Many businesses struggle with setting realistic, measurable sales targets. When the target is set too high, it often feels unreachable, but if it’s too low, it can limit the sales team’s potential. The result? Operational costs don’t match up with the returns. That’s why it’s crucial for businesses to know how to set the right targets to drive growth and stay competitive.
In this article, we’ll dive into everything you need to know about creating precise and achievable sales targets.
Contents
What is a Sales Target?
Sales targets are goals the sales team or organization aims to hit within a set timeframe. These targets act as both a guide and motivation, helping the team stay focused and driven toward achieving specific results.
For example, a business might set a target of closing 4 deals within 2 months. Or, if the team was previously doing 5 customer visits per day, the new target might increase that to 8 visits per day.
Who Should Set Sales Targets?
The sales team manager is the one responsible for setting sales targets. But that doesn’t mean only managers play a role in deciding these goals. To make sure the targets are realistic and achievable, managers should involve the field sales team in the process.
This is key because they are the ones working on the front lines and clearly understand the challenges and opportunities they face.
Additionally, managers will use past performance data to help set the targets. This data shows what’s been achieved, what needs to be maintained, and which areas need improvement.
By doing this, the targets will be more in line with the reality of the field, while also motivating the sales team to work at their best to reach those goals.
How to Set Realistic and Measurable Targets for Field Sales
Sales targets will naturally change over time due to various factors like shifts in the business environment, market trends, and other internal and external conditions that impact sales performance. Because of this, it’s important to set sales targets based on accurate, up-to-date data that reflects the current situation.
Consider the business situation
The first thing businesses need to do when setting realistic sales targets is to consider the current business conditions.Â
For instance, they should identify the factors influencing their revenue. This might involve asking questions like: Does the business have high operating costs or large profit margins? Does it have a loyal customer base and a steady income stream? Or are there external factors, such as economic conditions or market trends, that could impact sales?
By considering these factors, businesses can get a clearer picture of their revenue potential and ability to hit sales targets.
Analyzing both internal and external conditions will help businesses set more realistic and measurable goals, allowing the sales team to stay focused and work efficiently toward achieving those targets.
Take economic conditions into account
The next step is to consider the current economic conditions in the industry where your business operates. For example, look at changes in consumer shopping habits or new regulations that could have a big impact on sales.
Take the time to dig deep and identify as many factors as possible that affect both revenue and the performance of your sales team. Stay aware of trends, opportunities, or challenges that could influence sales, like increased competition, shifts in customer preferences, or economic conditions that could impact purchasing power.
Evaluate the revenue generated
Check how many deals each field salesperson has successfully closed and the revenue they’ve generated in recent years. With this data, businesses can estimate potential growth for the upcoming year. This evaluation also helps set the right incentives for field salespeople who turn potential customers into loyal, repeat buyers.
Get feedback
As mentioned earlier, when setting sales targets, managers should involve field sales and ask for their input. After all, they’re the ones who interact directly with customers.
Field sales can offer valuable insights about certain factors or point out issues with specific target goals.
For example, there might be areas or regions targeted for potential clients, but field sales are struggling to convert prospects into actual customers.
In situations like this, businesses can use the consumer data collected by field sales to identify the problems and come up with solutions.
These solutions can then be turned into more realistic and specific targets for the sales team, making sure the goals align better with the actual conditions in the field.
Consistent evaluationÂ
The final step is to stay consistent in evaluating sales targets. This is crucial because things like economic conditions, consumer behavior, and market trends are always changing, which can impact the sales targets businesses set.
Regular evaluations help businesses stay adaptable to these changes. It’s a good idea to schedule these evaluations at regular intervals, like once every two months for the first six months. This way, businesses can adjust their targets to stay in line with the latest conditions.
Setting Realistic Sales Goals with LOKASI
LOKASI is a geospatial analytics platform that combines location intelligence and data. By using LOKASI, businesses can get a clearer view of their sales areas or territories and access consumer data collected by field sales. This information helps set realistic, measurable sales targets that align with current market trends.
To learn more about how LOKASI can benefit your business, reach out via email at [email protected] or WhatsApp at 087779077750.
FAQ
Steps to set sales targets?
To set sales targets, start by understanding the overall business situation. Consider the economic conditions that might affect customer purchasing power. Next, evaluate past earnings to spot any growth trends. Gather feedback from the field sales team who interact directly with customers, and make sure to regularly evaluate your targets so they stay relevant to market changes.
What are the 5 steps to develop a sales strategy?
To develop a sales strategy, follow these 5 steps:Â understand the business situation, including market position and internal strengths, consider economic conditions that could affect customer purchasing power, review past revenue to identify sales trends, get feedback from the field sales team for direct insights, conduct regular evaluations to ensure the strategy stays aligned with market developments.
How are sales targets set?Â
Sales targets are set by following several key steps: analyzing business conditions, understanding economic factors, reviewing past income, gathering feedback from the field sales team, and consistently evaluating the targets to ensure they stay aligned with current market conditions.
