Did you meet or exceed your personal sales goals last year? Whether you achieved them or not, chances are you’re looking at higher targets this time around.
The improving economic outlook, coupled with a need to play catch-up in terms of top-line revenue, has led many companies to ratchet up sales targets for 2013 – some by as much as 35% over 2012.
Whether you’ve been handed a stretch goal like that, or are setting one for yourself, now is the time to take stock.
Look back at your successes, decide what you want to keep doing and figure out what needs to change.
Research shows that top sales performers set goals and monitor their progress to achievement. The key is to translate your revenue goals and income goals into quarterly, monthly and weekly activity goals.
For example, if one of every three proposals closes (a traditional average), and each one is worth $10,000 to you in commission, to make $200,000 you need to deliver 60 proposals, or five per month – just over one per week. (You’ll want to adjust the numbers to reflect your own experience, of course.)
Getting it right
The key to accurate goal setting is to invest the time needed to do it right. Resist the temptation to simply ramp up last year’s numbers and hope that some combination of luck, an improving economy and trying harder will get you there. It won’t.
To set realistic and achievable goals, follow these steps:
1. Start with top-line revenue. A lot of metrics are worth tracking. But there’s a reason why revenue is still the most common metric for sales goals. It’s what you, the salesperson, have the most influence over.
Is your revenue goal close to what you generated last year? One common error is to set this year’s goal based on last year’s goal instead of results.
By comparing this year’s goal with last year’s revenue, you’ll know what you have to do. If it’s reasonably close – say, within 10% – you can probably get there by tweaking what you do. If it’s higher than that, you probably need to consider making some major changes.
Those changes don’t have to be all on you. Ask your sales manager how the company set the goal, and what it plans to do differently to help you get there.
2. Break it down. A big target can seem overwhelming. The key is to break it down. You probably won’t find one magic bullet to get you all the way there.
Let’s say you aim to increase sales by 20% over last year. Better prospecting might get you 5%. Better closing, another 5%. Upselling and cross-selling, 5%. Focusing on large accounts, 5%. Now it’s looking doable.
3. Examine your pipeline. Factor in deals already in the works that are likely to close in the first quarter (or later, based on your sales cycle). There may also be repeat sales you can count on, from existing customers.
Account for these deals in your plan. That could significantly reduce the amount of new business you have to win.
Keep in mind, however, that the pipeline giveth and the pipeline taketh away. Some of your late-in-the-year deals won’t get booked until 2014.
4. Review current customers. Existing customers present the best chance of additional sales. Look to see if there are other solutions you can provide. Also, revisit prior proposals to uncover opportunities for additional work.
Set a realistic target for growth in current accounts, and include that number in your plan.
5. Calculate retention. Salespeople tend to be optimists. But you’re going to lose some business this year. The question is how much.
Again, start by looking back. What’s your typical churn rate over the past several years? Is there reason to think it will be higher or lower this year?
Then do a customer-by-customer analysis. Who’s at risk of leaving? What are the odds? Which ones can you realistically influence? A good strategy is to identify which customers are at risk, peg a revenue number to that book of business, and pay close attention to them.
6. Buy some insurance. Add another 20% on top of your goal for insurance. If you lose a big account or one of those pipeline deals turns out to have been a pipe dream, you’ll still be on track.
7. Set activity goals. By now you should have a clear road map to your goal. The final step is to translate the revenue goal into activity – how much of what you must do to stay on track.
For example, if your plan involves cross-selling, figure out how many cross-selling opportunities you can expect, how many will close, what you can cross-sell and how much each deal is worth.
Go through each element of your plan and come up with activity metrics that you can use to stay on track throughout the year.
Source: Based in part on a posting by Kendra Lee. Learn more at: www.klagroup.com
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