As a company owner, one of the most important aspects of running a successful business is setting and achieving sales objectives. But how do you determine what those objectives should be? Here’s a step-by-step guide to help you set realistic and achievable sales goals for your business.
Sales objectives are goals a company sets for its sales team to achieve over a certain period. These objectives can be anything from increasing revenue by a certain percentage to selling a certain number of products or services. Sales objectives should be set annually, but they can also be set for shorter periods such as quarters or months.
Let’s talk about the basic steps first.
- Define your overall goal.
- Break down your overall goal into smaller, more manageable goals.
- Create a timeline for each goal.
- Assign responsibility for each goal to a specific team member or department.
- Measure progress and revise objectives as needed.
- Celebrate accomplishments and learn from failures.
- Define your overall goal.
Sales goals are essential for any company regardless of size. They give you a target to aim for and help to motivate your sales team. Without a goal, getting complacent and falling into bad habits is easy.
It’s essential to clearly understand your company’s sales process before setting a goal. You need to know your closing rate, average deal size, and how many leads you need to generate to hit your target. Once you have this information, you can start to play around with different numbers to see what’s realistic.
1. There are a few different methods you can use to come up with a goal.
The top-down approach starts with the total revenue you want to generate and then works backward. For example, let’s say you want to generate $10 million in revenue. From there, you need to figure out how many deals you need to close at your average-sized sale.
Another approach is the bottom-up method which starts with the number of deals your sales team can realistically close in a year. From there, you would need to figure out the average deal size and total revenue.
The third method is called the market-based approach, which looks at what your competitors are doing and tries to match or exceed that number.
Defining your annual revenue goal might seem daunting, but it doesn’t have to be. By taking some time to understand your sales process and using one of the three methods described above, you can quickly develop a number that will work for your business. And remember, if you’re not sure where to start, there are plenty of people that can help you. Drop me a note in the Contact Me portion of this site, and I will happily give you some insight into solving this problem.
2. Break down your overall goal into smaller, more manageable goals.
When it comes to goal setting, many sales managers or CEOs make the mistake of thinking that bigger is always better. They believe that by setting a large goal, they will motivate their team to reach it. However, this isn’t always the case. In fact, placing an overly ambitious goal can frequently do more harm than good.
If a goal is too large, it can seem unattainable and even overwhelm the salesperson trying to achieve it. This can lead to discouragement and a lack of motivation. When this happens, the chances of actually achieving the goal diminish significantly.
As Harvard Business Review explains, when 10%–20% of salespeople miss goals, the problem might be the salespeople. But when most salespeople miss, the problem is their goals.
Unrealistic goals dampen sales in the current incentive period. Once salespeople realize their goal is unattainable, the quality and the quantity of sales effort diminish. Many salespeople even hold over sales until the next incentive period, hoping those goals will be more attainable. This tactic makes sales for the current period even lower than they would have with more-reasonable goals. Daniel Markowitz has suggested that unattainable stretch goals are demotivating and can foster unethical behavior and excessive risk-taking.
Unrealistic goals create yet another issue that can be even more serious. Top-performing salespeople, the ones your competitors seek to poach, quickly become frustrated with out-of-reach goals, becoming more likely to leave the company. Poor performers stick around. Eventually, management can’t judge the quality of their salespeople. This lack of perception happens because it is difficult to tell who is missing a goal due to a quality or performance issue and who is falling short because the goals are unrealistic.
The situation worsens when managers give a disproportionately large share of an unrealistic goal to the salespeople they believe are the strongest performers. Weak salespeople get lower goals, which causes strong salespeople not to be rewarded sufficiently. Strong salespeople observe weak salespeople making more money for less work, and the impact on morale can be devastating. Over time, more good salespeople leave, and sales force quality steadily declines.
3. Create a timeline for each goal.
In the business world, timing is everything. If you’re too early to the game, you risk losing out on market share to your competitors. But if you’re too late, you might struggle to catch up. That’s why creating a timeline for each company goal is essential. By mapping out a plan and timeline for each objective, you can ensure that your team is staying on track and progressing toward your goals.
Creating a timeline for each company goal gives you a roadmap to follow as you work towards achieving your objectives. It allows you to see at a glance what and when items need to be done. This kind of visualization can be beneficial in keeping your team focused and on track.
In addition, having a timeline for each goal allows you to measure progress and identify potential roadblocks. If you’re not making the kind of progress you want, you can adjust your plans accordingly. And if you encounter any obstacles along the way, you can zero in on them and take steps to overcome them.
There’s no one-size-fits-all approach to creating a timeline for each company goal. The best way to develop a timeline will vary depending on the nature of the goal and the resources available to achieve it. However, some general tips can help you get started:
- Start by breaking down the goal into smaller, more manageable pieces. This breakdown will make it easier to map a timeline and identify milestones.
- For complex goals, it can be helpful to create both short-term and long-term timelines. This will give you a better understanding of what needs to be done in the short and long term.
- Once you understand the individual steps in achieving the goal, start creating a timeline that outlines the completion date of each step.
- Be realistic in setting deadlines and consider factors like the availability of resources, potential roadblocks, etc.
Achieving business success requires careful planning and execution. One way to ensure that your team stays on track and progresses towards your goals is by creating a timeline for each company goal. Timelines provide you with a roadmap to follow, allow you to measure progress, and help identify potential roadblocks along the way. When creating timelines for your company goals, start by:
- breaking down the goal into smaller pieces,
- establish short-term and long-term timelines as needed,
- be realistic in setting deadlines.
By following these tips, you’ll be well on your way to achieving all of your company’s objectives!
4. Assign responsibility for each goal to a specific team member or department.
To successfully reach our sales goals, we must assign responsibility for each goal to specific team members or departments. This assignment will ensure that every aspect of sales and sales support is covered and will minimize potential bottlenecks or communication issues.
At the outset, we should identify which salespeople have the most experience and expertise in each area and then match those individuals with corresponding sales goals. For instance, our top sales representative might be responsible for developing new business relationships. At the same time, another team member could focus on expanding our existing client base. We should also create a designated sales manager who will oversee all aspects of sales and provide support as needed.
Another critical factor in ensuring that all sales goals are met is communication between team members. Regular meetings and updates will help to keep everyone up to date on the status of sales projects and give them a chance to voice any concerns or questions they may have. By assigning clear responsibilities and fostering open communication channels, we can ensure that our sales goals are achieved efficiently and effectively.
5. Measure progress and revise objectives as needed.
When setting sales objectives for a company, it is crucial to regularly assess progress to make any necessary revisions to revenue targets. One key factor that can indicate whether sales goals are on track or need to be adjusted is the performance of salespeople. Sales managers should consider factors like sales volume, win rates, and conversion rates to determine how effectively sales reps meet their targets. Additionally, CEOs must have accurate sales forecasts to make informed decisions about changes or adjustments to revenue objectives. Ultimately, measuring progress and revising sales targets as needed is crucial for companies to achieve their financial goals and remain competitive in the marketplace.
You may want to watch a recent LinkedIn Live webinar I put on regarding dashboards and metrics that CEOs should follow. You can watch this event here.
6. Celebrate accomplishments and learn from failures.
Becoming a sales professional is not easy – it takes significant hard work, dedication, and perseverance. To be successful in sales, salespeople must always strive to improve themselves and their skills. Successful salespeople constantly strive to become more effective at selling products and services to their customers. As such, salespeople need to stay motivated and inspired to celebrate their accomplishments – whether winning a new client or hitting a sales target.
To do this effectively, sales managers and CEOs should provide regular recognition for sales teams when they meet or surpass sales goals. This recognition can take many forms, from public acknowledgments at company meetings or award ceremonies to additional days off or monetary bonuses. By encouraging sales staff members to reflect on and appreciate their achievements, sales leaders can keep motivation levels high and help drive continued success. In other words, salespeople who continuously celebrate their accomplishments will most likely succeed long-term in the challenging sales profession.
I have an entire article dedicated to rewarding the big and little successes of the sales team. You can check it out here.
Salespeople are an invaluable part of any successful business. They are responsible for connecting with potential customers and presenting products or services that appeal to their needs and interests. Yet sales inevitably involve risks, and salespeople often face hard knocks and setbacks. To become genuine successful sales professionals, they must learn from their failures.
This feedback is where leaders such as CEOs and sales managers come into play. These individuals can serve as mentors to sales professionals, offering guidance, advice, and support based on their own experiences in sales. By learning from the successes and failures of others in the industry, salespeople will be better equipped to navigate unknown territory and achieve long-term success in their sales careers. As the old saying goes, “Experience is the best teacher.” With this in mind, salespeople must continuously seek new opportunities to learn from others’ experiences to improve their abilities as sales professionals. After all, with each new challenge comes the valuable insight that can help salespeople grow as leaders within their organizations. Hence, it is so important that salespeople embrace failure as an inevitable part of the sales process – and use this valuable experience to create further success down the line.
Communicate your objectives clearly.
Once you’ve determined your company’s sales objectives, it’s important to communicate them clearly to your team. This way, everyone is on the same page and working towards the same goal. Be sure to provide regular updates on progress and adjust objectives as necessary.
Setting sales objectives is an integral part of running a successful business. By taking the time to analyze past performance and set realistic goals, you can ensure that your team is motivated and focused on achieving success.
