How do I set sales targets for my team?
This article first appeared on May 20th, 2011.
I’m in the process of setting sales targets for my team (I have two sales staff).
I know the level of income we need to generate, but how can I set targets that are realistic to achieve for a team as small as ours?
How can I best work this out?
There are a few things about sales targets that are important.
Firstly, we need to know what revenues are required for the business to succeed.
We then need to be realistic about timelines – the lead times required by sales people, the time they need to learn about the products, services and the time they need to make and follow up contacts.
If you are starting a business there is a good chance that you will have made some sales yourself.
This can be a good starting point in setting targets, depending of course on your ability as a sales person.
I actually believe that the chief executive needs to be, among other things, chief sales person, so hopefully you will undertake a brief stint in sales yourself, so that you can set realistic targets.
Of course, as chief executive you may not be the best sales person in the business, but you will need to select the best sales people.
Assuming that your selection process is adequate, and that you have started by doing some sales yourself, you now have an even better baseline for setting targets.
If sales people are properly incentivised they will help you set targets they believe they can achieve and that are required for the business to succeed.
Experienced sales people can do this, if you have selected experienced sales people it will be even more important that you have been out with clients getting the ball rolling,s o that you understand exactly what activity and timelines are required.
An important aspect of setting targets is the management and monitoring of them.
This needs to be done weekly and with a system that shows the calls made, the response, the planned follow up and contact details of respondents.
This reporting system needs to be totally transparent so that you have these contacts and can check with them if sales are not reaching required targets.
A spreadsheet analysis to determine success rates is critical, as only then can sales people be retrained, redirected or even directed out of your business.
Attending meetings with your sales people will also assist you in establishing realistic targets.
I believe that sales people need targets that stretch but are not unachievable. They need to be monitored weekly and to understand the importance of targets set.
Excuses and lack of performance have to be dealt with quickly.
No one wins when sales people are not achieving their agreed targets.