Effective sales goals are extremely important for any sales team to be successful. Clear goals not only offer defined targets but also help reward excellent performances. They motivate your sales staff, encouraging them to think outside the box and come up with more efficient work techniques.
However, focusing only on numbers isn’t probably the best kind of sales goal. You also need to look at the long-term goals of your company. Your sales team may end up chasing unprofitable, high-churning leads only to meet the numbers.
They may even end up overpromising, which could have serious ramifications for the reputation of your brand. The ideal sales goals are lofty yet attainable. They are aspirational but realistic.
So, how do you set effective sales goals for your sales team?
1. Set Monthly Sales Goals
Your sales plan should be customized to meet the specific needs of your company. When setting personal or team sales goals, they should align with your annual sales. You can set monthly or even weekly sales goals.
However, refrain from settling on vague goals because goals that are too broad and lack specificity end up wasting time. Even if you are setting long-term goals, ensure that they are not vague.
For instance, “increase revenue” is vague, but “increase revenue by 10% in 1 year” is specific. Accountability plays a key role in the “achievability” of your goals. People who set actionable tasks for their goals and report weekly to their peers achieve 40% more than those who do not.
Long-term goals are necessary, but smaller goals are also extremely important to keep your team motivated. Frequent small wins boost employee morale. That is why you need monthly goals. For setting monthly sales goals, work backwards from your annual sales revenue target.
It will help you determine how much your sales team and individual sales reps would need to sell to meet annual sales goals.
2. Use Data to Guide Your Sales Goals
Using data to set sales goals makes them more effective. When setting goals, you should look at the past performances of your top reps and historical growth rates.
Say you are setting individual targets for your sales reps. One of your reps takes 10 calls to close a sale, so their close rate is 10%. It means that if they need to close 50 deals, they would need to make 500 calls. If you break it down into smaller goals, the rep would need to make around 40 calls a month or 10 calls a week.
When you break down your annual target into smaller chunks, it creates a sense of urgency in your teams, and they start working towards their sales goals right away.
3. Increase Targets in Phases
If you are onboarding new sales reps or implementing new goals, don’t increase targets abruptly.
For instance, if your sales reps are making 25 calls a week, don’t double their weekly goal to 50 immediately. It may not be possible for them to meet double the target, which will only make them fearful of the target.
Missing targets can hamper your employee morale, which is never good for sales. You need motivated individuals for targets to be hit consistently. Instead of doubling their call target from 25 to 50, raise it to 30, then 35, and so on.
92% of customer interactions happen on the phone. As you slowly increase their sales target, they will get into the habit of making more calls in the same time frame. You will not only get higher quality work but also boost motivation. Your team will have enough time to ramp up the quality and will also not experience burnout.
4. Empower Your Sales Team
Revenue should not be the only focus when you are setting goals for your sales team. The goals you set should motivate your team to perform better and go the extra mile. Provide a framework of support that will empower your sales team to do better.
You could speak to your sales team to understand the areas that they would like to improve.
Something as simple as providing refresher training to improve product knowledge could tremendously improve their confidence. You may also increase your marketing budget to generate more leads for your sales team. Proving ongoing training and support can not only help your team meet company goals but also their personal and professional goals.
Providing training and support also makes your team feel that you are willing to invest in them, which makes them feel valued.
Did you know the ROI for sales training is about 353%? For every dollar that is invested in training, you get a return of $4.53. By encouraging your team to grow professionally, you get better performances helping you consistently meet targets in the long run.
5. Ensure That Your Goals Are SMART
Your sales goals will not be effective if they are not SMART– Specific, Measurable, Attainable, Relevant, and Time-bound.
Your goals should be “Specific,” which means that your sales team should be clear about what is expected of them. It should also be clear to them which metric, such as sales totals or close rate, you are using to judge their performance.
The goals you set must be “Measurable.” For instance, setting the target as a “high sales total” is confusing. Instead, the target should give a definitive number for the sales total that your team should aim to achieve.
Your goals should be “Attainable,” but that does not mean that you cannot set high goals. However, the goals should be reasonable and, most importantly, realistic. Realistic goals boost employee morale and lead to better sales performances.
The sales goals should be “Relevant,” which means they should fit within your company’s larger plans. It means that your goals should be aligned with your marketing budget and production capabilities.
Sales goals should be “Time-bound,” which means there should be a clear timeline for achieving the goal. A specific timeline ensures that your team is more focused as it creates a sense of urgency in them.
6. Convert Targets into Activity Goals
Converting your targets into activity goals is another way of making your sales goals more effectively. For instance, if your sales reps need to sell X units this month, you could consider converting them into actionable goals.
For doing so, you need to first look at their historical performance to figure out the number of calls, emails, or meetings they need to meet their targets.
Say a sales rep needs to sell 4 units to hit quota. They can sell a unit by making 10 calls. It means they will need to make at least 40 calls to sell 4 units. You could set a daily call target for your reps, which will eventually help them meet their sales targets.
7. Incentivize for Meeting Goals
Incentives, bonuses, and other rewards are important to ensure that your team continues to deliver the best results.
90% of top-performing companies use some sort of incentive program to reward their sales team. However, don’t wait for long-term goals to be achieved to reward your team. Instead, think of ways to acknowledge smaller achievements, including weekly targets or activity goals. Doing so ensures your sales team remains focused and develops the right behaviour to meet sales targets.
It will also help you set stretch goals for your team, which can be very effective. However, stretch goals don’t work for everyone. If a sales rep is struggling to meet this normal goal, setting a stretch goal will only add to the anxiety. However, high performers will be extra motivated to go beyond their goals.
Incentivizing them could double the motivation. For instance, you could keep a cash reward for selling X number of units. For every two units that a sales rep sells over and above that gets extra money. You can get creative and come up with several ways to motivate your team to do better.
8. Make Adjustments When Needed
If you want a successful sales team, you must be ready to make adjustments to your sales goals as and when required. An unexpected event during a sales campaign may require you to adjust your sales goals. You may need to adjust sales targets to keep them realistic and attainable.
Sales goals should be such that it motivates your sales reps to give their best performance. However, you can only make the most of it if you efficiently monitor the goals as well. If a sales rep is struggling, speak with them and offer support before it starts affecting your monthly or long-term team goals.
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With its amazing feature set, you will also get a team of experts to guide you in every step of your journey.