Why is it so important to set sales targets?

Sarah Rogers, Thursday 8 February 2018

importance of sales targets .jpgWorking towards a goal is something we thrive on as human beings, whether it’s setting ourselves targets in our professional lives, or having ambitions on a personal level.

Effective goal setting is a great habit to develop and will be essential if you want to achieve big things in the world of sales. The reason is simple - focus. If you have a goal and know where you’re trying to reach, you can focus all your efforts on finding the best and most efficient route to get there. Without a clear destination, you risk rambling along, wasting time and missing opportunities.

But it takes skill to set productive goals and chasing the wrong ones could cost you dearly (not just in lost sales).

To get it right, you need to have a good understanding of the following:

  • How your business processes run
  • What the wider business goals are
  • How best to align your sales targets with the business goals
  • What you need to do to achieve these targets
  • How you can measure your progress and improve on what you’re doing

Understanding where you are now

First things first, it’s important to know what your starting point is.

Are things running and you simply wish to crank up the heat and accelerate your results? Or is your sales machine stuttering along, not sure what it’s doing, when or how?

Start by mapping out the whole process. List all the variables, including the people involved, your products and services, lead generation, sales pipeline, tools, etc.

Even just doing this can often be an eye opener. By listing out all the pieces of the puzzle, you can start to get a clearer picture of where improvements could be made. To take it a step further, rate all the different parts based on what’s working, what’s not and how well they are doing.

Why are some things working and other things not?

If you have a target, for example to increase turnover, then it’s a big mistake to just assume “we need to add more leads to the process to get more sales out”. You firstly need to understand what’s going on and whether that statement is true.

It could be that you are getting enough leads in, but your qualification process needs more work. Or it may be that more training is needed when it comes to closing deals. 

It won’t always be an easy task to decipher the problem, as there are likely to be many variables at play. The best way to approach it is to talk with the people directly involved. They will usually have a better sense about what’s going on and why.

Setting SMART goals

Once you have identified the parts of the process that need improvement, it’s time to set some goals. A good rule of thumb is to take a ‘SMART’ approach and make sure each goal ticks the following boxes:

S - Specific: the clearer the goal is, the easier it will be to find ways to achieve it

M - Measurable: how will you know when you have achieved your goal? Put a number to it and measure progress

A - Attainable: do you have all you need to achieve the goal? From tools, to personnel, processes and materials

R - Realistic: there is a case to be made for “BHAGs” (big hairy audacious goals, a term coined by Jim Collins) but that’s not what we’re talking about here. As far as sales targets are concerned they should be ambitious and stretch you, but must still be realistic. If your goals are impossible, frustration will quickly creep in. Equally, if you have a big goal then break it down into bite-sized chunks that will be easier to achieve

T - Timely: set a timeframe for each goal i.e. a specific date by which they need to be achieved. This will help you plan. Work your way backwards from the goal to the present day, considering what needs to happen at each stage. Then add in dates that are both realistic and attainable.

A driver for motivation

Along with gaining focus, motivation is another important side effect of effective goal setting.

Researchers looking into what motivates people found that being able to achieve goals was a big factor, as there’s something hugely satisfying about setting your own goals and going on to achieve them.

Schools are one place where this modern learning model is being used. It empowers students by encouraging them to develop their own learning goals and to work out how best to reach the result they’re looking for.

Just remember, in sales it’s not all about the individual. It’s important to identify team goals, as well as individual targets. You should be encouraging a supportive culture of camaraderie and positivity, to get the best out of people. This doesn’t mean you can’t have some healthy competition but you are ultimately ‘all in this together’ and the success of individuals will impact on the success of the team.

It will also take more than just numbers to keep the team motivated and hungry for success. Don’t expect to just put some targets down and let them get on with it. Consider all the other factors that can impact on motivation too.

Identify measures to achieve goals

Every business needs a plan for where it’s going and by when. Your sales performance will, in nearly all cases, play a very strong role in these goals. So once you have analyzed your process thoroughly and set some goals, it’s time to figure out how best to achieve them.

Ask yourself, what needs to happen in order for you to achieve your goals?

For example,

  • Do you need more leads or better quality leads?
  • Do you need to work on securing a higher closing rate?
  • Do you need to achieve higher turnover per customer?

Once you know what sales needs to do to help the business achieve its goals, then you can break that down into individual steps that need to be taken.

List out everything that comes to mind. Brainstorm ideas with your own team and with other departments too. It can be a good time to get the marketing and sales team together in a room to thrash out ideas and check they are aligned in their thinking.

Here, your aim should be to list all the activity you need to complete to reach your goals. Keep things open at the start and try not to overthink the ideas, just let them flow. Most may end up not being viable, but you don’t want to stall your brainstorming.

Once you have a big list together, the senior team should sit down and vet every idea, in terms of their potential to help reach the goals.

In the end, you should have a list of strategic and actionable steps in front of you, that will help you achieve the overall sales goals. It could be a short list, or a long list - it doesn’t matter. What is important is that you now have a clear path towards reaching your goals.

Celebrate all wins

Make sure you’re celebrating every win - both the big and the small. In some sales departments, a bell will be rung when a new sale is made. While that’s not going to be feasible for every work place (especially if you have wins going on every minute!) it is an example of how you can make a public display of success.

You don’t just have to focus on sales being landed either. There are loads of little steps that are taken before a sale is closed and it’s important to acknowledge these too. Setting up individual goals and action lists and celebrating these wins, as and when they are achieved, can be very motivating too.

Don’t worry, you don’t have to break open a bottle of champagne every time an appointment is booked! Do whatever works for you. Get team members to speak up and share, then do something small to register the win and move on.

The little voice we all have in our heads is usually very strong for those who sell for a living. Celebrating the little wins is one way to bypass doubts and negativity, and help people stay motivated.

The main thing to realize is that as humans, we need goals and targets to keep us going and reaching for more. It is what gives us focus and motivates us to move forward with a purpose. That is true for everyone, but especially on the sales floor.


how to plan sales goals for the next year

Topics: B2B sales, Open Sales Conversation

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