Setting sales goals is a crucial part of the whole sales process. But you already know that because setting sales goals is addressed in just about every type of sales training there is ’ seminars, online courses, sales books, and even your weekly or monthly sales meetings. So, there’s no reason to get into the why of it, we need to look at the how. How do you set the right sales goals for your team and your company?
There is a right way and a wrong way to set sales goals. When you do it right, you are able to better manage your sales pipeline while increasing sales at the same time.
Setting the right type of sales goals isn’t easy. Many sales leaders set un-achievable results-oriented goals that no one can possibly meet. All that does is lower morale, which in turn lowers productivity. Why? Because we can’t control results. But what we can do is control our own actions. That’s why setting activity goals is the key to reaching remarkable sales results.
What Are Activity Goals?
Activity goals involve just that ’ activities. For example, rather than setting a goal of selling $1,000 of products each day, try setting a goal of reaching and talking to 25 prospects each day. That is an attainable goal, over which you have control. You can’t control what each prospect decides to buy or not to buy, but you can control how many prospects you talk to. And in doing that, you will see your sales dollars climb, rather than seeing your morale fall.
Taking the focus off results and putting it on activities improves confidence and makes you more effective and productive in achieving your goals. Gareth Goh says it this way in his article on InsightSquared.com, ’’Regardless of what happens on the output, each rep should have no trouble hitting these input-based goals of hitting a certain number of calls each day, week, month and quarter.’’ The results will come by focusing on what you can do, not what you have no control over.
Getting into the Habit of Setting the Best Sales Goals
To get to the numbers you need to set as activity goals, you have to do some calculating. There are two steps:
- Calculate your sales conversion rate. You may have CRM reporting that gives you this number, but if not, you simply divide the number of closed sales by the number of prospects you talked to. For example, if you make 100 calls, and 5 result in sales, your conversion rate is 5%.
- From the first number, calculate how many calls or contacts you need to make to make your conversion rate work. With a 5% conversion rate, it takes 20 calls to make one sale.
Knowing these calculations will allow you to adjust for any discrepancies you find with your sales team.
The goal in applying what you learned with the calculations is to set solid activity goals instead of being concerned with a specific result. In other words, you could set an activity goal of making the best and most effective presentation to 20 prospects, not worrying about the outcome, knowing that if you do everything as you should, one prospect will convert.
Sales Activity Goals Drive Sales Results
Using activity goals as the focus for your team members is a way to increase confidence and take away some of the fear of rejection. However, there is still a place for results-oriented goals. According to George Bronten, CEO and founder of Membrain, in his article How to Set Sales Goals Your Team Will Actually Achieve, ’’Revenue numbers and other results-oriented goals do have a place in effective goal setting. For one thing, sales leadership needs to know what they can expect from the team, so they can run forecasts. Once you’ve identified the critical behaviors, and set goals based on them, you can then project outward the impact of achieving those behaviors on outcomes, and set results-oriented goals accordingly. Because they are based in daily activities and ongoing support, these goals will be much more accurate and achievable, leading to better overall outcomes.’’