How to Set Better Sales Targets

Setting goals and targets is one of the most important components of improving revenue and making sure your sales teams are performing optimally. There has to be a balance achieved with sales targets, however.

You have to find that line between sales targets that are going to be motivating and effective but also making sure that sales targets aren’t so difficult that it causes sales employees to lose steam.

sales targets

Sales goals and tracking sales targets also need to be more than just having employees meet quotas. If your sales goals are only about quotas, then reps aren’t necessarily going to be improving their performance over the long-term.

So what should you know to improve how you’re setting sales goals and even tracking those targets?

The following are some things that can help you set better sales targets and goals for your team, which will help them and in turn, the entire organization.

Base Your Goals on Data

When you’re looking for the balance between goals that are inspiring but not so much that they’re demoralizing, you can go on feeling and instinct, or you can go on the numbers. Maybe you combine it and do a little bit of both, but data is incredibly important to integrate into your goal-setting.

Look at past data to see things like growth rates and rep performance. You can then use the larger more overarching data and pair it with the different inputs that are in the hands of the sales reps and see how to create targets.

Make Sure You Review Goals Often

When you’re setting goals, you can’t put them on autopilot. You should be reviewing them weekly at a minimum, and some sales team leaders will tell you’re they’re reviewing goals every day. By reviewing them frequently, you can make changes as you go based on the facts and information that’s coming in each day or each week.

Also, if you’re encouraging your team to review goals daily, it can keep them focused and help them break the goals into smaller, more manageable objectives.

Align Monthly Goals with Annual Goals

Take a look at annual sales goals, and then find out how to put those in line with annual revenue targets. For example, take the annual revenue target for the company, and then dissect that so you can see how much each department, team, and rep is going to need to do to make that larger goal happen.

Remember to account for seasonal shifts that can affect things like how many people are on the sales team or could cause slowdowns in business.

Waterfall Goals

Waterfall goals mean that you’re slowly increasing sales targets rather than doing it all at once. It’s somewhat like the idea of reviewing sales goals daily to see what small steps can be taken toward achieving each larger goal.

With waterfall goals, it helps prevent the potential for burnout that can happen if you’re increasing things too quickly.

Along with making sure you’re increasing goals strategically, you also want to set priorities for each specific goal. You want your sales reps focusing primarily on the highest-value goals at any given time.

Even if an employee doesn’t meet every single goal, at least they can know they met the ones that were most important.

Other Considerations

When creating goals, these are some other things to keep in mind and take into consideration.:

  • You have to think about your business situation. You have to think about the factors that might be outside of your rep’s control that is going to affect your business every month, every quarter and every season. You have to look at life cycles for your products and portfolios to create realistic, attainable objectives.
  • You also have to think about more macro factors as you create sales goals. What are the economic forces that might be within your industry or sector or maybe are affecting the economy as a whole? What’s the competition in your industry looking like currently and what are future forecasts?
  • You’ll need to segment and score your sales reps so that you can know on a micro level how to set goals and targets for each individual.

Finally, ask for feedback from key stakeholders in the process. You may be surprised by how helpful their feedback is in understanding how to set the right kind of targets and goals for your sales team. Too often, sales managers don’t take into account the feedback from the people who are going to be responsible for reaching these goals.

Dragan Sutevski

Posted by Dragan Sutevski

Dragan Sutevski is a founder and CEO of Sutevski Consulting, creating business excellence through innovative thinking. Get more from Dragan on Twitter. Contact Dragan