Back in 1979 a class of students were asked if they had set written goals and created a plan for their attainment. 84% of the class responded no, 13% said they had written goals but no plan, and finally 3% said they had written goals with a clear plan. 10 years later the 13% that had written goals were making twice as much as the 84%, better still the 3% that had written goals and plans were making ten times as much as the other 97% of the class. Harvard MBA Study
This sounds like common sense when you think about it. How many of us have set new year resolutions to lose weight and by the end of January we can remember our goal, but by the end of June most of us will have forgotten it. Those that succeed are those that remember to break this down into little steps, e.g. I will exercise 3 times a week for 30 minutes. Then increasing that target to 5 times a week for 30 minutes.
In business, unrealistic goals such as ‘increased sales’ will not be useful. You won’t be able to forward plan to grow your business and you won’t be able to measure your success against such a vague target. So, time to be honest with yourself. How many of you reading this article have set specific targets for sales in their business? If you have already then you are already halfway there, the next step is to make this into a plan so read on to see what this looks like. If you have no specific sales targets it may be that you’re a new business or that you aren’t sure how to set them. Keep reading to find out how you would set sales targets for your business that are meaningful.
Top tip #1. Have a specific goal.
The easiest way to do this is to have a monthly goal. To work out your monthly goal start backwards with your annual revenue target. This will be affected by lots of different factors, spend a little time thinking over these before deciding your annual revenue target:
- Product pricing
- Business industry
- Existing clients
- Prospects in pipeline
- Daily lead generation
- Product ecosystem (products in your range)
Once you’ve gone through all of the above then calculate your annual revenue target. Then break this up into monthly revenue target. Let’s say your annual revenue target is £70,000 per year and your product has a fixed price of £100. You need to sell 700 units at that price or rather 59+/- each month. So, the calculation is annual revenue target divided by fixed unit price and then divide that amount by 12 to get the monthly number of units to sell. If your business sells a range of products, then use previous sales figures to work out a percentage of sales for each product to feed into your monthly sales amounts.
Top tip #2. Understand the reasons for setting this goal.
This links very closely with the factors affecting your sales goals as mentioned in top tip 1. However, it converges slightly because it is linked to your personal as well as professional goals. What is your reason for setting these sales targets? Is it so you can splurge on a company car, is it so you can move into a bigger home or is it to enable you to take on extra staff members. Whatever the reason it is important to have this clear in your mind. This facilitates your road to success. If this reason is clear in your mind you are more likely to have better self-management of this goal, working on smaller steps to achieve the large goal.
Top tip #3 Have a plan.
It’s important to remember to flip the script. You’ve identified that you want to make 59 sales each month which is a very clear goal to have but let’s turn the table on it. We started by working backwards with the annual revenue goal. Let’s do the same with your sales goal. Use your previous month’s sales figures to work out how many calls and emails you have to make to achieve your monthly sales. (Don’t worry: if you don’t have this figure then spend the next month keeping a simple log).
For example, if it takes you a combined 100 calls and emails to make 4 sales then you know that your close rate is 4% (total sales divided by sales leads multiplied by 100) so if you wanted to achieve 6 sales then you need to make a combined 150 calls and emails. Focusing on making 150 calls and emails may be more effective than focusing on making 6 sales as it really takes you down to the ground level of what you should be doing on a weekly and monthly basis.
Top tip #4 Take action to achieve your goals.
Now that you are aware of your monthly sales goals and your number of sales leads you need to reach to make your sales goals you can work on making this happen. Look carefully at your weekly plan, calendar, timetable or schedule. However, you plan out your week block in some time to speak to suspects when they are available. Research shows the middle of the week in the afternoon is the best time to call.
Top tip #5 Adjust the goal as you go along.
Part of an effective business is having a sales goal and using that to plan how many sales leads you should be contacting each month. This isn’t where your homework ends. The next logical step in this cycle is to track and adjust this sales goal.
You drown not by falling into a river, but by staying submerged in it. Paul Coelho
The key to succeeding is tracking and adjusting. If you are over-achieving, then perhaps you can look again at your close rate and recalculate how many sales you want to achieve in the next month. Maybe a moonshot goal? If you had a bad month previously then use your close rate to increase how many sales leads you make, remember the example above with 150 calls/emails to make 6 sales.
Don’t be afraid of sales, or of setting sales goals. Make targets that are realistic, attainable and fit your business industry and model. To find out more come and join The Sales Growth Club. Within this coaching community you’ll be able to connect with other members, post your own relevant content on the newsfeed, join a Live Weekly Webinar, structured lessons and so much more.