A team is only as good as the results they’re able to achieve. It doesn’t matter if you’ve got a spectacular team that works brilliantly together, but if they can’t achieve the goals you’ve set out for them, the team is as good as nothing.
For sales teams, it’s important to set smart sales goals that are not just achievable but also oriented towards growth, help in developing the team’s skillsets, and cover their weaknesses.
For managers, it’s not just a question of how to meet the sales goals, but also how to set effective goals that your team can collaborate on and work together on.
Let’s begin this post with what sales goals are and look into some of the sales goals you can set.
What are sales goals?
“Sell more products” or “get more sales this year” are not sales goals examples. They are goals, no doubt. But they’re neither clearly defined nor easy for teams to achieve. Even if they’re achieved, they’re not designed to help your team with anything other than meeting a random organizational metric.
Sales goals are objectives that you set for your sales team. These goals are built around KPIs, while also being tied to larger business goals.
A good sales goal can be “Increase revenue by 25% in the coming fiscal year” or “improve customer retention by 15% in February”. When crafting sales goals, remember it’s not just about big numbers. It’s about creating smaller goals to encourage your team to meet bigger goals without being disillusioned.
And remember the mantra - Successful goal-setting relies on coordinating and communicating with your team!
What are SMART goals?
SMART is an acronym for “Specific”, “Measurable”, “Actionable”, “Relevant”, and “Time-bound”. SMART goals help your team clearly understand the context and direction of a goal.
Specific
Specific goals are easy to understand. A goal without ambiguity gives clarity to your sales team.
A goal that says “We need more sales in the coming months” is neither clear nor specific, and your team will have different understandings of what “more” and “coming months” mean.
What are you trying to accomplish? Who are the members who can make it happen? When do we need this goal to be accomplished? Where is the ideal place to make it happen?
These are all fundamental questions that you need to answer before setting sales goals.
Measurable
Measurable goals have a defined starting point and endpoint. Take the above example “We need more sales in the coming months”.
When does it start? When do the “coming months” end? How much is “More sales?” The statement doesn’t answer any of these questions.
Measurable goals give you a start and endpoint, as well as a time frame to achieve the goal.
Actionable
Here, actionable means achievable. Goals are great, but they mean nothing if they can’t be achieved. If you go to your team and say “We need 1000% more sales in the next week”, that’s not an actionable goal. Although it’s specific and measurable, the magnitude of the goal is not achievable.
Look at what your statistics are currently, and create goals using the existing numbers as a baseline.
For example, if your weekly average sales is $6500 till May, try keeping your target for June at $7150. That’s a reasonable and actionable 10% increase in sales.
While setting up goals, answer the question truthfully - Will I be able to achieve this goal if I was a salesperson?
If yes, then go ahead and set the goal, if not, bring it down to a level you feel is achievable for you.
Relevant
Goals need to be relevant to what your sales team is doing. You can’t ask your sales team to make a better product. That’s not their job. Additionally, the goals also need to meet organizational objectives as well as team-wide objectives.
Setting a goal to make more sales is great, but can you handle current clients? Are there other areas that your sales team can be focusing on instead?
Asking these questions can help you and your team understand how to set sales goals and how to meet sales goals.
Time-bound
Finally, goals need to be time-specific. Creating deadlines can help your team understand when this is expected, and what kind of time can be allotted in their own schedule to achieve these sales goals.
Creating goals without a specific time will eventually lead to failure. Every goal needs a target date. Before setting a goal, ask yourself - What is the best time before which I can achieve this goal? Answering this question will help you set a suitable time frame for achieving that goal.
Here is a SMART Goals template that you can use -
Setting SMART sales goals will help both the organization achieve revenue and performance targets, while also helping the team understand and achieve their roles and responsibilities better.
High-Level KPIs to consider while setting sales goals
When setting SMART sales goals, there are some KPIs you can use as a good starting point. Here are some of them -
Monthly or annual revenue
Improving revenue is always a great sales goal to set. It’s a goal for every business out there. But use your KPIs to set clear and specific goals for revenue targets.
Customer churn
Customer Churn, or the amount of customers leaving you at any given point in time, is a metric that almost every organization wants to reduce as much as possible. Reducing customer churn is a great goal that helps improve customer retention rates. Churn signals can be effortlessly tracked by analyzing customer conversations through Rafiki.
In other words, Rafiki helps you understand the reasons why customers are leaving you. Rafiki intelligently records, transcribes, extracts and segment topics, and use them to drive KPIs.
Units sold
Units sold are pretty straightforward - how many units of your company’s product has your sales team been selling to customers? Setting a goal based on this can be easy, but it does help to do some market research. Some markets will have better performance than other products.
Annual contract value
Annual Contract Value is the yearly revenue generated from a single customer’s contract. By upgrading a customer’s service package or subscription to increase revenue, the value of a customer’s annual contract value increases, thus increasing the value of their association with the company.
Customer acquisition cost
The cost associated with acquiring a single customer is known as the customer acquisition cost. In business, it’s always expensive to acquire new customers. But by reducing the Customer Acquisition Cost, adding more customers to a company’s list becomes cheaper, ultimately improving revenue margins.
Leads qualified
This is determining which leads are likely to actually make a purchase as opposed to leads who won’t. Increasing the ratio of qualified leads can help save time, instead of chasing leads who will never make a purchase.
Win rate
The percentage of deals closed in a time period is known as the win rate. By improving the win rate, you can improve the rate at which your sales team can close deals.
The deal risk in Rafiki gives you a crystal clear picture of what’s happening in your accounts. You will understand whether the reps are handling the objections correctly, are able to engage the stakeholders effectively, and drive the discussions in the right direction to improve the win rate.
Sales cycle
A Sales Cycle is a collection of events that will happen during the process of selling a product. Shortening or improving the sales cycle can reduce the time taken to complete a sale or improve the value of a sale.
Activity-based metrics
Taking different activities, such as cold calling, following up, brand awareness, customer retention, etc, and improving the metrics on these KPIs can be a great place to set sales goals since their goals are all often tied to overarching company goals. For instance, the patience of your sales reps while handling calls could be a simple activity-based metric that you can improve. Rafiki automatically calculates the patience displayed by every sales rep in every sales call of your organization.
Bottom Line
When you set sales goals with metrics and logic behind them, achieving them becomes a lot easier for your team. If you’re looking for ways to set better goals for your team or want to know how to improve your sales team’s coordination and teamwork, check out our other blogs.
Or if you think you are ready to set SMART goals that your team can achieve, get started right away with Rafiki. Rafiki helps you measure and monitor all the metrics using robust AI technology. Rafiki also parses your customer conversations and offers you rich insights to drive your goal-setting and tracking processes.
In short, putting AI to use and setting goals for your organization has never been easier. So what are you waiting for? Check out Rafiki or book a demo now.
