Written by Sean McPheat |
Every successful salesperson that I have encountered has always worked towards a sales target. Either this has been given to them by their sales manager or they have created it themselves. As salespeople it’s in our DNA to achieve and putting a tempting target in front of our noses with the lure of commissions and bonuses makes us sit up and take note.
Sales Target Setting is key for a successful sales career so let’s investigate this topic and uncover what it’s all about.
Any sales leader should have covered this topic on any Sales Management Training that they have gone through but just in case you’ve got a sales manager who isn’t aware of this then the following will be really useful for you.
In most professions, time, seniority, and good behaviour will propel a person to the top of their field. In many career fields, if a person simply does their job, maintaining an acceptable level of performance, and does so for many years, this person could reach the highest levels in their chosen occupation.
In the world of sales however, this is far from the norm. Any weak sales manager or weak salesperson is soon found out.
To reach high levels in professional sales requires uncommon personal performance and individual effort. To reach above average performance, you need to set above average goals and reach them. The following information will help you establish sales goals and a blueprint to obtaining them on a consistent basis.
What’s the difference between the two?
The first step in sales target setting is to differentiate between what are targets and what are needs.
“To pay your rent or mortgage you must have X amount of money and to get that money you must make X number of sales and therefore your goal is X number of sales.”
This is not a goal; it is a need.
When you use your needs as goals, you are working to reach your basic levels of living.
When you set this bar, you will usually just reach it or fall just short. That’s why I am always sceptical towards salespeople who want a high base salary. They don’t want to push themselves to have to exceed target to make a living. They want it all comfortable and they make any commission it really is a bonus!
If you work only for a living, you will never really live. Your goals must surpass your basic needs so that by reaching your goals, all your needs fall into place. Also, if you fall short of reaching your goals, you will have still surpassed your needs.
The purpose of sales goals is to help you to continuously improve and reach higher levels of success. Sales goals are to help you get better, not to help you barely survive.
Also, sales targets will help you measure and quantify your success. So first, be sure that you are not setting goals that are what you need to survive. We go into detail on how to set sales targets in The Sales Manager’s Guidebook.
Now let us examine some traditional goal setting philosophy.
Traditional goal setting teaching tells us that all good goals should have several elements in common.
Parameters for good goals:
1. The goal should stretch your boundaries, exceed your immediate reach
2. You must believe in the goal, believe that it is possible
3. The goal must be very specific, exact
4. The goal should have an exact deadline
5. The goal should be written down
We’ve all head of SMART goals and in terms of sales it’s no exception. Your targets need to be SMART.
1. The goal should exceed your grasp and ultimately exceed the norm of the company
2. You should be able to clearly visualise the reality of the goal
3. The goal must be detailed and reverse-engineered
4. Your goals should have many milestones, incremental steps
5. Your goal should be written and diagrammed on paper
6. Read and commit to the goals everyday
The goal should exceed your grasp and ultimately exceed the norm of the company While setting good goals can launch your sales career to new heights, setting poorly chosen goals can put you out of business.
In setting good sales targets, each goal should stretch you.
Each goal should exceed what is easily obtainable for you. Your goals should motivate you to rise above your previous levels. While this may sound simple, it is more complex, and it is where most salespeople fail. While you need to set lofty goals, if those goals are too high, they can have the reverse effect and become detrimental to your psyche and your success. Goals that are set too low are of no effect. Goals that are set too high can destroy you.
How do you find the correct balance of goals that stretch you but not too far?
One method to accomplish this is to set your goals at the places where you fail.
In fact, you cannot truly succeed or establish realistic goals until you first fail. Find the things that you came close to doing but fell short and start right there. Take a high jumper for instance. The bar is set at a height of seven feet. The athlete makes the attempt and successfully clears the bar. The bar is then set at seven feet, two inches and the jumper again clears the bar.
The bar rises to seven feet three inches and once again, cleared with no problem.
Has this high jumper really succeeded? They do not know if they have yet been tested. It is only when the bar is set to a height that they cannot jump, that they have reached a point to set a goal.
Now the athlete must stretch themself and reach a new level of performance.
Also, if the jumper failed to get over the bar at seven feet four inches, do they set a goal to jump eight feet? Maybe a long-term goal might be to someday reach eight feet, but the jumper’s next immediate goal must be to successfully jump the very next height; the height in which they failed to clear. Then they must work harder and practice longer until finally they clear the next height.
Now they have succeeded.
If you take this approach in setting next step goals, you will always set high goals, yet realistic goals. Figure out what are some next step goals for yourself.
Perhaps you want to move to the very next income bracket. Not jump six brackets, just move up one. Or maybe you want to sell just two more contracts this month or this quarter more than the last period. You want to earn just one pound more than you did last week or win the next sales contest.
If you came in last in the previous contest, then perhaps you set a goal to come in third place.
Use this method to help you establish short-term, next-step goals. It will keep you motivated and will also enable you to know what type of Sales Skills Training you will need to take your game to the next level.
Believing in a goal is one thing. But to be able to close your eyes and see it as a reality is another. You may be able to convince yourself that you could become the top salesperson in your company. However, if you cannot visualise this as reality, it will not happen.
You may believe that it is possible, but you do not believe that it will happen. You can believe that it is possible for you to score a hole-in-one on almost every hole on the golf course, because technically and physically, it is possible. However, you do not believe it will happen and you could never really visualise such as being real. Your goals must be that which you not only believe in, but which you can visual yourself receiving.
Good sales managers will normally be able to create your sales targets in consultation with you so they get your buy-in. Targets should be well detailed, precise and for long-term goals, they should be reverse engineered. Sales goals must be detailed. It is not enough to say that you want to be the top salesperson. You must describe exactly what that means. This does not mean that you must emulate the characteristics of the top salesperson, just detail things like what sales numbers, contracts, and number of presentations it will require.
Also, for long term goals like salesperson of the year, break these goals down by reversing the goal. Start from the end desired result, then work backwards to determine each incremental step toward the finished objective.
As an example, you want to win an annual sales contest in where to win you will need to produce 36 sales contracts within the twelve-month contest period.
Begin with the 36 sales and work backward: For instance, to close 36 sales for the year, you will need to close 3 sales per month.
To close 3 sales per month, you will have to do 15 sales presentations per month due to your 20% closing average.
To complete 15 presentations per month, you will have make 60 calls from your database because it takes you 4 calls on average to get 1 presentation.
To make 60 calls per month you will have to make 15 database calls per week or three calls every single day.
Reverse engineer your goals to break them down into short-term stepping-stones.
Now that you have the incremental steps and milestones, you need to diagram and map out the details of the “plans.” You want to write down more than the goal, but the path and the steps involved.
Simple Written Goal:
“I will make 20 sales this month“
Written and Diagrammed Goal:
“I will make 20 sales this month by setting 60 appointments. I will set these appointments by cold calling on Monday, Tuesday, and Thursday from 9:00 am until noon and then from 2:00 pm until 4:00 pm”
5 hours per day cold calling = 5 appointments set per day
3 days per week = 15 appointments per week = 60 appointments for the month
= 21 sales using the company low average of 35% closing rate
If you want to exceed your sales targets then you’ll need the right sales mindset.
Do you want to be mediocre, average, unexceptional or ordinary?
Those aren’t qualities that usually come to mind when we consider successful salespeople.
We like to think of ourselves as successful, positive, popular, prosperous and, yes, outstanding.
So, what characteristics would support your quest to be the best?
What would we expect of salespeople who make an impact and achieve success?
Here are some of my ideas.
They Are Insanely Curious
Curiosity is one of those things we can develop, but only if we have the right mindset.
Words that come to mind when we think of this are: intense desire to know something, interest, eagerness, questioning, investigation, thirst for knowledge.
Einstein said that ‘the important thing is to never stop questioning’ so always ask lots of probing sales questions.
“Curiosity has its own reasoning for existing”
Being curious means always wondering ‘why?’
It involves thinking on a different plain, identifying questions that will get deeper results and being non-judgemental about what is happening.
Becoming curious drives us down different avenues and creates more opportunities for us to see things from new perspectives.
They Know What ‘Value’ Means In The Customer’s Mind
We may think we know how to sell value, but it means nothing unless that value is built up from the customer’s perspective.
Outstanding salespeople know what drives prospects’ decisions and how to create awareness of that value.
It doesn’t just involve persuasive presentation skills.
You need to involve the prospect at every step in the process.
You need to show the value to them or their business in the solution you are offering.
Just because you’ve got good quality products and services or the longest guarantee doesn’t ensure the sale.
Building value in the solution gets you closer to the holy grail.
They Take Responsibility For Everything That Happens
How do you feel when you hear people making excuses for everything bad that happens to them?
It’s the economy, the leads are weak, the competition has better products, the buyers are idiots, we’re too expensive, blah, blah, blah.
Quality salespeople accept that not every prospect will buy, but they don’t blame things outside of their control.
They see the situation for what it is…a situation.
They don’t condemn people.
They work on what they can control and accept responsibility for changing what they can and move away from what they can’t.
They See Failure As An Outcome And Learning Opportunity
Many people see failure as a stain on their character, and a reason to hold back or not take risks.
If you see every result as an outcome, you cease to judge things against the ‘success or failure’ labels.
Things are only a failure if you don’t learn something from it.
Repeat a failure and, yes, you’ve failed.
Do something different and practice learning different ways of progressing, and you now get closer to your goal.
If you label yourself as a failure, it will play havoc with your self-esteem, belief and worth.
See every outcome as a learning opportunity and you’ll identify many ways to improve.
They Develop Their Emotional Intelligence
EQ is something that can be grown and developed.
It combines self-awareness with self-reliance and self-control.
It builds self-motivation.
It creates opportunities to engender empathy and social skills.
Outstanding salespeople see improving their EQ as a challenge to be taken on, a journey to be taken with relish and optimism.
You’ll never complete it; there is no end-destination.
Being aware of how EQ can play a part in successful salesmanship is a key requisite for building continuity in developing your skills and abilities.
Never underestimate this primary driver towards successful interactions.
These are just five characteristics, and there are many more.
Be aware of how you are displaying these, and you’ll see advancement quicker than you had ever imagined. Talking of advancement, if you’re interested in improving your skills further check out our Advanced Selling Training course.
Remember, most salespeople are set sales targets.
These are usually expressed in terms of turnover, market share, profitability, number of new accounts, renewal of existing contracts and so on.
The problem with being in sales is that everything we do is measured and if we are underperforming, we are vulnerable.
It’s not our sales manager’s fault. They are also measured on results and are equally vulnerable if the results of the team aren’t good.
I learned many years ago that if you are exceeding target, they tend to leave you alone, so I made it a priority to understand how to beat my sales targets on a consistent basis.
Here are a few thoughts:
1. Always challenge your target if you feel it is artificially high or unfair. Use logical arguments rather than emotional arguments to present your case
2. Aim to hit your sales target before the end of the period it’s set. Don’t be scrambling around in the last week of the quarter. You’ll look desperate.
3. Begin by realising you can’t manage your target, which is an output. You can’t manage outputs. What you can manage is inputs.
4. Inputs are all the activities that make up a typical day in the life of a salesperson. These include things like telesales, booking appointments, going to see customers, selling over the phone, virtual selling, negotiating with customers and asking for referrals.
5. What we need to do is to set ourselves targets for all these activities so that we hit our overall target by the end of the sales target period.
6. It is important to measure your sales activity and results. Remember, if you can’t measure it, you can’t manage it. By measuring activity and results we can predict future results more accurately
7. Understand your key ratios. If we make 100 cold calls and, as a result, gain 10 appointments the key ratio here is 1:10. What this means is that if we need to book 6 appointments in the future it makes sense to have 60 prospects to call up.
Some targets are more complicated, and it may not be possible to plan this accurately.
However, the basic principles apply:
1. You must have a plan. Planning is imperfect and our assumptions usually turn out wrong, but the plan can be amended and changed over time giving us better data to produce future plans.
2. Agree your plan with your manager. The more work you put into developing your plan the more persuasive it will be. Don’t let your manager force a target on you that is illogical or unreasonable
3. Give your manager regular feedback. This is especially important if there is bad news. Give bad news early. This gives everyone involved the opportunity to deal with it with plenty of time to spare.
4. Keep reviewing and updating your plan. Work hard and measure everything.
Please get in touch for more information about our Sales Courses and Sales Assessments.
MTD Sales Training
Updated on: 22 November, 2021
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