7 Steps to Smarter Sales Goals
Are your reps struggling to hit their sales goals?
Of course, meeting a goal is always easier said than done. And we wholeheartedly believe that a good goal should require a good amount of hustle: sales can be fun, and incredibly fulfilling — but no one ever said it was easy.
But if you find your team is missing quota again and again (and again), the problem might not be with the reps you have, but rather, with the goals you’re setting for them. Maybe revenue targets are chosen arbitrarily, with no science behind them. Or the Number is impossibly high — setting everyone up for failure. Or the goal is achievable, but there’s no clear path to success.
If that sounds familiar: take a step back and run through this seven-step checklist to make sure you’re putting smart sales goals in place for your sales force.
How to Set Sales Goals
1. Set Your North Star Revenue Goal
Your north star revenue goal is the ultimate goal for your sales organization. It’s the number your team is trying to hit — as a unit — and can be a quarterly or annual number.
Identifying the north star revenue goal is the first step to setting smarter sales goals across your organization. Every other sales goal across your entire sales org should map back to that all-important number.
Note: this shouldn’t be hard, because for most sales leaders, this is your number.
2. Work Backwards to Define Your Opportunity Stages
With your north star revenue goal in place, it’s time to start reverse-engineering your sales funnel by each opportunity stage, going backwards from closed deal to RFP to demo to first meeting to...(you get the picture). The more description the better. In fact, we suggest whiteboarding the process.
Working backwards allows you to identify the lagging indicators that are directly (or indirectly) tied to getting closed/won deals. These lagging indicators will be the crux of Step 3.
3. Figure Out the Conversion Rates Between Each Opportunity Stage
Using historical numbers, figure out the average conversion rate between stages in the pipeline.
Let’s say your north star revenue metric is $500K in annual revenue per sales rep. If 50% of opportunities created lead to RFPs sent, and 50% of those RFPs tend to close at an average value of $25,000 per contract, then you need to close 20 deals to hit your number. To get those 20 deals, you will need to send 40 RFPs over the course of the year and generate 80 opportunities.
Keep the “history versus what’s possible paradox” in mind. Don’t let historical conversion rates or achievement limit your ambition (pun intended). Your sales department may have struggled converting Leads to Opps — and that’s okay; at least you know. Don’t try to hide that challenge or drastically inflate expected conversion. As you set targets and objectives for the future, you can home in on specific tactics and training that will change those outcomes. Learn from past performance and set future expectations accordingly.
4. Define the Activities That Drive Stage Conversion
Your next step is to learn which activities help deals progress through each stage of your sales funnel.
The activities that drive stage conversion are the ones you should measure and reinforce for reps. Figure out which sales motions work the best for each stage of an opportunity and incentivize whichever reps are responsible for that part of the funnel to hit their activity goals.
A key facet of sales to remember: you can only manage what you can control. And activity and effort are two things that are fully under your control. Set smart sales goals for your most relevant activities and drive your reps to achieve them every single day. This will create a system of consistency and accountability that will make your reps successful.
5. Create S.M.A.R.T. Short-Term and Long-Term Goals
Sales goals should always be S.M.A.R.T. (specific, measured, attainable, realistic, and time-constrained).
Once you know the key activity and conversion metrics that matter to your sales organization, you should convert them into KPIs using the S.M.A.R.T. goal framework.
S.M.A.R.T. sales goals stand for goals that are:
For example, a S.M.A.R.T. goal to set for each sales rep might be 50 outbound dials per day. That particular metric works because it’s specific (50 outbound dials), measurable (you can track calls in your CRM), achievable (this metric works out to one dial roughly every 10 minutes in an 8-hour workday), relevant (contacting warm leads is what creates opportunities, deals, and fat commission checks for each rep), and time-bound (per day).
Bottom line: Sales leaders should strive to convert each and every meaningful sales activity metric and sales objective for their team into a S.M.A.R.T. goal.
6. Use Clear Workflows and Automated Data Entry to Ensure Logging
It’s 2019: relying on manual data entry is so 2000-and-late. Your reps are too busy selling (we hope) to spend time maintaining detailed logs of every sales motion — calls, emails, social touches — they perform daily.
Use sales tools (think: Outreach or DialSource) to auto-log every sales activity in your Customer-Relationship Management system, and create a system of record filled with reliable data.
These tools not only empower reps to connect with prospects, but they also serve as repeatable workflows that simplify the sales process and onboarding of new sales people.
Even if you’re not using sales acceleration tools, building repeatable workflows in Salesforce can deliver major impact.
Note: You might be asking, “Why does how my data end up in our CRM matter?” But the more we know about the sales process — i.e., the data generated as a lead, prospect, and opportunity progresses — the better we can manage and coach with that data.
7. Track and Publicize Progress and Goal Attainment
The final step: track and publicize real-time progress to create feedback loops and positive reinforcement mechanisms for your reps. Once they see how they’re trending to goal, you can use SPIFFs and leaderboards to further incentivize them to reach their goals.
Goal setting is a lot of art and science — and a little bit of trial and error. At the end of the day (or month, or quarter), you’ll know you’re on the right track if you’ve set goals that challenging, achievable, and most importantly, aligned with your greater sales strategy and objectives.
All set on smart sales goal setting? Learn how to incentive your team to hit (and exceed) their numbers with these 7 creative incentive ideas (that actually work)!