How to set sales targets

The first step is to set a goal well — which is, in fact, where you want to go by reaching your defined goals.

Sales goal is the definition of the path, time and means that will be used to reach a commercial objective. The sales goal is important to establish the expected results and guide the sales team. To set the sales target, knowledge of the business and the market is necessary.

Have you ever heard that expression that says “the sky is the limit”?

It is not known for sure when and who first uttered this sentence, however this person was extremely intelligent in saying it.

Contrary to Edwin Aldrin’s phrase, I would say that goals are infinite, just like the sky. No matter the grandeur of your achievement or the achievement of a goal, we will always have others and others and others, and this cycle, in my understanding, only ends with the lack of ambition or with permanent rest.

The sky, in fact, is the limit for those people who never give up. Who are always looking for something more, always focused on reaching their next goal.

And, with this introduction, I leave a question in the air: what planning do you do today so that your business goals are achieved, that you have a satisfactory financial return, investment capital and interesting profits?

If you had difficulty answering that question, this post could be a great investment of your time and a source of knowledge. Read on and learn how to set sales targets in a way that makes sense for your goals!

First of all, what “train” is this? Goal?

A goal is the definition of the path, time and means that will be used to reach an objective.

With this, the objective is in fact what one wants to achieve, which is the main need or desire. And to ascend to it, it is important to move towards it. And that’s the goal of the goals!

Another extremely relevant term that we need to know is planning. The goals need to be very well described, detailed and planned so that they are well executed and have success in their direction.

It is important, then, that they are worked on and aligned with a specific objective.

In this example, a specific goal was set — “increase revenue by 10% by the end of the year”.

Note that “what you want” was described, “how much you want” and “whenever you want” .

That way, it is clear where you want to go. However, it is necessary to break this goal down into activities. A practical and efficient way to achieve this result is to complement the goal, using a method called “SMART Goals”.

SMART goals: what are they?

Meta Smart is a method created by Peter Drucker, widely used to better detail the activities necessary to complete the goals or even to stipulate sales goals in a more coherent way.

SMART is the acronym for the words:

  • Specific;
  • Measurable;
  • Achievable;
  • Realistic;
  • Time-based (limited to time).

In a smart goal is detailed, each project participant knows for sure what they need to do and when to do it. When a goal lacks detail and doesn’t follow SMART guidelines, it doesn’t lead to any action. With that, it does not generate productivity.

How to set sales targets

“The best way to predict the future is to create it.” (Peter Drucker)

Now that we know what goals are and how we build them, how can the commercial area set sales goals and how can we plan to achieve them?

Don’t forget that, before setting sales targets like Agro farms , you need to know your objective, which is actually where you want to go. That goal needs to be something measurable and achievable.

Let’s put an example to make this topic more didactic, since the subject is very delicate and needs a lot of attention and study so that actions that will not be directed to your objectives and goals are not applied.

Let’s assume that a company needs to increase its sales in line with the company’s growth goals.

For this, this company needs to define this increase. Assuming that, for this example, the company wants to achieve year-end revenue of $1,200,000, it needs to receive $100,000 in revenue per month.

At this point, it is important to define your average ticket (the value is determined by the average between the amount of your sales and the number of products sold that generated this amount), which in this case is BRL 100, and also, if your company is already on the market for a few years, statistics from previous years.

Example of Average Ticket Calculation:

Example of statistics from previous years:

Thus, a metric will be created that will help predict the percentage of sales in each period, which will help in planning sales and goals. If your company is newly created and it was not yet possible to measure this data, it is necessary to know what is the growth percentage of the market segment in, which your company is inserted and what is the expansion forecast for the following year. This information can be found in trade associations, newspapers, on the internet and even through your own research, especially when it comes to local businesses.

Another tip is to use tools to help your company set sales targets.

  • In the Marketing Funnel tool  you can create a funnel expectation for the desired revenue in your company:

Click here to access the Marketing Funnel tool!

  • In the Sales Funnel Benchmarking tool, you will know the performance of your business’s sales funnel and compare it with that of companies operating in the same sector as yours:

Click here to access the Sales Funnel Benchmarking!

Returning to the definition of goals and our example: if this company needs to receive R$ 100,000/month in revenue and its average ticket is R$ 100, it is necessary to sell an average of 1,000 accounts of its service per month or 12,000 accounts per year to close your goal.

Currently, this company has 5 sales teams and each team has 10 sales representatives, that is, 50 representatives.

The commercial goal needs to be passed on by the team and will then be reorganized by each representative. If it were simple, you could just pass the total goal on to the sales team. It would look like this:

If you need to sell 1,000 accounts a month and there are 50 sellers, making a simple account would require each seller to make 20 accounts a month, right?

Well, it’s not that simple!

On top of all this, it is essential to know the market well. And in order to reach that number of sales, it is necessary to measure the work done by your team to generate a sale. You need to know what activities will be required by the seller to reach that number.

For example: for a salesperson to reach a sale, he needed to have talked to x people to make a closing. For this seller to talk to x people, it was necessary to prospect y people. And to prospect y people, a listing with z people was needed. It got a little complicated, didn’t it? Let’s make it easy:

As an example, the technology market that is using Inbound Marketing and Content Marketing methodologies to generate customers will be used here.

Putting the goal stipulated above in the Marketing Funnel tool, we have these values:

In other words, for this company to reach the stipulated goal of reaching 1,000 customers in a month, it will need to have this activity described in the sales funnel above.

Reading the funnel would look like this:

  1. It was necessary for the website of the company in question to receive 430,663 visits;
  2. From experience, using the Inbound Marketing strategy, this value would generate 2.6% of conversion, that is, 11,111 Leads (interested in the offer made available on social channels);
  3. From this number, 3,333 opportunities would arise or 30% of the number of Leads (which are possible customers, already engaged with the topic) that will be forwarded to the sales team;
  4. And, finally, this amount of opportunities could generate 30% of customers, which is the 1,000 customers needed to reach that goal that was defined back there.

Phew!

It was only possible to reach these values ​​because all these sales stages, arranged in the funnel, were measured. Thus, it becomes feasible to provision revenue.

Essential steps in building the activity of your sales team to achieve the designed goals and objectives

  1. What is the amount of the desired recipe?
  2. How much is your average ticket worth?
  3. How many sales will it take to reach the revenue amount?
  4. How many opportunities does your seller need to contact to generate a sale?
  5. What average time of each contact?
  6. How many opportunities can your salesperson talk to per day?
  7. How big is your sales team?
  8. How much is your Customer Acquisition Cost (CAC) worth?
  9. Is monthly and annual monitoring carried out to measure temporary sales?

These steps above are basic for any sales planning. And, when made available in spreadsheets and reports, there will be the possibility of daily monitoring and creating metrics and actions to enhance the performance of your area and team. The more information the better!

Realize that the goal has been set and sales targets planned. Now, it is essential that sales professionals are prepared, trained and well oriented in this direction. Because, in addition to planning and setting sales goals, the development of the sales team is a crucial part of achieving these goals.

In fact, I’ll modify that last sentence on my own. The development of the sales team is crucial for the achievement of goals and, for this reason, it necessarily needs to be included in the planning of the goal.

But this part is so important that there will be a specific post to talk about how to leverage the results of a sales team through team development. Wait!