“I want to see our sales revenue tripled by the end of this year.”
Hold that thought. No, literally, hold it back, keep it to yourself, and sleep over it. In the meantime, please don’t ask your sales team to achieve that imaginary sales goal by the end of the year.
Now, what’s the new verdict? Do you still think that tripling your sales revenue in a few months is any more than moonshot thinking?
While it’s great to be ambitious, setting unattainable goals is the easiest way to set up your sales team for failure, and lead to low morale, or even burnout.
According to Hubspot’s Global Sales Enablement survey, 40% of businesses failed to achieve their annual sales goals. Clearly, mistakes were made - so in this article, we have bundled up a list of eight major mistakes that sales teams stand to make while setting goals. Not only that, we have devised cutting-edge strategies for your team to avoid these pitfalls.
1. Setting unrealistic goals
“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.
If your revenue graph is not going up as fast as you’d predicted, it’s highly probable that you had unrealistic sales-pectations and set unattainable sales goals. If you’re struggling to close 25 deals in a quarter, setting a goal of closing 40 deals in the next quarter is clearly an overestimate.
Such moonshot goals can kill the morale of your sales reps, take a toll on your business productivity, and even tempt them to leave your organization and join someplace better - where they are not asked to achieve the impossible.
A S.M.A.R.T. fix:
The most effective strategy for efficient sales goal setting is to make them Specific, Measurable, Attainable, Realistic, and Time-bound. Now, how to set S.M.A.R.T. goals? Use your business data to forecast your future sales revenue and map out the timeline in which it can be generated. Take these factors into account while setting sales goals:
- the resources available on hand
- the health of all deal pipelines
- up-selling and cross-selling opportunities for the existing client base
- likelihood of closing the deals already in the pipeline
- market and industry dynamics, trends, and correlations
2. Setting too many goals
There are myriad milestones to reach and new markets to dig your claws in. And for ambitious businesses like yours, it’s tough to hold your horses and refrain from trying to achieve everything at once. You want to expand your presence in the APAC region. You want to increase your profit from products A and B. You want to multiply your revenue 2X by the end of the quarter. Meanwhile, you have forecasted your sales metrics, and of course, you just have to hit those monthly targets to make the forecast come true. So. Many. Goals!
Multiple goals can overwhelm sales reps and kill their morale. If you ask them to accomplish far more than what they are capable of, it can cause pressure and stress, decreasing their productivity significantly. The hack to avoid this situation is to set three to five sales goals for a given time period. And so, you need to be highly selective while choosing your sales goals; ensure that you prioritize the right sales metrics - the ones that you want to see a visible change in - while deciding your sales goals.
3. Trusting your gut to create forecasts
A sales manager can defer to their sales team members’ opinions by simply asking them, “How much do you think we can earn from this location in the next quarter?”
What the managers don’t realize is that their reps’ answers to that question can never be free of bias. There can be plenty of reasons for this; a sales rep might be:
- stressed to hit a big quota and could quote a smaller one
- hesitant to under-forecast so as they don’t disappoint you with a small number
- overconfident to over-forecast revenue in the attempt to go up the leaderboard/ or just “in-the-heat-of-the-moment”
Forecast intelligently with sales intelligence
It’s not the 90s anymore, and you can’t rely on intuition or an excel sheet to make sales forecasts. According to a Hubspot survey, 44% of sales leaders who will exceed revenue use competitive intelligence and market data.
- Sales intelligence software (like Wingman) can help you get AI-driven insights into your team’s performance, your deal pipeline, and the likelihood of closing deals.
- You can even track critical sales metrics such as conversion rates of deals, win rates of individual sales reps, and also, sentiments of your prospects/customers on calls.
When setting your sales goals, you can leverage this AI-powered information to fuel your forecasts and set S.M.A.R.T. sales goals.
4. Relying only on historical data
You have your CRM stacked with sales and marketing data, leads’ information, thousands of contacts, and even more call recordings. And it’s fairly reasonable to base your sales forecasts on your historical company data while setting sales goals.
But here’s what this approach doesn’t take into account: industry trends and underlying correlations, current market scenario, and your future business plans and opportunities. These factors will highly influence your sales process and pipeline health when you’re on your journey to accomplish your sales goals.
So, if you don’t consider these facets while setting your goals - then it’s evident that this would surface some issues you can’t anticipate.
Research, research, research, apply!
To avoid this unanticipated dilemma in the future and set goals that you can accomplish without getting any surprises (more like shock) - research as much as you can. Use social media and online business platforms such as Linkedin and Crunchbase to identify the customer needs in your industry. Predict your market dynamics and industry trends and factor them into your goal-setting process.
If you know what’s going to trend in the next few months, you can set your goals accordingly by targeting to sell more of your ‘in-trend’ offerings.
5. Not qualifying leads
You have many sales deals in your pipeline that you have labeled as ‘qualified,’ and when setting sales goals, you will take those deals into account, depending on their likelihood of conversion. But if those deals don’t go through after the next call, you’ll be up the creek without a paddle with your tough-to-achieve sales goal of closing more accounts than you can possibly close.
This situation arises when your deals are not qualified in the first place, which sets you back in achieving your sales goals.
Fix: a successful discovery call
The purpose of a discovery call is to decide whether your prospect and you can be a mutual fit for doing business with each other. Leverage the discovery call to unearth your potential customer’s pain points and decide whether your product has the potential to resolve them.
A successful discovery call can help you set more accurate sales goals. Even if the deal doesn’t go forward after the discovery call, it’s better than forcefully trying to close the deal that might not convert later. Doing the latter will only increase your Customer Acquisition Cost (CAC) and decrease the probability of setting S.M.A.R.T. sales goals.
6. Setting goals without accountability
As a sales manager, you forecast your sales revenue, take industry insights and trends into account, and leverage your business data to set five sales goals for your team. The next day you call a team meeting, assign those five goals to your team, give a splendid motivational speech, and off you all go your own ways.
Now, your sales reps are left to decide who would do what. For them, these goals need to be achieved collectively by the team, and there’s a lack of clarity on who is supposed to contribute how.
Hack: Set activity-based sales goals
For every bigger sales goal, set smaller activity-based goals for every sales rep on the team. For example, for a sales goal such as “increase the Lifetime Value (LTV) by X% over the next quarter,” set individual, activity-based goals, such as “make Y number of calls to your clients every month.” This will provide clarity to your sales reps and keep the action items ready for them, rather than making erratic efforts and depending on other reps in the team to achieve long-term goals.
Moreover, since all these activities are logged in your CRM, you will be able to track and review their progress over time and ask them to course-correct wherever need be.
7. Not reviewing progress
The journey of “successfully achieving a sales goal” doesn’t end as soon as you set it - it goes on until the goal is accomplished. Your sales reps might get off the track on the way, which could tamper with the probability of achieving their goal within the required time period. In that time of need, you should be there to push them in the right direction.
A regular dose: progress review
Set reminders or schedule recurring meetings with your sales reps to follow up on their progress so far. This will help you identify their strengths, weaknesses, and areas of improvement. You can then suggest sales training courses and take coaching sessions with your sales reps to improve their performance, bringing your team closer to achieving their goals.
8. Rewarding based on final results
Reward announcements generally go like this: “Whoever hits a whopping $X revenue gets $Y as incentives.” This can demotivate the sales reps who are making continuous efforts but are not able to land big enough clients. And remember, a business is run with all sizes of clients - small or big, money is money.
“But how can I reward them all? Money is money, and they aren’t landing big enough clients either.”
Savior: rewarding within a range
With your revamped rewarding scale, you could incentivize your sales reps who close deals between $x to $X with a reward of $y to $Y - the bigger the client, the higher the incentive. This new incentive model would keep the morale of your reps high and motivate them to achieve more at the same time.
What lies at the heart of goal setting?
Data. To be able to set S.M.A.R.T. goals, you need the right sales data, sales reps’ performance metrics, and critical business KPIs. Wingman can help you with that and more.
Wingman’s sales intelligence for setting realistic sales goals
Wingman is a sales intelligence software that leverages your business data and sales call recordings to offer data-driven insights into your sales pipeline. It helps you drive accurate forecasts, analyze sales performance accurately, and perform AI-powered sales analysis in real-time.
Wingman provides live assistance to your sales reps, helping them with cues and battle cards to handle sales objections and tricky situations on call, proving itself to be extremely useful in achieving your sales goals.
To set, meet, and exceed your sales goals with our advanced sales intelligence platform, book a demo with us now.