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Setting Sales TargetsContact usMarketing & Sales Tips

by Joyce Hayne

As companies are finalizing plans for the new year, it’s an important time to work with your sales team to set sales targets.

Sales goals should be related to the size and quality of the leads in each rep’s pipeline. That means there should be a specific number of leads in various stages of closure, from an unqualified lead through to a prospect that is ready to close. There should also be criteria set for evaluating the quality of those leads. How well do they match your perfect prospect? A high quality lead is one that provides a high rate of return business along with a strong profit margin.

How many new leads should be added to the pipeline each week? Unless you have a constant flow of new prospects, your business will never grow.

You also need to review the process for managing leads from qualification to closing. Is marketing responsible for generating leads and then passing them along to the sales team?  At what stage does that occur? What happens when a new prospect is found? Do you mail or email the person or does a rep make personal contact? How do you keep that prospect engaged with the company throughout the process? Are they added to your newsletter distribution list or put on some type of drip marketing campaign so you can stay in constant contact with them?

You need to get your sales teams’ commitment to these goals, so help them see what’s in it for them in terms of higher sales and increased commission. Use a CRM system that will make tracking easy with the built-in tracking tool, and be sure everyone on your sales team is using it.

You can work backwards from your overall company sales goal to set targets for each rep, and then calculate how many calls are needed each month to achieve that goal. Divide the dollar sales by your average sales to get the number of new customers needed. Then multiply that number by 3 for the number of opportunities that are at the proposal stage. Finally, take the number of new customers and multiply that by 8 for the total opportunities needed in all stages of your pipeline.

For example, if a rep has a sales goal of $1,000,000 and your average sale is $50,000, that rep needs 20 sales to reach the goal. This means 60 proposals will need to be submitted throughout the year - with an average closing rate of 30% - and 160 leads will need to be produced throughout the year.

Once your targets have been set, meet with your sales reps weekly to check on their progress in achieving their goals. Don’t wait until it’s too late to make corrections, or you’ll never reach your company’s goals.

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