Setting goals for your sales representatives is an important part of helping your reps-and your organization-reach its full potential.
But what exactly should sales goals look like? How should these goals be set?
Sure, it’s easy to say, “Let’s sell more!” But, that’s not a detailed process. And, there’s more to helping your sales reps succeed than just telling them to get out and sell. Just like all business goals that you set for your team, your sales goals need to be well-thought-out and relevant. Otherwise, they will not inspire your sales reps to do their best.
Let’s take a look at the basics of setting goals for sales staff.
The Importance of Setting Sales Goals
It’s important to set goals for your sales associates for several reasons. First, it helps each employee to reach his or her full potential. As a leader, when you set goals for the role, you can best identify, without bias, who may be suited to the job, and who may not. Numbers do not lie, and in sales, goals provide clear data that can provide insight as to who is performing well in the role, and who is struggling.
Finally, from a revenue perspective, it is important for the broader health of your organization to know how much revenue the sales department will generate. Setting goals can help with this effort. Historically, is Quarter 1 a strong quarter, or is it weak? Is Quarter 4 the best quarter? Having data based on the trends in your industry can help you create goals that are realistic for your type of business and the seasonal demand for your product.
Types of Sales Goals
Before you create your goals, make sure they’re SMART: Specific, Measurable, Achievable, Relevant, and Time-Bound. Goals that are too easy or too hard defeat the purpose. Learn more about making your goals SMART with our resource on SMART Business goals.
And, an interesting part about sales goals is that not every sales goal equates to“selling more products.” For example, a salesperson might excel in the area of activity sales goals, even though this goal is more related to professional development than actually selling.
- Activity Goals: The harder you work, the luckier you’ll get. Activity goals don’t measure how many sales you made, but how many calls you made or how many attempts you made. Or, it could count the number of times a rookie salesperson shared something on a blog or social media channel. These activities boost the salesperson’s reputation, which can eventually help them make sales.
- Improvement Goals: These goals can be set collaboratively between employees and their leaders. And, even better, they can be customized according to each employee’s individual interests and strengths. These are professional development goals that might have an employee complete different milestones, like listening to a podcast on sales, joining a networking group, attending a sales conference, reading a book, or doing another activity that will help with job performance.
- Size Goals: An ambitious goal, these goals focus on each type of sale. Size goals aren’t for the salesperson who has yet to make their first sale. These goals strive to increase the amount of each sale.
- Stretch Goals: These goals are only for those who are already meeting their numbers. Think of the cream of the crop of the sales staff who need a challenge. Stretch goals are higher goals meant to challenge people who need a challenge. These are only for your high performers.
- Team Goals: Sometimes, creating a departmental goal, rather than just individual goals, can accomplish something bigger. Creating teams of sales staff and measuring their progress can help you monitor progress. It can also provide opportunities for collaboration, and for team members to learn something from each other.
Examples of Sales Goals
Knowing that there are a variety of sales goals to choose from, you can implement the most appropriate goal for your sales staff.
Here are a few examples of sales goals you can choose from.
- Activity Goals: All sales staff will make 25 cold calls per day.
- Improvement Goals:
- Team members will choose a professional development activity of their choice: read an article, listen to a podcast, or attend a Lunch-and-Learn related to sales. A summary of what each team member learned will be presented to the team during the monthly Team Meeting.
- Size Goals: The Sales Department will strive to increase each sale by 10%.
- Stretch Goals: John and Nancy, our top performers, will each increase their sales by 50%.
- Team Goals: The Sales Department will split into two separate teams. Each team will collaborate to create strategies for how to increase sales and increase our local market share.
Below are some other goals that you can set for your sales representatives.
Reach Max Commission Payout at Least Once a Year
Most salespeople are driven by the possibility of earning commissions and bonuses from their sales. For many, this is the primary reason why they choose. This is why maximizing commission payout at least once a year is a tangible and motivating goal for them.
Achieving this milestone not only boosts income but also serves as a benchmark for personal achievement and professional growth. To reach the maximum commission payout, sales representatives need to set a strategy and focus on the goal.
To reach a goal like this, sales representatives need to focus on high-value deals and enhancing client relationships. They should also focus on upselling or cross-selling opportunities. Keep in mind that this lofty goal is not right for everyone. Some sales representatives are fine with making the minimum payout needed to keep their jobs or pay the bills. However, if you have an ambitious sales representative on your team, this would be a great goal to challenge them to go further.
Improve Product Knowledge
Expanding product knowledge is paramount in enhancing the effectiveness of sales strategies and achieving higher sales goals. A deep understanding of the product’s features, benefits, and unique selling points allows sales representatives to communicate more confidently and persuasively with potential customers. It equips them to address queries more effectively, showcase the product’s value, and differentiate it from competitors.
Sales professionals should engage in regular training sessions, product demos, and workshops to stay updated on the latest product developments and innovations. This continuous learning process enables them to align the product’s capabilities with the customers’ needs accurately. Improving product knowledge is not only a great sales goal but it can also help the business reach its customer service goals.
Also by gaining insights into the product’s applications across various scenarios and industries, sales representatives can tailor their pitches to resonate with the specific interests and challenges of each prospect. Interactive learning tools, such as virtual reality demos or interactive product guides, can enhance understanding and retention of product knowledge.
Improve Closing Ratio
Improving the closing ratio is a critical goal for sales representatives. A closing ratio is a metric used to compare the number of sales prospects your sales team engages with to the number of deals closed. For example, if you called 100 leads and closed 15 deals, then your closing ratio is 15:100. This ratio directly impacts the overall success and profitability of the sales department. A higher closing ratio means that a larger percentage of leads and prospects are being converted into paying customers.
To achieve this, sales representatives need to focus on enhancing their sales skills. They also need to understand customer needs better. Knowing which customers want what the company has to offer can help salespeople stop wasting time on unqualified leads.
An underrated factor is how quickly salespeople can respond to inquiries and overcome objections. This can help in keeping the momentum going, thereby reducing the time it takes to convert a lead into a customer.
Reduce Customer Churn
Reducing customer churn is paramount for sustaining growth and ensuring the long-term success of the business. It’s much more cost-effective to retain existing customers than to acquire new ones.
Sales representatives play a crucial role in customer retention by building strong, ongoing relationships with clients. This involves regular follow-ups, understanding and addressing customer concerns promptly, and continuously offering value.
Implementing a customer feedback loop can also provide valuable insights into the reasons behind customer churn, allowing sales teams to address these issues proactively. Moreover, personalizing the customer experience and offering loyalty programs or incentives can further enhance customer retention rates.
Implementing Sales Goals
As a leader, you’ll either cascade the goals set by those above you or implement goals you’ve created yourself.
In either scenario, it’s important to communicate the expectations around these goals. You’ll want to consistently monitor progress and how you can help your team perform at the highest level.
You may want to consider how you can educate those who are new to sales on sales techniques that they should use. Equally important is educating them on sales techniques that they should not use.
Conclusion
“Always be closing” may be the motto a salesperson lives by, but setting goals is an important part of building and maintaining momentum for any sales department. Looking beyond just the transaction and creating a strategy can increase your revenue, build your staff’s skills, and create a solid foundation for sustainable growth.
Also read:
Aligning Employee Goals with Company Goals
20 Business Goals Examples For Employees
