How. To. Close. More. Deals. This is the most overused phrase in sales ever. Small and large businesses frantically increase sales quotas in the delusive belief that higher numbers will inspire reps to sell better and faster. And when management keeps nurturing their false hopes for achieving unrealistic sales goals, almost half of the salespeople (47% according to CSO insights) still fail to hit their quota in 2019.
So what’s wrong in a “set and forget” approach to sales quotas? Here is an analogy. Let’s assume you want to make a $1,000,000 in two years. That’s your personal financial goal, your quota to meet. Yet, if you set this goal without clarifying interim objectives for each quarter, month, or even a day, this goal remains merely a dream.
A goal is a dream with a deadline. – Napoleon Hill
That’s exactly why only 0.1% of us already have that million of dollars in their pockets. The majority chronically screws up on the very first stage of goal accomplishment: they can’t even set it right.
The same applies to sales. You can tell your rep to close 20 deals per month, but that’s only the beginning of your sales goal-setting journey. Instead of chasing the sky-high numbers, you need to make sales performance goals digestible and challenging at the same time.
How? Master the subtle art of sales goal setting and align short-term salesman objectives with your long-term aspirations. The first goal to go: read the next 1,686 words down there.
What is the Goal in Sales?
Sales goals are measurable actions that each sales rep performs to hit the global target. All the things you do on a daily basis like sending emails, making calls, working on customer retention can be transformed into tangible goals.
Example: Increase an email open rate by 1% within the next two weeks.
Higher open rates mean a higher probability of closing the deal. This sales manager’s goal is designed to grow your revenue eventually but is clear and attainable enough to be achieved in two weeks. That’s an example of a SMART goal for sales of which we will tell you a bit later.
Why Sales Targets are Crucial to Success
A sales target is a lot like a spot on a Google map. You mark the specific place as your destination and Google promptly gives you directions on how to get there. By this simple action, you receive all the information about the route: transportation means, time estimate, road conditions, and more.
Although your sales reps may have no idea how to reach the final destination, the presence of the target itself gets the ball rolling. With a clear personal sales goals in mind, they focus all their efforts on finding a way to get there.
Success doesn’t happen overnight. Keep your eye on the prize and don’t look back. – Erin Andrews
How to Set SMART Goals for a Sales Team
Goals are good by nature, but SMART goals are 3X better. The S.M.A.R.T. is a common approach for goal setting effective in a variety of life areas, whether it is personal & professional growth, business, or sales team performance.
“SMART” abbreviation is synonymous to structured, trackable, and down-to-earth. Meeting the requirements of this approach, you leave no room for vagueness and hesitation in future sales activities, as everything is precisely determined at the outset.
5 Tick Boxes for SMART Sales Goals
- S – Specific
Describe what exactly you want to achieve and what potential methods could be used in the process. Instead of saying “Increase a retention rate”, say “Build a new loyalty program that will increase the retention rate by 20% during the two following months. Send a related newsletter to all clients who are at risk of leaving.”
- M – Measurable
Make sure that achieving your goal will produce particular evidence of that. That’s where numbers finally come into play. Coming back to our retention rate goal, we can say that it’s measurable. At the end of the period, you’ll calculate the current retention rate and compare it to the previous metrics. If it increased by at least 20%, the goal is met.
- A – Achievable
The goal should be realistic. Don’t ask your reps to close 100% more deals than they do now or make $100,000 per month if you just a green startup. For most of the teams, it’s not viable at all.
- R – Relevant
Identify the pain spots of your current sales strategy and fill the gaps. Don’t make it all come down to the proverbial “close more deals” and focus on what’s truly important now.
- T – Time-based
No deadline, no motivation. Don’t let your reps procrastinate, set a challenging date due by which the goal needs to be achieved.
6 Types of Goals for a Sales Team + Examples
To structure your goals for salespeople, it makes sense to put them into specific categories. There is a common classification of sales goals by type, all backed with setting sales goals examples.
Monthly Sales Goals
The most apparent sales performance goals are monthly ones. We bet you already do that, as each sales rep’s salary is usually directly related to the number of closed deals per 30 days. But do you set them right?
Most experts recommend to take an annual plan and divide it by 12. This could be a base value for each month, but you’ll inevitably have to review it at the beginning of a new month.
First, there are seasonal fluctuations. It’s hard to meet the quota you set for March in, let’s say, December. Aside from general tendencies, there can be time-specific features of your business. On top of all that, the market is constantly evolving, while your company is scaling further. So make sure you consider all the changes before approving the final month’s objective.
Example: Generate 100 qualified leads with at least a 70% qualification score in August. Generate 110 qualified leads with at least a 75% qualification score in September.
Never ever ask your reps to complete mission impossible of increasing something by 100%. That’s like if the above-mentioned Google asked you to climb over a cliff instead of showing a bypass road to the higher point. Should we even explain why asking your managers to make 40 calls in place of regular 20 is absurd?
But what if you want to raise it to 40 no matter what? In this case, set waterfall sales rep goals.
Example: Taking 20 calls as a base value, gradually increase it by 2 each week. In 10 weeks you will be at 40 calls per day.
Rank each goal by priority. Some of them will be more urgent and more valuable for the company, while others will be minor and can wait for a while. Always put your sales executives’ focus on them by explaining why these goals are the most significant.
Example: You’re not going to defy the fact that following-up with 5 qualified prospects valued at $10,000 is much more important than making 20 cold calls to potential leads.
Turn hard records into exact actions. Activity sales goals usually perform better than just the number mentioned in the monthly plan. Reps know what exactly they should do and to what extent rather than spending precious time on guessing the way out.
Example: You need to convert 20 users by sending them emails. Look at the previous statistics: if 1 out of 100 emails usually converts, this means that the sales rep should send 2,000 emails to convert 20 users.
Roughly speaking, salary and bonuses are rewards for completing a monthly goal. However, smaller sales reps’ goals can be neglected because of no incentive behind them. While making a monthly plan, don’t just write down a global objective but divide it into smaller parts with a little bonus for each. As a result, your employees will feel constantly rewarded, as more bonuses are accumulated.
Besides one-time incentives, maintain the overall healthy atmosphere in the office. Find a sure-fire way to engage your employees and witness higher commitment and dedication to their everyday tasks. Raising their productivity bit by bit, you elevate the growth of the company as a whole.
Example: Set the sales goal of 3 upsells per month. Offer $50 for each successful upsell beyond the plan.
Stretch goals are those that can make your business evolve at a rate of knots, but they are also the most tricky to implement. This kind of sales performance goals means thinking big and ambitious. Sometimes it may even seem not quite realistic: to reach such an objective, your sales reps need to push their limits and act “out of this world”.
Those sales goals setting is justified only if the basic quotas are met, while the team is highly motivated and ready to reach for the stars. Otherwise, non-attainment of the arduous stretch goal will lead to only greater frustration.
Example: Bring in 10% more revenue each month.
How to Measure Sales Team Performance
The direction is determined, it’s time to achieve sales goals. How will you know whether your team is working with peak performance? The answer sounds simple: you need to measure it. But in practice, it may be tougher to implement.
The only way to do this is to track the results of each activity and the activity itself. The cornerstone of all sales activities is building a sales pipeline to visualize the whole sales process. This helps to monitor leads prospecting and define which actions (and how many of them) are required to move each prospect down through the sales funnel and finally convert them.
When it comes to specific actions like emails or calls, you also need to count their number and then calculate their effectivity.
For example, your sales rep has a task to launch an email campaign with 1,000 recipients. In this case, it will be wise to calculate the open, click-through, conversion rate, and other metrics. After that, you compare these values to the rates of the previous period and define whether the target was met or failed (and where exactly it needs improvement)
Bonus: Reach Sales Goals Faster with a Gmail-Based CRM
Manual tracking of all that stuff is a tall order. Instead of working on priority tasks, your rep will distract on writing down what’s got done.
The software-based measurement of each goal seems to be a solution, but you’ll still have to switch tabs like your Gmail client, CRM platform, and third-party tool for email campaign management. No unity means fewer hours spent on achieving the goal and more on putting everything together.
The perfect setup is when you keep your contacts, your deals, and your activities in one place. This place can be Gmail, as most businesses already use it to contact their leads and clients. Integrating your Gmail with a CRM extension like Nethunt, you eliminate distractions and reduce the time required for updating and analyzing your sales records.
But how does it correlate with setting goals for salespeople? Data-driven and properly optimized goals have edges over just random objectives based on your desires. First, they are easier to accomplish. Second, they drive higher profits with smaller input. And last, they are better aligned with your long-term sales strategy.
NetHunt CRM gives you immediate insights into sales activities right in your Gmail account. You see how many deals are closed, what is the percent of open emails, and on which stage of the funnel is the lead of your interest. You can also adjust the personalized view for each manager and find out the exact number of deals closed and their combined value. This allows, in turn, to compare reps’ results and encourage them to compete and become the #1 salesperson in the company.
Proceeding from the power of data and using a full package of Google tools, you can quickly set sales goals, assign them to the right people, and let them start achieving objectives straight away in Google Suite.
Upgrade your Gmail with NetHunt CRM and always set attainable yet robust goals for your sales department!