average revenue per customer, or decreasing cost per acquisition, to say nothing of your marketing campaign goals.<\/p>\n

But ultimately, it\u2019s all about growth, right? And while \u201cgrowth\u201d can take the form of many metrics, you\u2019re really only interested in one: sales.<\/p>\n

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Revenue growth is the alpha and omega of business success. To drive growth, you<\/p>\n

need sales goals to be challenging but realistic – lofty but attainable. And just<\/i> the right amount. Too few, and your sales department is unmotivated. Too many, and they\u2019re overwhelmed.<\/p>\n

Setting concrete goals increases motivation. A study of Harvard students found those with a goal-oriented plan performed 30% better on average than those without one<\/a>. The lesson of that story? Set goals.<\/p>\n

And if you fall within a certain bracket, you might want to consider setting stretch goals<\/a> – or \u201cbig, hairy, audacious goals\u201d as described in Built to Last<\/i><\/a> – if you want to kick your company-wide motivation and achievement up a notch.<\/p>\n

Think of stretch goals as goals beyond your goals. They go the extra mile. They differ from your \u201cregular\u201d business goals – which are lofty but attainable small wins – in that they\u2019re very difficult to achieve, and require a complete rethinking of how things get done. They\u2019re likely possible…but extremely<\/i> difficult to pull off. And they don\u2019t work for everyone.<\/p>\n

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In the chart below, you\u2019ll see that stretch goals really only apply to those companies that are already successful, but with uncommitted resources available. If you don\u2019t meet both of those criteria, you\u2019re better off skipping stretch goals until you find yourself in that category.<\/p>\n

\u201cThe most unprofitable item ever manufactured is an excuse<\/i>.\u201d ~John Mason<\/a>, Author<\/p><\/blockquote>\n

No excuses. Just goals appropriate for your<\/i> business and situation that lead to growth, sales, and revenue. Set small, medium, and\/or big, hairy, audacious goals.<\/p>\n

Just set them. Easier said than done? Let\u2019s take a closer look.<\/p>\n

\"Should<\/p>\n

Image Source<\/a><\/p>\n

Define Your \u201cRealistic\u201d<\/h2>\n

Let\u2019s set the idea of stretch goals aside for the moment. You might be a prime candidate for them. You might not.<\/p>\n

Either way, you need to start with the smaller, more attainable goals. The \u201cregular\u201d ones.<\/p>\n

The realistic<\/i> ones.<\/p>\n

According to the Harvard Business Review, a few salespeople falling short of sales goals is the fault of the individual, but a majority is<\/i> the fault of the goal itself.<\/p>\n

No one understands your industry, market, products, and customers better than you, so no one can define \u2018realistic\u2019 better than you. There\u2019s no such thing as an industry-wide goal.<\/p>\n

You need to set realistic business goals based on whatever hard data you have available. Your sales records, historic growth rates, and the performance of your closest competitors can all provide invaluable insight. If you\u2019ve historically experienced 5% growth each year, asking for 25% is probably not realistic. But 10%? That might be. It\u2019s ambitious, but feasible.<\/p>\n

Analyze the growth potential for your market and industry: is it largely untapped, or oversaturated? Is there room for you to get a bigger piece of the pie?<\/p>\n

Evaluate your existing sales team: are they motivated, can they handle increased expectations, and do you have the resources and money to quickly scale up if necessary?<\/p>\n

Is your business set up for success? Do you have a capable growth team<\/a> in place to deliver more sales-ready leads to your hungry sales personnel?<\/p>\n

Ask the questions. Find the answers. Bridge the gaps.<\/p>\n

“Setting goals is the first step in turning the invisible into the visible<\/i>.” ~Tony Robbins<\/a><\/p><\/blockquote>\n

Set Monthly Sales Goals<\/h2>\n

Set monthly – or even weekly – sales goals, depending on your business model. It\u2019s easy to set either vague sales goals – \u201cincrease revenue\u201d – or long-term sales goals – \u201cincrease revenue by 15% within 2 years.\u201d<\/p>\n

Vague is a waste of time. It\u2019s too broad and lacks the specificity needed to identify the steps and milestones.<\/p>\n

Long-term has its place, but you need more than that. You want frequent \u201csmall wins\u201d to boost morale and keep everyone motivated. It\u2019s hard to get excited about the eighth month of an 18 month plan with only one end goal.<\/p>\n

Enter the monthly sales goal.<\/p>\n

As a general rule of thumb, you can set a baseline monthly sales goal by examining your break-even annual revenue. How much do you need each year to pay salaries, production costs, marketing, distribution, utilities, and whatever other expenses you have?<\/p>\n

Divide that figure by twelve, and you have your minimum<\/i> monthly sales goal. Of course, no one ever succeeded in anything by aiming for the minimum. It\u2019s just a place to start. Anything less than that, and you\u2019re losing money.<\/p>\n

So how do you realistically add to that amount and set sales goals that encourage growth? You crunch the numbers to find actionable<\/i> steps.<\/p>\n

Crunch Some Numbers\"\"<\/h2>\n

Data-backed business decisions are good decisions. Take the guesswork out of the equation and use the numbers available to you.<\/p>\n

Want to increase sales and revenue? Great. Go for it.<\/p>\n

If only it were that simple. Deciding to increase revenue is not rocket science, but without some concrete data to work with, you can\u2019t generate the actionable<\/i> steps to make it happen.<\/p>\n

If, for example, your sales team historically makes five sales for every 100 calls, and you wanted to increase your monthly goal to ten sales, they\u2019d need to make about 200 calls per month.<\/p>\n

That\u2019s<\/i> actionable. That\u2019s<\/i> concrete and clear. That\u2019s<\/i> data-backed. What\u2019s the goal? Make 200 sales calls each month.<\/p>\n

Now, that\u2019s not to say you\u2019re done. Once you\u2019ve identified your actionable step or goal, you next need to determine whether it\u2019s possible or realistic. 200 sales calls is an average of 6.67 each and every day, including weekends.<\/p>\n

If they each take 45 minutes or more, it\u2019s not going to happen. If it requires only 10 minutes, then that can probably work.<\/p>\n

Your business. Your data. Your numbers. Use them to set activity-oriented goals<\/a> rather than straight-up dollars and cents or percentages. Your salespeople will be happier and more motivated, and it\u2019s much more likely to happen.<\/p>\n

\u201cEvery sale has five obstacles: no need, no money, no hurry, no desire, no trust<\/i>.\u201d ~Zig Ziglar<\/a><\/p><\/blockquote>\n

Small, actionable goals are crucial to your business. They allow your sales personnel to chip away at them. It gives them the opportunity for quick and frequent \u201cwins\u201d to propel them towards the big picture goal(s).<\/p>\n

Find What\u2019s Working and What\u2019s Not<\/h2>\n

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If you want to increase your revenue, you need cold, hard data to analyze your entire sales cycle<\/a>:<\/p>\n