Setting new sales targets? Be more scientific about it.

A great deal has been written by the experts in sales consulting cyberspace recently about the negative impact of simply increasing the sales target year-on-year by ” X” percent.

One of my first questions when consulting to senior management on this issue is “What is your reasoning for this year’s sales target increase?” Only some are able to articulate the process of how they arrived at the actual figures.  Most are based purely on historical data or straightforward financial calculations relating to retaining profit margins.

International sales research gurus, CSO Insights recently questioned why companies are continuing to increase sales targets year-on-year in the face of such a tight economy. Makes sense to me. If your entire sales team didn’t make their targets in 2010, (and missed out on any commission associated with it) then why would you still increase THAT unattained target by an additional x percent instead factoring in their actual sales? This, whilst being denied any additional budget for sales training, additional staff, support systems or basically anything that would assist the sales team in driving the new numbers.

This issue is too complex to go into detail in this little newsletter I’m afraid, but it is something that needs to be discussed thoroughly both at senior level AND with the top achievers in the sales team who are closest to clients and prospects in niche markets. 

All I’m suggesting is that more work needs to be done on setting targets in the first instance.

Just to clarify: I’m not making a case for simply reducing sales targets or keeping them static. After very careful consideration to the how, where, what and when of the sales of a company, it may become obvious that existing sales targets are actually way too low, given the amount of untapped opportunities in some emerging niche markets and the amount of resources you’ve pumped into sales.

The bottom line: Each sales rep must know how and be able to present his or her detailed territory growth strategy to their sales manager in a professional manner, based on their sales cycle, the actual numbers previously attained as well as detailed research and understanding. And then be held accountable for results. 

The sales manager needs to be close enough to the sales team to confirm or reject the proposed growth strategies based on measured facts (including activity levels), not just on his or her point of view or a  thumb suck. And be held accountable for results too. 

This more scientific approach will either validate or invalidate existing and/or new sales targets. Whilst lofty, realistic sales targets may spur some people on to achieve more than they thought possible, those which are seen to be unrealistic will simply be a demotivator to most folks out there.

Moving the goal posts too often and too far is interpreted by most sales achievers as “trying to con me out of my commission.” This is one of the reasons why we always find so many excellent salespeople in the job market, no matter what state the economy is in.

Here’s to your best personal sales year ever, regardless of the “number” placed on your goalposts.

1 thought on “Setting new sales targets? Be more scientific about it.

  1. Kim Bouwer

    Very relevant points – I was fortunate enough to work for a business that based the new year’s sales figures on the previous year’s ACTUAL revenue plus price increase plus reasonable organic growth – which made achieving the goals more realistic and attainable (not easy, but a definite push to achieve)

    Reply

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