The Right Approach To Setting Sales Goals

As a sales manager, the success of your sales team depends on many factors; having the best talent, the right leads and a proven sales process will all contribute toward greater sales revenues. However, even the best managers often ignore one crucial element – the importance of setting data-driven goals backed up by sales analytics. Having a set of clear-cut goals – both long- and short-term ones – keeps your team focused, provides direction, sets priorities and helps reps concentrate their time and effort for maximum productivity.

Setting the right goals requires more than just simply pointing to a final achievement and demanding that your reps reach that level. Poorly-set goals are often too unrealistically high, not challenging enough, poorly allocated or are just too vague. The best goals start by following the SMART acronym:

– specific M – measurable A – attainable R – rewarding T – timely

Setting sales goals should also be approached from a top-down perspective. Start with your Holy Grail in mind – this could be a quarterly revenue figure, an expansion number, or any other lofty final goal – and work your way down, filling in the input-based steps necessary to achieve this goal.

For example, let’s say your goal for the quarter is to reach $2 million in revenue. Your historical data and conversion sales metrics suggests that closing 200 deals would get you to that figure. Your sales funnel tells you that for every 10 demos your reps book, 2 deals arise. Daily activity metrics show that it takes your reps approximately 35 calls to book a demo. Now, working backwards, you can figure out how many calls each of your reps have to make everyday in order for your team to hit that $2 million revenue figure. Along with having your team’s long-term goal, you have now also clearly established SMART short-term goals for your reps in the form of daily activities.

The importance of daily activity goals cannot be overstated. While ambitious goals and lofty visualization exercises can positively affect performance, daily activities can have a more direct impact and should not be eschewed. Switching your reps’ mental focus from long-term goals to more immediate activities – focusing on the little things, doing the right things at the right times – creates a sense of trust in the overall process.

Consider the analogy of climbing a mountain. When you begin, you look up at the peak and envision yourself planting your flag up there. However, when you actually begin climbing, constantly keeping your eyes on the peak will surely result in a disastrous fall. Instead, you have to simply keep climbing the right way, by reaching for one rock in front of you and taking one step at a time. Trusting in the process – making X amount of the right calls a day, for example – will help your entire team reach its collective goals.

Give your reps specific, attainable and timely goals by relying on your sales cycle for appropriate productivity activities. There is nothing stopping them from making 60 calls each day, regardless of how well or how terribly each call goes. The rewards for making these goals should manifest themselves, either in the team success of having a call that leads to a demo and a deal, or merely in the reps’ self-satisfaction of having reached that daily goal. Finally, make sure that all your team’s goals are measurable. Track activities through your CRM system to identify your best (and worst) reps. These type of SMART goals, when reinforced regularly, will result in a motivated team that executes small-scale plans to reach long-term achievements.

How does your sales team approach goal-setting?