What is a sales target?

A sales target is a measurable goal that a company gives its sales staff a set amount of time to reach. The number of customers or sales a salesperson or area should be able to bring in over a month, quarter, or year was given.

Most of the time, sales goals are based on wins or income.

• Look at deals won when a sales organization wants to boost sales or work more efficiently.
• Setting revenue goals gives finished deals more meaning by considering how big those wins were. A goal for making money would be “$100,000 in total deals per quarter.”

Companies keep track of sales and deals closed to judge how healthy salespeople are doing.

Revenue is the most critical measure when making predictions and long-term plans because it shows how their sales efforts affect the bottom line. This is especially true for companies like business SaaS with long sales cycles and often close big deals. You shouldn’t judge a salesperson based on how many deals they’ve closed if deals take weeks or months to close.

Still, making more deals simultaneously shows that sales are improving. So, every sales team also looks for ways to close more deals within the time frame of their sales goal so they can make more money faster, which is the end goal.

Synonyms

• Sales goal
• Sales target strategy
• Sales quota

Why businesses set goals for sales

Businesses set sales goals for five main reasons:

• Tell your staff and the business what you want to do. When it comes to business, measurable goals give you direction. They are a way to motivate workers, help them focus, and hold them accountable.
• Always try to make more sales. Your sales numbers will slowly increase over the same time as you get more customers and learn how to sell better. You’ll use past sales goals to guide improving from one quarter or year to the next.
• Check how well the sales team is doing. Sales are close to the money. More money coming in is directly related to more effective sales input. The best way to tell how good a salesperson or team is is to look at how often they meet (or miss) their goals.
• Make money from your business. It’s most important to set sales goals that can be reached. So, new businesses might be unable to build a sales team that makes money quickly. But part of the (complex) process of setting a sales goal is thinking about how much money your company needs to stay open.
• Know how much you can sell. There’s a good chance you won’t set a decent sales goal the first time you try. Most businesses need a few months or even a few years to determine their best goal. Even goals that aren’t met can teach us something. If you set it too low, you don’t realize how good your product and sales team could be, and the other way around,

Why setting sales goals is a good idea.

When sales leaders set goals, they tell their reps what they should try to achieve. Working toward a clear goal has a lot of benefits for them, their team, and the business as a whole.

Tells the sales team what is expected of them

The biggest problem for sales leaders is that the executive team doesn’t always clarify their goals. This affects the reps and makes a connection. Based on data from Indeed, two main reasons sales reps leave their jobs are uneven management and problems between leaders and team members.

By giving everyone in sales a sales goal, you ensure everyone is on the same page. You’re telling your workers what you expect so they can do their best work and showing them what “best possible work” really means.

Helps businesses plan for growth in the future

Most experts think 60% and 70% of your sales team should reach their goals. You can start to accurately predict your income growth once you set reasonable sales goals. You can make intelligent choices about hiring new sales reps, spending money on marketing efforts, and other essential business tasks.

Boosts worker performance

Understanding what workers are supposed to do makes it easier to plan their workday and develop a way to reach their goals.

Besides this real benefit, sales goals also positively affect the company’s culture. It’s easier to see what salespeople are doing well (and not so well) throughout the sales process when they have a goal. Problems in a rep’s workflow must be fixed if they regularly fail to meet their goals.

It can help the sales team develop a mindset of always getting better when done clearly and openly.

It makes competition happen and helps growth.

To get salespeople to do better, there needs to be healthy competition on the team. When sales reps see their coworkers meeting their goals, it inspires them to work even harder.

When someone hits their goal, it motivates others to work even harder, improving performance. New salespeople can also steal ideas from what their coworkers did to reach their goals and use them in their work.

Problems with Setting Goals for Sales

The only thing that matters when setting a sales goal is how well the company does. It takes skill to balance. Because if the goal is too easy to reach, reps may get lazy and lose drive. Morale can drop if it’s too hard.

Expectations that are too high or too low

Sales goals are based on facts but may not be attainable for your business. If you missed your goal by 20% last quarter, you likely won’t be able to reach a 20% higher goal for the next quarter.

As a general rule:

• If a few team members don’t meet their goals, it’s not because of their lack of skills, drive, or the sales strategy as a whole.
• The goal is broken if most (or all) of the team isn’t hitting it.

To make attainable goals, it is essential to look at past facts and the current state of the market. At some point, you’ll have to look back at how well your income goals were met in the past. That way, you can be sure that you can reach your goal.

Not being clear about and in line with business goals

There isn’t much difference between how you’ll measure your goals.

1. A seller makes a deal official.

2. The CRM handles the deal.

3. The seller puts a mark next to “Closed Won.”

4. The deal’s value is linked to the seller’s name.

It’s not clear how the goal is set or how it fits in with business goals. How does the number you came up with (either by looking at past statistics or finances) relate to the growth of your business? Your reps won’t understand the “why” behind their daily tasks if you can’t explain it. They may not be as driven to meet their goals.

Keeping track of performance will also be challenging if you don’t have a strong sales motion. You won’t be able to tell what your sales reps are doing well (and not so well) if your sales process and methods aren’t transparent.

Resistance from people on the sales team

Getting your workers to agree with your goals could be the most challenging part of setting them. It might be caused by:

• It’s not clear why the exact goals are there.
• Make reps responsible and keep track of data.
• Hopes that aren’t in line with what’s possible.
• Sales managers rely too much on numbers to keep track of success.
• Sales managers don’t help reps meet their goals, which is a problem.

To get around this, leaders should add reps to setting goals. Also, they should have regular sales and one-on-one meetings with reps once a week or every two weeks to discuss progress and determine what’s stopping them from meeting their goals.

Keeping an eye on the proper measures

There are a lot of sales metrics you need to keep an eye on besides income. This helps you figure out what’s wrong with the sales force and how successful the team is. It also helps you figure out what’s wrong with the goal.

As an example:

• Your sales team’s closing rate shows how well they turn approved leads into customers. You might be unable to close deals with your salespeople if this number is low.
• The length of the sales cycle shows how well your team works together. Increasing sales velocity is all it takes to boost your closing rate and total revenue for the time.
• The average deal size shows how much each sale is worth. This measure can help you figure out what’s wrong with the prices of your products or find the best salespeople who are consistently closing bigger deals.
• Your churn rate and MQL: SQL conversion rate shows how good the leads you get from marketing and sales prospecting strategies are.
• Lead response time shows how quickly a rep reacts to leads. This is especially helpful for sales teams that call or do inside sales.

If you work to improve smaller sales metrics like the ones above, you’ll see your sales team’s efforts lead to better total top-line revenue growth.

Types of Goals for Sales

You can meet your yearly goals in several ways. The ones that work best for your sales team will depend on its size, focus, budget, and how it makes sales.

Sales Goals Every Month

Setting sales goals every month is simple (but don’t let them stay the same). Work backward from the company’s yearly revenue goal to determine monthly sales goals. Then, divide the monthly goal into smaller goals for each area, team, and worker.

Also, consider changes in the seasons or jobs (like firing people or hiring a new sales group). This fall, bringing on 12 new sellers will likely affect Q4 goals because staff will be busy training them. If you plan ahead, you can change your goals and work harder in Q3.

Our three sales teams will bring in $200,000 in new business between April 1st and May 1st.

Goals in a waterfall

Waterfall goals are like a list of smaller goals. When you reach one, it instantly sets off the next one. Your sellers are getting closer and closer to their annual goal with each step. These goals are good for mood because they keep people from being too stressed out by one considerable number. They’ll have time to build up instead of slowly.

For example, reps will bring in $10,000 more in sales in Q1. They’ll make $15,000 in Q2. They’ll make $20,000 in Q3.

Goals for the Activity

Activity goals look at specific pieces of data, like the number of calls and meetings held, to determine how productive salespeople are. To help you understand the data, you can also look at macro-level success indicators, such as qualified leads and closed deals.

Setting activity goals is a great way to see how well each person does. If a rep meets their exercise goals but doesn’t hit their target, it could mean they aren’t doing those activities as well as they should be.

Activity goals should not be your only source of motivation. All of the sales reps will do things in their unique ways. You wouldn’t want to punish your best sales rep, who can close more deals in 20 calls than in 100.

Our salespeople should make 50 calls daily, meet five times a week, and send out 100 emails to potential customers monthly.

Sequence Objectives

When you set sequence goals, you’re telling your sales reps, “Do X, then Y, and then Z.” This goal depends on them doing several tasks instead of focusing on a specific result, like making a certain amount of money.

The idea behind sequential goals is to concentrate on a task that brings money. In this way, a sales rep who misses a few goals might still reach their income goal.

It’s kind of like a workout goal. Just like with exercise goals, it’s essential to think about things besides the activity that might affect how well the business makes money.

In Q2, sales reps will set up ten new talks every week. By the third quarter, an Account Executive will have turned enough of them into customers for those workers to meet their sales goals.

Sales Goals With Weights

A weighted chain knows that not every lead is the same. You should set goals considering which leads are more likely to close than others.

For instance, if a deal has an 80% chance of going through, it probably isn’t a good idea for the person to count the whole deal’s value toward their goal. Your sales reps will be more likely to hit their goals if you set weighted sales targets based on how likely deals will close.

List of Sales Goals

Like weighted sales goals, ranked sales targets are based on how a sales rep thinks specific deals are likely to close, not on objective probability data. A sales rep must use their gut and experience for this kind of goal.

When you use ranked targets to predict sales, you’ll add up the value of your pipeline based on the score of your rep. It’s not as accurate as weighted targets, but this gives you an idea of how much money your team hopes to make.

How to Set Smart Goals for Sales

Look over how well things went last year.

After the fourth quarter, look at how your sales team did compared to their yearly goals. If overall success isn’t up to par, there may be a problem with the market or the goal you set. You should be more bold when setting goals for the next year if they’re easily beating the ones you set.

Take into account outside forces.

Several outside factors could affect how well the sales team does next year. These can be roughly put into four groups:

• Get resources. If you hire more people, you might have more than one salesperson competing for the same customers. If you lower it, the people still working will have to do more work.
• You are signing up. It usually takes new workers a few months to get up to speed. Until you hire someone, you should change your goals to reflect that.
• Changes to products. Your salespeople might also not be able to sell when you introduce new goods or features or change old ones. And getting to know the goods will take some time.
• Dollar. You can’t change some things, like the economy, the law, or a substantial new invention.

Give each sales team clear goals to work toward.

You’ll need to give each business unit or sales territory its own set of goals if your company has more than one. Some will be bigger than others, so you’ll have to change your goals based on the size of the market and the resources you have available.

Allow for improvement within the limits of your goals.

Your sales team’s skills and knowledge will likely improve over the year. To account for this growth possibility, you should make their goals a little higher than what they reached last year.

Giving your goal a 15% to 20% increase is an excellent way to keep things realistic, but this can be very different based on the size and maturity of your company. For younger businesses, exponential growth is possible, but for big businesses, incremental growth is more common.

Assign areas based on the goals of the team.

The real work begins when you are in charge of a sales area. Assign each rep to an area that makes sense for them based on their experience, past performance, and skill level.

It’s essential to consider how much money you could make in each sales area. Put your best or most experienced sales reps in charge of the most critical accounts.

Examples of Sales Goals for Managers

Sophia, CloudTech’s CRO (Chief Revenue Officer), set high goals for growth after sales rose 12% last year and brought in $3 million. During a strategy meeting, she told Alex, the COO, about her big plan to boost sales by 25% over the next year. But Alex warned them to be careful because the market had recently slowed down, and two new salespeople were having trouble.

By looking at old data, they saw that while the experienced reps regularly saw 14–15% growth, the onboarding phase for the new reps slowed down overall sales momentum. They agreed on a 16% growth goal for the next year, considering both the team’s strengths and weaknesses and the direction of the business.

Example Goals for Sales Reps in Terms of Sales

Jake, an SDR at StreamTech Corp., helped close deals worth $50,000 last month. When Karen, the VP of Sales, got bold, she gave Jake a new goal: make $65,000 the next month.

To do this, Jake turned his attention to high-value leads, significantly growing tech companies interested in StreamTech’s advanced analytics tool. He made his pitch fit the possible high-value clients, made sure there were follow-ups, and set up personalized demos for them.

His well-thought-out plan worked out. By the end of the month, Jake’s work with leads had led to deals worth $67,500, which was more than the bold goal. Jake’s success showed the importance of being determined and knowing what customers want to meet sales goals.

Tips for Achieving Your Sales Goals

Here are the most important things you can do to meet your sales goals by the due date:

• Use sales predictions to set goals that are still possible.
• Look over and change your sales process often to ensure it fits how customers usually buy things.
• Ensure you only move good leads through the pipeline using a sales qualification system like MEDDIC or SPICED.
• Use lead scoring to let your sales reps know which leads are most important and should be moved through the process.
• CPQ software, sales training tools, and digital sales room technology can help you speed up the sales cycle and get buyers more interested.
• Spend money on ongoing training and development for your sales team to make them brighter and better at what they do.
• Turn the process into a game by giving cash bonuses to team members who meet smaller, more immediate goals.
• Use social selling to get in touch with busy prospects and get to know possible customers.