Desire → Ambition → Goal Setting → Action → Achievement (?)
Typically, that’s the workflow of a goal - right from its inception to the final stage. And you see that mysterious question mark at the end? Well, if your business goals are the protagonists of this narrative, then the sheer uncertainty held by that question mark is enough to send a shiver down your spine.
However, let’s take two steps back and focus at the core - at the center of the workflow, which decides the roadmap for your goal to follow. For the sales teams, the what, why, and how pertaining to this “goal setting” stage decides which way the journey would lead them - to the lush green side with closed deals and dollars, or to the cloudy side, where deals go dark and drain with the rain.
You see, dreaming and being ambitious are good things, but if you don’t set sales goals that are time-bound, attainable, and crucial for your business growth, you’re basically setting yourself up for failure.
So, with this post, let’s understand smart goal setting that is important for successful sales teams. We’ll arm you with actionable tips, methods, and examples of sales goals that will set you up for success.
How to set effective sales goals?
Hard work put towards an incorrect goal post is worse than not having worked hard at all.
“When 10%–20% of salespeople miss goals, the problem might be the salespeople. But when most salespeople miss, the problem is their goals,” wrote Harvard Business Review.
So before you motivate the team and roll out the incentive red carpet, make sure you have set smart sales goals in the first place. One way to do this is to look at last year’s data, consider the present business environment, and standard industry growth rate to predict targets for the next year. Another more scientific bottom-up approach could be:
- Firstly, determine the break-even point of your company. What is the amount that you need to net $0 after meeting all your financial requirements and obligations? This should include all your business expenses - salaries, workspace costs, software subscriptions, sales and marketing costs, etc. You can calculate this metric for a year or even longer, depending on the time frame you are setting your goals for or the availability of historical data.
- Once you know your break-even point, establish the profitability that you want to achieve beyond that. Take into consideration the growth in current and new markets, untapped sales opportunities, deals in the pipeline, and up-sell and cross-sell opportunities; use this info to establish your desired profit percentage.
- To set specific sales goals, you would need to factor in your revenue. Based on your break-even point and desired profitability, forecast the sales revenue that you want to generate over the required time span. You can use these most popular sales forecast methods to accurately forecast your sales revenue.
- Finally, set smart, attainable team goals for your sales team to reach that revenue figure.
However, the crux of the matter remains the same.
“How do I relate my revenue aspirations with my sales goals? What strategy should I adopt to achieve those goals and see the desired change in my sales metrics? How do I assign our sales goals to my sales team, and how do I ensure that they achieve them?”
The answers to these questions could be best found if you see them in action. In the next section, we have discussed the sales goals examples, with detailed plans, action items, and tips on how to achieve them.
5 examples of sales goals to set for your sales team
#1 "Money, money, money!"
The biggest multivitamin your business needs for survival is Vitamin M: Money. Everyone wants more of it.
But how much more? A startup, a mid-size company or a large corporation all have different expectations of growth rate. This is why you should rely on your historical data, market trends, predicted annual revenue, and all the business factors that influence it.
Breaking down the big picture numbers
Boosting the business revenue is just a top-level revenue goal every business is trying to achieve. The trick here is to dig down and unearth the opportunities that you could seize to unlock that growth. So, identify the smaller quarterly, monthly, and activity goals and targets that you can set to boost your revenue. If your customer acquisition cost is taking a huge bite out of your revenue pie, you need to reduce it. If your sales reps have a low win rate, you need to identify what is costing you that loss and implement the right measures to ensure they close more deals.
After identifying these nuances, you can further set specific, measurable, achievable, realistic, and time-bound (S.M.A.R.T.) goals.
S.M.A.R.T. sales goals examples to increase revenue:
- Increase sales revenue by 12% in the next quarter
- Individual revenue goal: every rep should generate at least $12,000 in the next quarter
- Generate $40,000 from Illinois in the next quarter
#2 Grow qualified leads
Leads that are not qualified are bound to fizzle out and take your time, money, and efforts with them. So, you need to ensure that you don’t spend a minute extra on the leads that simply won’t convert. Well, that’s easier said than done. Here’s the bang-on discovery call strategy that you need to follow to ensure that you spend your resources on qualified leads only:
- Start with your discovery call prep checklist. Research your prospect as much as you can on business platforms, their website, and the social media accounts of their colleagues and themselves. Use this information to find mutual contacts and areas of interest that you can leverage to build rapport and ask highly-targeted questions.
- Kick-off discovery with qualifying questions. Did you know that only 50% of your initial prospects turn out to be a good fit? Your goal here is to filter out the rest by asking qualifying questions to establish if the lead would qualify.
- Unearth prospects’ pain points by asking open-ended questions that address their business priorities and roadblocks.
- Ignite the need for immediate action by asking implication questions that address the consequences that they might face if they don’t solve their business problems ASAP.
- Pitch away!
#3 Minimize customer acquisition cost (CAC)
You have to go all in to acquire a client, from intensive marketing campaigns to putting your best sales rep on a deal. You just have to, because that’s how you land clients! But after all these efforts and going the extra mile, why does your revenue growth still stay stagnant?
Clearly, your CLV doesn’t hold the right ratio with your Customer Acquisition Cost (CAC). But see, I am your friend here, and I am not giving you any bad advice about reducing the efforts you put into your sales deals. I am merely asking you to analyze what’s costing the major chunk of your CAC, and figure out if it is even worth it. If it’s not, then what is? Let’s take an example to see how this situation can be rectified.
Check out this arbitrary snapshot of your expenditure spent on the sales and marketing efforts:
You may not have the same channels, but you can surely set up a similar chart for getting a detailed view of how your CAC is spread across different channels. In this example, you can see that social media campaigns are doing the trick multiple times better than the other channels. So, what’s the fix? Spending more on social media, less on banners, and way less on events. The goal to crack here is achieving the right ratio of LTV : CAC, which is 3:1.
#4 Increase your win rate
Sales win rate = Closed-won deals / Total deals in the pipeline
A sales goal that aims to increase the win rate for each sales rep ultimately helps team members close more deals and generate more revenue. Now, that wasn’t tough to crack, but achieving a high win rate is far from being a cakewalk and can often be daunting for sales reps.
It’s a common conception that the win rate doesn’t really justify the efforts put in by your sales reps as it focuses only on the end results and doesn’t consider the activity-based targets. Well, a lower win rate might be justified as long as the circumstances are out of the control of the sales reps.
But do your sales reps really have no influence over their no-decision losses? Are they not even partially accountable for the deals that went “dark”?
The truth is that they are often accountable for it but are unaware of the fact. Here are some actionable tips to avoid these situations and increase your win rate:
Reduce loss-to-no-decision rate: In the simplest words, a no-decision loss is when your client ghosts you after you have come a long way down the sales funnel and the deal was as good as closed. The good news is that you can turn this around for your future deals by following these pro tips:
- Make the decision-maker a part of your sales conversations as soon as you can so that they don’t become a roadblock down the line. If they are involved in your sales process and don’t see any potential in the deal, they will block it right away, saving you a lot of time and resources that an unqualified deal would have otherwise cost you.
- Anticipate potential sales objections and roadblocks and resolve them right in the beginning. Use your discovery call skills to tackle this and qualify your leads.
Set activity-based sales quotas: I said it was a common conception. Not a misconception. Activity-based sales goals work wonders to keep your reps motivated by aiming for smaller sales targets to crush on a daily/ weekly basis. To see quick results, you can leverage these well-curated set of cutting-edge strategies to achieve and exceed sales quotas and boost your win rate.
#5 Increase Customer Lifetime Value
Here’s the reason why this goal should be on your top-five sales goals list: the probability of selling to existing customers (60-70%) is so much higher than that of new customers (5-20%). Moreover, existing customers spend 33% more than new customers. So, you should always be on the lookout for any cross-sell and up-sell opportunities to increase your CLV, which will in turn, help you diminish your customer churn rate and increase customer retention. To achieve this monthly goal, set smaller activity-based targets such as:
- Calling your existing customers X times in a week
- Sending Y number of emails to Z number of customers every fortnight which can include the brochures of your products that they could subscribe to
Every time a sales manager uses data to set sales goals, an angel gets its wings!
What are the sales goals for the next year based on? Well, on many figures, metrics, trends, and industry correlations, but majorly - on your historical sales data. So, you need to keep your data at the core while setting S.M.A.R.T. sales goals. Well, you’re in good hands because our sales intelligence and automation software, Wingman, is all about data-driven analysis and assistance!
No need to wing it when you have Wingman
Wingman helps you with its comprehensive sales benefits ranging from extracting crucial metrics and KPIs for sales forecasting to providing live assistance on call. It provides granular AI-driven insights from your integrated data in CRM, call recordings, and other business platforms to help you set and achieve different types of sales goals.
With Wingman, get actionable insights and metrics into the sales performance of your sales professionals such as their conversion rates, profit margins, and the health of their sales pipelines. To learn more about Wingman, and how it adds the right sales strategies and insights to your arsenal, book a demo with us today!