“You know what would be fun? Talking about sales targets!”
—Literally no one ever
Yes, talking about sales targets is usually a nauseating topic because many of them are not reasonable and can leave your team’s morale in the dump. But what if we could discuss how to make thoughtful sales targets that are motivational for teams and cause increased collaboration and communication across the board?
And if these revamped sales targets generated qualified leads and impactful sales, then they could actually be something to look forward to.
Sounds ridiculous, right? But it’s completely doable.
At RingCentral, we’ve helped many sales teams communicate and collaborate better with both prospects and clients. We understand that making actionable, achievable sales targets is not just how you stay in business, but how you grow.
In this post, we’ll share different tactics and tools that will help clarify what retail sales targets are and how you can set goals that motivate your sales team.
Here’s what you can expect to learn in this article:
- What sales targets are and why they’re important
- 5 common sales target mistakes
- How to make clear, reachable sales targets
- Types of sales targets
- 5 steps for reaching your sales targets
- Starting the sales conversation
What are sales targets?
Sales targets are the number of sales or units a team leader decides their team should make in order to hit projected sales goals in a given amount of time. Basically, these show how much money your aim to make in a specific block of time.
Sales targets and KPIs are important to the overall growth of a company and helps you track and project your revenue over time. Having thoughtful sales targets will not only keep your company in business, it’ll also help you estimate your future growth and understand what changes to make in order to continue to stay on time and under budget.
Small businesses need sales targets just as much as large enterprises do. Growing your business is only going to happen through authentic connection to your prospects and the sales generated from customer loyalty, so the more you can find how to serve and show your customers appreciation, the stronger your sales will become. However, it’s still easy to fall into common traps when setting sales targets.
5 common sales target mistakes
It’s easy to get hyped up and build (overly) lofty goals to crush sales from quarter to quarter, which is why many sales leaders fall into these common traps when making sales goals for their team:
1. Your lead generation needs work
Getting a bunch of leads may seem great, but getting qualified leads is much better. If your lead generation metrics aren’t bringing in the right folks and your sales team simply can’t close deals because they aren’t the right prospects, then your sales targets aren’t the issue—it may be your approach to lead generation.
Today, too many businesses set a very low bar for what qualifies as a sales lead and it’s led many sales teams to rethink the old way of doing lead generation. For a long time brands have treated downloading a white paper the same way as a demo request.
The fact is, consumers have more power than ever and as a salesperson, one of the best things you can do is work closely with marketing to produce assets that address every common objection that you hear on sales calls.
The more insight you can provide to your marketing team around the needs and wants of your best leads, the more they can help you warm up leads more quickly. Using modern demand generation strategies, your marketing team can help you get the most relevant content in front of your target audience.
In many ways, the key here is to treat prospects the way you would want to be treated. Don’t call a new contact after they download a white paper. Give them the information to do their own research and the time to raise their hand when they’re ready.
If you absolutely can’t wait, then at least make sure you’re taking a highly personalized approach. The last thing a consumer wants is to get a highly impersonal, generic sales pitch email.
These steps will help ensure that your sales team isn’t having to work towards something that could never happen.
2. Your metric tracking could use an upgrade
Are you tracking which leads are closed in a month? What about the number of qualified leads you’re bringing in in a week? Look at the numbers and make sure you are tracking the key performance indicators that translate to sales for your team. If your metrics aren’t informing on potential growth, you might be tracking the wrong thing.
Instead of trying to manually figure these numbers out, use a tool that’ll do it for you. For instance, RingCentral’s Contact Center comes with dashboards that does the reporting for you:
3. Your team is suffering from low productivity.
Whether you find that your team is juggling too many pieces of sales software to be effective, having ineffective sales meetings, or spending too much time on menial tasks like manually dialing prospects, the good news is that there are many tools that can help. For example, there are CRM integrations like RingCentral for Salesforce that can help eliminate hopping back and forth between tools:
And then there are integrations with tools like Salesmate, which helps improve dialing time and note taking:
4. Your goals aren’t thoughtful or firm
Think of it this way, you want to make goals that are concrete and understandable, so when you sit down with your team to do this, make sure your goals are SMART: Specific, Measurable, Actionable, Realistic, and Time related.
Making SMART goals that fit your business and your team’s expertise will help everyone to know what you’re trying to accomplish and how each of their skills can play a part.
What’s an example of a good SMART goal? Each month, I will contact 10% more prospects than the former month.
A bad SMART goal? “I will contact more potential clients than last month.”
5. Your teams are disconnected (specifically your sales and marketing teams)
Does your sales team know what your marketing team is pushing? Does your marketing team understand the language your sales team is using to close deals? If not, it’s past time to get these two teams into a room together.
Consider having regular, collaborative meetings where sales can discuss their pain points with marketing, and vice versa. If everyone knows the issues the other one has, then both teams can work together to make sure they’re communicating to prospects effectively and bringing in the right types of leads and clients for your company.
How to set clear, reachable sales targets
First things first, sales targets should be both attainable and motivational. Having a reach goal motivates employees to stretch themselves and push harder, finding creative ways to reach prospects (which can result in more sales). But if sales goals are too high, it can have the opposite effect, causing disillusionment within the sales team and overall low morale and poor sales.
What you should be trying to strive for is the happy medium. You don’t want to overwhelm your sales team by chasing after unrealistic goals, but you do want to motivate them. So start by getting everyone on the same page:
Start with: Setting a monthly goal and check in every week to see how things are going with both sales and marketing. Make sure these teams are communicating with one another so they know what the other needs in order to do their jobs well.
Remember: The SMART goals you make should be collaborative, meaning you need to get the team involved and make sure it’s not just a top-down decision. Goals that your team have ownership of will be goals they are willing to work towards.
The 3 steps to get there:
- Step 1: Calculate your average close rate and from there, your sales goal. Your close rate is the number of sales you made divided by the number of leads you reached out to. So if you made 10 sales and reached out to 200 leads, your close rate is 5%.Once you know your close rate, you can make new sales goals. Remember to consider checking in with your lead generation metrics to make sure that the leads you are getting are qualified (or that you’re finding out what makes the ones you sell to qualified) so that you can continue to target the correct demographic.
- Step 2: Let’s do some quick math. If your company needs 15 sales a month and it typically takes contacting 200 leads to get 10 sales, you now know that you’ll need to contact 300 leads to keep your 5% close rate and boost your sales to 15. Simple math, right? Right.The glory of this is that once you figure out what types of leads aren’t just warm but are also qualified and a good fit for your company, then you can hone in on that group instead of just fishing for any old lead. Not only will this help boost your sales and close rate, but it’ll also inform the types of leads your marketing and sales departments should be catering to, so you work smarter, not harder.
- Step 3: Integrate tools that will help you hit these goals. Make sure that whatever your salespeople use most, whether it’s email or good old phone calls, the apps they’re using makes that job easier. For example, if you can combine team messaging into your phone service and have video calling too? That’s helpful because it reduces the amount of time a salesperson has to switch between tabs and windows looking for the right app:
Common types of sales targets
You got the numbers in your head now? Good. Now let’s talk about different types of targets and how they can benefit your team.
Okay. It’s not realistic to make a goal that goes from 10 to 100 units sold in one month (and goals like this are likely to have your sales team working on their resume over their lunch hour). This is why waterfall goals are a great starting point. If you need team members to send 70 emails out a week but they’ve been used to sending out 30, have them start by upping their email goal at 40, then 50 and so on.
Work with your team closely to see what issues may arise and remember to encourage them and troubleshoot as you go. The idea with waterfall goals is that incremental goal achievements will boost morale and help inspire confidence and determination to continue pushing towards larger goals.
Some stretch goals might feel a bit “pie in the sky”, but the idea behind these is to create a greater achievement that can create camaraderie and something to strive for company-wide. That said, these goals should not be focused only on sales, but all departments should carry some of the weight in an attempt to hit these goals.
Stretch goals are great for a high performer or for a team to work on together, so go ahead, try for the 110% goal. Just don’t mistake this goal as a good tactic for an underperformer as it can cause undue anxiety.
Based on a salesperson’s performance, activity goals help them track what their old metrics are in order to reach new goals.
Hubspot1 explains this goal like this: Let’s say they have to close an average of four deals per month to hit quota. If 50% of their demos convert to deals, that means they must demo to eight prospects each month. If 30% of their calls lead to demos, they need to call roughly 27 people.
Working backward lets you turn a (potentially intimidating) revenue goal into manageable metrics:
This helps team members prioritize their goals so they know exactly what they’re attempting to grow towards. A 10% goal increase would be a great way to start and finding one area to increase in (emails, calls, etc) keeps the goal attainable.
With sequence and activity goals, it might be a great visual representation of these metrics by setting up a sales leaderboard where your team can view it with ease. Competition is always a great motivator, plus it helps team members see not only who they are competing alongside, but how they can compete with themselves.
And speaking of incentives…
Incentivizing your goals
Having lofty sales goals so that the company grows is great, but making sure you keep morale high and remember to show your sales team appreciation is how you will build a loyal employee base.
Cash bonuses for meeting certain goals is an incentive most sales reps will run towards, but you can also mix things up and give away more vacation time, weekend trips, and fun gifts like a nice camera or close parking spot from smaller goals. Just remember to show your sales team you appreciate them and their hard work and for the larger the goal achieved, the nicer the incentivized prize should be.
Five tactics that will help you hit your sales targets
1. Focus on QUALIFIED leads.
Don’t spend any more time on contacting any old lead. A lead, even a warm one, isn’t going to bring you a sale if they aren’t a fit for your company. Take the time to survey your past clients and find the pattern that emerges.Also consider aligning yourself with people who can bring you more leads. File through your LinkedIn and Twitter rolodex and start talking with like minded entrepreneurs to find what has worked for them. This is also a great way to build your brand and build community.
2. Improve your close rate.
We talked earlier about how to calculate your close rate as a reference point. Now that you know this number, you can make a new, reasonable, goal based on metrics that you think you can hit in a given amount of time. Remember to set a specific time limit on this. Nothing motivates quite like a deadline.
3. Ask for referrals.
Don’t be afraid to ask past clients and collaborative businesses for referrals. If you have worked with someone and they are satisfied with your business, then there’s no reason to ask.
4. Pare down the length of your sales process
This points directly back to the first point. If you have qualified leads, you aren’t wasting your time chasing a lead that’ll never amount to anything. Also consider making the sales process as easy and fast as everything the prospect needs at their fingertips. Ever heard of Amazon? Yeah, there’s a reason why the UX is so good. They make it easy to find, research, and buy what you’re looking for.
Of course, if you’re in B2B sales, you may not always be able to reduce your sales cycle too significantly, since you’re often dealing with higher prices and more stakeholders involved in the buying process.
5. Communicate with your team
It’s not too much to say you should know what your team is working on daily. Even if you make sales goals that the company is working towards, there’s a lot more going on to keep your company running than just closing sales, so make sure everyone is on the same page.
Consider a quick Slack check in every morning and using a performance management software like 15Five to check in with your team in more detail. Good communication is never a bad thing, and the more you can help align your team’s goals, the more likely hitting those sales targets becomes.
The best way to measure performance accurately is to keep the lines of communication open and check your pipeline often. If something changes for good or ill, see what caused that change quickly so that you’re not sitting on unanswered questions that could hurt your business over time. Consider using a CRM that uses AI to help streamline your workflow and communication so that you can focus on your sales targets rather than juggling communication issues.
Where to go from here: start hitting your sales targets more consistently
If you think about it, sales targets are all about strong communication. If your sales team is on the same page, you’ll all understand what your goals are and how you can meet them together.
This is the same for starting the sales conversation with prospects. You know your product inside and out, and helping your prospect see your product the way you do is the goal.
More than anything else, starting the sales conversation is about building rapport with the prospect. Have your sales team work on understanding their pain points and get to know them on a personal level so they know exactly how your product can help them.
Instead of starting with a hard pitch (which can come across disingenuous), train your sales team to ask questions about the prospect. Often the more questions you ask, the more the prospect will tell you exactly what problems they have, and might even end up asking how you can help them solve them.
Stay organized, know your team’s strengths and weaknesses, use CRM’s and leaderboards to help you with some of the heavy lifting and keep you informed, and don’t bite off more than you can chew. Sales targets are about making incremental steps towards success and you don’t have to get there overnight—you just have to get there.