Achieving a sales target is the primary goal of all sales organisations as well as all sales professionals.
You’re coming to the end of the year so it’s the right time to check that you’re correctly setting your sales targets for the next year.
Are you seeing the right levels of “buy-in”, are the sale pipelines looking full enough, is the run rate where it needs to be?
Perhaps something significant has changed since you origionally set them that you need to adjust for?
By answering the 5 questions below you will be confident to continue as you are, or you’ll know what you need to adjust for the 8 months ahead.
1) Have you set the sales targets correctly?
All sales professional expect, no need to have individual sales targets.
They expect them to be neither too high or too low as you want them to fully buy in to the “do-ability”.
Miss this tightrope on “do-ability” and you risk losing them before you even start.
Your role is to set targets that drive discretionary effort and reward them through compensation when the targets have been exceeded.
Think of an accelerator or a kicker for over achievers.
2) Should you set everybody the same sales target?
The cutting up of the annual growth plan into equal pieces is lazy target setting. It leads to endless angst and ultimately collective failure.
Spend your time appreciating the different start points for each of your sales professionals.
Overlay the data of the Sales Pipeline and agree a realistic stretch target. At least from here you can have a level of confidence that the loading and expectation you have set is fair.
You need to be able to leave each individual discussion in agreement that the targets set are realistic.
3) How do you know what a realistic stretch target is?
There are many ways to determine realistic stretch targets.
My advice is to select a method and stick to it: be it logical or practical, and assign targets that can be achieved.
I’ve already mentioned to overlay your Sales Pipeline but other considerations could be: geographical trends, previous achievement, market research, competitor intelligence, previous years sales and known losses.
4) How often should you check in on target attainment?
I believe that it is critical for Sales Managers to support every sales professional on a monthly basis in a structured performance review.
Good practice suggests that you can spend 30% looking back on a previous months performance and invest 70% looking forward.
The approach ensures you prioritise the activities required to close deals or target attainment gaps.
This practice builds a confidence so that at year end you have no surprises.
5) Have you set your sales professionals up to succeed?
Are your processes empowering, are your sales tools effective and your sales expectations clear?
I have seen on too many occasions that a set of clunky processes, sticky tools and vague expectations destroy all the good work you have done in setting realistic sales targets.
It is my belief that if you miss in any of these areas of process, tools or expectations you will be much more likely to fail than succeed.
Setting sales targets is an exercise in using data, logic, and pragmatism.
Sales Excellence Principle Number 3 – Sales Leadership
Will ensure you build the right sales behaviours and processes to support effective target setting and delivery through weekly (WILO) and monthly (MILO) structured performance reviews.