Setting meaningful as well as realistic goals is a skill that all sales leaders know is crucial. When looking at sales goals, let us clarify that they need to be both meaningful, with a focus on hard, not vanity metrics. They also must be realistic to your industry, region, market, team, and organizational capacity.
One of the best ways for sales leaders to set realistic goals is first to look back. History can offer meaningful data and will provide checks and balances when dealing with projections and not actuals.
What to Measure
1. Overall Revenue Goals
What is the overall revenue goal of your department?
Depending on your role profit margin, churn, percentage of key accounts, new business growth, market share, and cost of sale, creating a system to easily view these numbers daily and track trends will inform your near-term decisions.
What is the overall revenue goal of your department? Depending on your role profit margin, churn, percentage of key accounts, new business growth, market share, and cost of sale, creating a system to easily view these numbers daily and track trends will inform your near-term decisions.
2. Performance Tracking
These are the most important metrics you track by each contributor who impacts revenue. Sales is an ecosystem, and depending on your overall goals, you will want to ensure that these most important activities will lead to success.
Depending on your sales model, you will want to track different behaviors. For a role that is solely focused on new business development, the number of accounts won and deal size are two key ‘big rocks’ followed by the activities by sellers to increase the likelihood of success.
3. Leading Indicators
Activities that lead to revenue performance and they are the few things that you will focus on to impact total revenue performance. These are the activities that you will look for to inform the likelihood of success.
Often, the number of quality appointments and closing rates are popular indicators of success. They are also easy to track with a meaningful CRM (Customer Relationship Management) and can provide insight into coaching your team.
A Model For Setting Realistic Goals
Proper measurement and tracking allow for what I think is the most crucial factor in smart sales leadership and accountability.
So, what are realistic goals now that you know why and what to measure? Using the model of must, should, could, blue sky is a fantastic way to account for the natural positive it might happen to many sellers and leaders.
- Must is the number that you must hit.
- Should is the number that, based on your plans and how you have staffed and set up your team, you should hit.
- Could is the number that if you have planned well, focused on the right metrics, and nurtured your deals and how well your sales and marketing teams are aligned.
- Blue Sky is that number, that number your organization has never hit, and I cannot imagine not having one of these; this is the number that is an indicator of your personal drives and values; think big.