New Year, New You: Setting Sales Rep Goals
It’s a new year, which means it’s time for resolutions for both our personal and professional lives.
However, before you start writing out all of your big 2021 goals, keep in mind that only 8% of New Year’s resolutions are ever fulfilled – and 80% of them fail by February.
If you find yourself wondering why a sales professional would need a list of goals about selling (“isn’t selling their job? Shouldn’t they be aiming for these things already?” you might be thinking…), understand that goals provide tangible signs of progress. Yes, your team should always have the goal of selling more of your product or service, but goals show us if those objectives are being achieved, where we could be working smarter instead of harder, and provide opportunities for training and problem solving.
Why Big Goals Often Lead to Failure
The key with successfully implementing sales goals involves setting your objectives in stages. Individual goals, team goals, and multi-stage goals increase the chances of success.
Too often, we create one giant goal or resolution – sell a million dollars worth of product or lose 100 pounds or something equally audacious. We tell ourselves it’s noble to aim high and “go big or go home”, but the reality is that these kinds of goals regularly fail.
It’s not because we’re not committed to achieving them – but that the road to achieving them is too long and arduous and it becomes easy to give up at the first sign of adversity.
Big goals are great, but to give yourself and your team a real chance of succeeding, we need to break those goals down into stages. Incremental progress, meaning goals and KPIs to hit along the way to the bigger goal, make the road feel less challenging and help people psychologically.
Think about it – generating a million dollars in sales in a year may seem daunting. But breaking it down to generating $85,000 a month or $20,000 per week feels less daunting. Beyond that, it gives us goalposts to aim for so we stay focused. It’s easy to lose sight of a goal six months to a year away. You’re much more likely to stay focused with one that spans a shorter timeframe.
The key takeaway here? Don’t be afraid to have big goals – but set yourself or your team up for success by breaking those big goals down into smaller, more achievable steps.
How do I set myself up for success?
Without insight into what your team is actually doing and how effective those efforts are, it is impossible to create a goal that isn’t arbitrary. Check out our upcoming webinar to learn more about the data sources you need access to, the metrics you should be tracking, and the different ways you can leverage those insights.
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How to Set Sales Goals
All too often, we create our sales goals solely by looking at last year (or last quarter) numbers and upping them slightly. This is not the best way to go about setting goals because it doesn’t factor in the state of your business (and the world your business operates in) or your sales team.
Instead, we suggest using this list of questions to help you determine what your goals should be, and if they’re really what you need to be focusing on.
What do I hope to achieve?
The first and most important question to ask is what you hope to achieve in the upcoming year or quarter or whatever period you’re planning for. If you don’t know what success looks like – in detail – you can’t possibly create a roadmap to get there.
Where, How, When?
We’ve lumped all of these questions into one heading because they all go together in the planning phase. Beyond knowing what you want to achieve, you need to examine the logistics of how you’ll hit those goals.
This means thinking about the big picture of where you’ll focus to hit your targets, how you’ll implement strategies to achieve success, and when that success should happen.
It’s important to know who you’ll need to achieve goals. If you’re setting individual goals, will you need help from other people to get to the finish line? This is where you figure that out.
If you’re making plans for a team, who will be involved at each stage of the process? Planning prevents poor execution. If you know who you need to help you achieve success at each stage of the planning process, you’ll encounter fewer issues on the road to success.
Limitations and Obstacles
Next, it’s important to think about any limitations or obstacles you may have to overcome to reach your goal.
Is your company lacking a piece of tech that could help you improve revenue? Is there some competitor or market condition creating an obstacle that you’ll either have to go over or around?
This is the time to play Negative Nancy and think about worst case scenarios and potential pain points on the way to your goal. You’ll invariably encounter issues you didn’t expect along the way (that’s just how life works…), but understanding the big issues you may encounter on the way to your goals in the planning process can help you find solutions or decide that the goal isn’t realistic given the roadblocks in front of you.
What Does Success Look Like? What Happens if You Fail?
You’d be amazed at the number of people and companies who set goals with no idea of what successfully hitting their marks would look like. Meanwhile, there are even more who never take the time to consider what happens if they come up short.
It’s critical to take the time to define success so you’ll know when you achieve it. What key performance indicators will you need to track? What will show you you’re on the right path? You need to know the destination before you start the voyage.
By the same token, it’s important to understand what the stakes are if you come up short. Will missing a revenue goal cause you to cut staff? Will it cause you to scale back production? Will it jeopardize your business as a whole?
Understanding the parameters of success and failure is important. Don’t skip this step!
Sales Goals Examples
By following the steps above, you’ll be able to create your own unique sales goals for the coming year. However, sometimes it’s not necessary to reinvent the wheel – so with that in mind, here are some common sales goals you could implement for the coming 12 months to help take your business to the next level.
1. Increase Monthly or Yearly Revenue
We start with the most obvious goal – revenue growth.
Every company wants to make more money and revenue is an easy metric to track. Keeping with the points made in the previous section, it’s best if you set monthly, quarterly, and yearly revenue goals.
Simply setting a yearly goal doesn’t create any real sense of urgency in those first few months, so you’re better served by breaking things down into chunks. This way, you can see if you’re on pace or not, and everyone has an objective that looms in the near future, rather than a year away.
Beyond that, you can also set revenue goals for the team or company as a whole, as well as individual sales revenue goals for each member of your team. Personalizing the stakes in this way often leads to better buy in from your sales department – everyone knows they’re part of the bigger picture and will be less likely to want to let their coworkers down.
You can break this down even further if it feels too overwhelming. Come up with a roadmap of how everyone might meet these goals by highlighting how much revenue they should try to generate per week or some other period. Beyond just breaking down the numbers, this can also help your team understand how they might actually achieve their goal.
2. Increase Profit Margin or Units Sold
Increasing your number of units sold per specified time period (or the profit margin on each unit sold) can help with the revenue goals mentioned in the previous point.
Typically, companies aim for a 10% increase in this category for any given year. You may want to be more (or less) aggressive depending on trends in your industry, but 10% seems to be a pretty reasonable number most years.
The obvious goal here is that selling more units or increasing the profit margin on each unit sold increases revenue. Beyond that, looking at units sold can show you which of your products are popular so you can focus on them.
Increasing profit margin will allow you to not only generate more income, but also help you realize how your pricing strategy is working. If you can sell more units without discounts, it might be time to consider a price increase.
3. Reduce Customer Churn
In sales, we spend an inordinate amount of time chasing new leads. New customers and new markets are the shiny toy we all covet.
However, chasing down new business costs money – in generating leads, in marketing, and in hours spent trying to cultivate the leads so they become customers.
Far too often we forget about our current and previous customers as we chase after new business. This is a mistake.
It costs less money overall to sell to your existing customer base. They already have a relationship with you, they’ve already purchased a product or service, so you don’t have to spend a lot of time or money selling them on the idea of doing more business with you.
Set a goal for your team to generate a certain amount of revenue from existing customers. Set goals for upsells or cross-sells.
Beyond that, Software as a Service (SAAS) sales teams are often forced to contend with customer churn, wherein customers will leave for another company. This is even more dangerous for your business.
By reducing churn and making it a priority (alongside potentially selling more to the customers you already have), you can increase revenue and grow your business while saving money by not having to constantly be chasing new business.
4. Increase Customer Lifetime Value
Building on the last metric, you can also set increasing the lifetime value of your customers as a priority and goal.
Again, you already have an established relationship with these customers – it’s easier to upsell them on additional products than it is to convert a brand new lead into a paying customer.
To achieve this goal, you’ll need to figure out the average lifetime value of your customers and then spend time figuring out what products would go well with things they’ve already purchased from you.
This will require your sales team to do some research and then spend some time reconnecting with those customers, but the rewards are worth the effort.
5. Gain More Qualified Leads
We’ve talked a lot about your existing customers, who are often an untapped source of potential revenue – but you should always have an eye toward acquiring new business as well.
Keeping your pipeline filled with new leads is vital for any business’s continued success – so why not set a goal wherein your team will try to qualify a percentage of new leads every month?
Your sales team should already be on the prowl for new customers, so all you’ll really need to do is start tracking how many new leads enter the pipeline each month.
Spend time finding qualified prospects – you don’t want junk leads here, because that defeats the purpose of doing this in the first place. Make it a daily focus for your sales team – give them an hour or two per day to spend just tracking down new business. Create parameters for what kinds of leads you’re hoping to find.
The time and energy investment is worth it – existing customers are great, but new leads are the lifeblood of any business looking to reach the next level.
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These are just a few of the things you can use as goals for your sales team as we enter the first quarter of the new year. The beauty of goal-setting is that you can literally turn anything you’re trying to achieve into a goal with a little creative thinking and a way to track it.
Sales pros are goal-driven employees with highly competitive natures (at least the successful ones are), so odds are they’re already setting personal goals of their own. Adding team goals and specific goals for your individual sales professionals can only serve to help them be more successful by allowing them to focus on what matters most to the company and providing a roadmap to reach their objectives.
Whether you’re creating custom sales goals or relying on some of the examples we’ve shared here, it’s important to remember that you need to set realistic, achievable goals. It’s great to dream big, but creating goals that are unattainable or unrealistic defeats the purpose of doing any of this.
Goals shouldn’t be impossible – select things that will require effort, dedication, and creativity but are still in line with your real-world numbers and you’ll find your team will go above and beyond to find success.
And remember, sometimes you’ll come up short. It’s entirely possible to miss the mark but still find success. Don’t make goal-setting a zero sum game where any effort that falls short is considered a failure. Sometimes, incremental improvement over time can lead to even bigger wins.
Now, get out there and set some goals for yourself and your team. This could be your biggest year ever.
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