How to set smarter sales goals for your sales team - Part 1

 

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You may have a brilliant, inspiring company vision and be headed in a great direction. However, when it comes to your sales growth, if you don’t have detailed, specific sales goals to complement your vision, your sales won’t be able to get your business to where you ultimately want it to be.

It goes without saying that sales goals are an essential part of any successful sales operation. Not only do clear objectives let you monitor progress, develop focused selling strategies and improve overall performance, but they also help motivate your sales reps and improve the likelihood that your team will meet the objectives set for them. They enable reps and provide more accountability, which in turn allows sales leaders to give individuals and teams better support.

 

What are great sales goals? 

In their most basic form, sales goals are set objectives for your sales team.

Good goals center on a specific sales KPI and are often tied to overarching business goals. To give an example of such a goal, it might be increasing revenue by 15% year over year or improving your customer retention by 20% in the following year.

As a sales leader, you want to set clearly defined, strategic targets which assist individual salespeople and whole sales teams to better their performance. Doing this right and setting good sales goals can even prevent mistakes that reps are prone to making, and help course correct failed strategies.

Thinking you have one single objective and then “winging it” to get there just won’t cut it. If you don’t have clearly defined objectives (milestones) to help you along the way, you risk taking wrong turns, taking the “scenic route” as we say, or even going in the completely wrong direction. Needless to say, this will not have a positive impact on your business growth, annual revenue, and customer acquisition and retention.

 

How to write your own sales goals 

Having one aspirational overarching sales goal is not enough! Your sales goals should be achievable yet challenging enough, and the best goals are broken down into smaller chunks whereby each chunk is a smaller objective tied back to specific (and trackable) sales activities.

The formula is simply:

1) Create one main goal that is relevant to the overarching business strategy.

2) Break down this big goal into several milestones that lead to you achieving it. Ensure they are smaller, trackable and easily measurable goals set on a clear timeline.

3) This structured goal-setting should deliver incremental wins at a team and individual level.

 

How to make great sales goals SMART

Once you have decided on your main goals, you should make sure they’re smart. We’re absolutely certain that you have heard of this formula before; however, as it is such a key part of creating better sales goals, it would be a huge mistake to leave out this essential part of the process.

Smart sales goals, usually written as the acronym SMART, are data-driven objectives defined by sales leadership to guide sales teams toward an overarching objective that is easily measurable and feeds into the business strategy.

Make sure your goals are SMART by writing them in this way:

 

  • Specific: It’s not enough to say you want to increase your sales revenue. You must detail how you plan on doing that specifically. It’s better to say: “We’re going to increase our core product’s revenue using AI to feed into our consultative sales approach.”
  • Measurable: Define the exact figure you are aiming for (for example, increase revenue by $10 million). This is important in order for you to benchmark and track your performance with relevant tools (i.e., new deals closed, repeat purchases and customer churn).
  • Achievable: Whilst it’s nice to shoot for the stars, your goals shouldn’t discourage your reps. You don’t want to set objectives that are impossible to achieve. If you were only able to achieve $500,000 in revenue last year, setting a goal to bring in $15 million this year is unadvisable. Set a target that you and your team know is achievable.
  • Realistic: On the same note, make sure that goals are suited to your status quo and wider business strategy. If your product has never targeted large pharmaceutical enterprises and all your current customers are small businesses, you shouldn’t set a goal to generate 1,000 new pharmaceutical enterprise customers in three months. This might seem basic, but it’s worth mentioning.
  • Time-based: Clarify the end date. What’s the goal’s deadline? If it’s vague, the risk is that your team drags efforts on for years without much growth. To make this easier, set quarterly and yearly benchmarks since they naturally follow fiscal start and stop dates. Even monthly goals can help at the start if they make sense for your business.

With this guide in mind, you can write out your SMART sales goal in a clear, concise sentence. To make the process even easier, we’ll share a sales goal template you can confidently replicate to create your own SMART goals. It goes:

Improve [KPI] by [number or percent] by [strategy or action plan you’ll implement to get it done] within [time period].

The final step is to set up your sales software, including your analytics tool, to track your desired KPIs so that you can measure your performance as you progress toward your big sales goal.

 

2 tips to help along the way 

Now that you have the formula down, you might already have some sales goals in mind that you want to achieve. Here are some top tips for helping you get there.

 

1. Identify what you can do better 

Identify what problems or bottlenecks there might be in your current sales process. The only way to make great improvements is to succinctly pinpoint any issues that individual team members are having. Here are some examples of how to do that:

  • Review key performance indicators (KPIs)
  • Measure the gap between your top and bottom performers and between your team’s current and objective performance
  • Identify areas in the sales cycle where your leads drop off and deals are lost
  • Find the actual root cause of underperformance (look at real root causes, not just the symptoms!)

This is where analytics and tools really come into play. They help you collect insights on your sales plays faster and more accurately, so you are better able to set specific goals for your sales team and help your individual reps improve their performance.

 

2. Decide on a reasonable, achievable target

Having decided on a KPI, you want to set a clear target for your team to aim at. At this step, you will calculate your sales goals and decide on a sustainable timeline for achieving them. This includes answering the following questions:

 

  • Will you use a percent or a simple number (i.e., 15% vs. 10 leads)?
  • What is the target number (i.e., $20K or $35K)?
  • How much time will it take to reach the goal (one month or one quarter)?

Depending on how wide the gap is between your current performance and your desired outcome, you may need to set lots of smaller goals rather than a few weightier ones. This way, you can slowly but surely reach your target. If the gap is too big, it might demotivate your team and slow progress to the point where they no longer feel motivated to try. After this, you will want to create the action plan, including the steps you will take to achieve your new sales target.

Let’s look at some example goals and how to achieve them.

 

How to achieve your revenue sales goal

Quite naturally, a revenue target, such as “increase revenue”, is the baseline sales goal example. Let’s take a typical sales goal: increase month-over-month/year-over-year revenues by 10%.

More specifically, your overarching goal might be to increase MRR (monthly recurring revenue) by 15% within six months by improving upsell and personalizing the sales pitch to each customer persona.

It’s really up to you how and against what timeframes you set this up. You can set revenue growth targets monthly, annually or both. What will be helpful is having one overall revenue goal for your entire team, and then, as previously mentioned, breaking this down into smaller, individual sales goals for each of your reps.

 

Calculate sales revenue this way

You will most likely already have a tool to automatically calculate revenue KPIs and sales goals, so you shouldn’t have to do this on your own manually. But, if you’d like to, or if your tool for some reason does not do this, here’s the formula to use:

Number of Product Sales x Unit Price of Each Product Sold = Revenue

Note: If you sell several products at different price points, you will need to add up the total revenue for each product to get the overall sales total.

 

How to achieve your revenue goals

As a sales leader, you’ll be used to finding creative ways to increase revenue. This takes innovative tactics and the right strategy – but good ol’ cold calling and emailing work too. Plus, this increases the number of leads going into your funnel.

The goals you prioritize will naturally have a higher chance of being met. If you have an overarching revenue goal, this will probably be at the top of the priority list, and should be what your team spends most time focusing on.

Again, here it helps tremendously to break down the big goal into manageable chunks, such as activity goals, in order not to overwhelm your team. These could include:

 

  • How many demos each rep conducts during a week.
  • How many calls each rep should aim to make per day. You can use available data to qualify your quotas. For example, it might take 100 calls for an SDR to get one qualified and scheduled meeting.

Manual tactics are great, but let’s not forget that combining them with an integrated sales enablement (empowerment!) solution will also improve your team’s chances of meeting many goals. In fact, since revenue goals are such a priority and can be quite complex feats, a good tool is vital. Let’s see how a tool like this can help.

 

How can software help you achieve your sales goals?

A sales enablement solution that’s seamlessly integrated into your CRM will help reps easily track their goals, be clear on where all the opportunities are at any given time, and better execute their daily activities. 

Not to mention, a good sales enablement tool will facilitate sales training and coaching, allowing your reps to up-skill and improve their skills when they need to.

You can also set up data-driven sales goals and track them as you go. By identifying key milestones and events that help move prospects along the buying journey, you can focus your marketing and sales efforts in the most productive places.

By tracking every touch point, from logged calls and microsite visit duration to field time spent in-app, and via integrated sales analytics, you can see how these metrics correlate to sales. When you break performance down by different channels, you can see the ROI for your sales and marketing spend.

A sales enablement tool can also help you collect and consolidate customer data from various channels, which is crucial in our omnichannel world. Customers interact with companies across multiple channels, so you need to be able to tap into each channel, normalize the data so that it’s consistent, and consolidate it into one central platform for more comprehensive analysis.

Pitcher does all of the above and much more. Other benefits include: 

 

  • Real-time data visualization: Helpful if you want to see your key metrics at a glance to ensure you’re on track. Data visualization makes it easier to absorb information and notice anomalies. When something requires further investigation, you also want to be able to look closer for further analysis.
  • Customizable dashboards: These highlight different functional areas and track different metrics depending on their job and area of responsibility. You need to be able to customize your dashboards any way you want so each team member can measure what’s important to them. You can do this with Pitcher.

Closing thoughts 

Sales goals actually bind your sales team together and make them aware that you’re all working toward the same goal. Having said that, it’s not easy to set effective sales goals for your team.

It takes conscientious planning and finding a healthy balance between the company’s wider objectives and your sales reps’ capacity. But using the above-mentioned SMART goals, breaking them down into manageable milestones, and solid coaching and training helps you to achieve goals in a quicker and easier way.

In the second part of this blog series, we’ll give you some top tips and examples of sales goals.