How To Set Sales Targets

How To Set Sales Targets

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Sales people need targets that stretch them but are not unachievable. To set achievable sales targets, a few things are important:

  • Revenues. Determine what revenues are required for the business to succeed.
  • Be realistic about timelines. These include the lead times required by your sales people, the time they need to learn about the products and services, and the time they need to make appointments and follow up contacts.
  • Sales people meetings. Attending meetings with your sales people will also assist you in establishing realistic targets.
  • Incentivise your sales team properly. This will encourage them to help you set targets they believe they can achieve and that are required for the business to succeed.
  • Ensure that the sales team is managed and monitored. This needs to be done weekly and with a system that shows the calls made, the response, the planned follow up and contact details of respondents.
  • Reporting system. The reporting system needs to be totally transparent so that you have these customer and prospect contact details and can check with them if your sales people are not reaching required targets.
  • Spreadsheet analysis. A spreadsheet analysis to determine success rates is critical, as only then can sales people be retrained, redirected or even moved out of your business. Excuses and lack of performance must be addressed quickly.

How to set up sales territories

Define sales territories to create the most efficient environment for your sales team.

Poorly aligned sales territories can lead to low employee morale, lost clients and wasted resources. Here are some tips for setting up optimal sales territories.

Keep your goal in mind

Before you start carving up the map and sending your sales team out on the road, think about what you want to achieve. This will enable you to determine your revenue target.

  • How will you allocate sales staff?

A small business is unlikely to have a large sales team. Start strategically by meeting revenue goals in small areas and then gradually growing the territories. By the time you’ve built up a base with a sales team and some clients, you can start thinking about how to allocate the sales staff. The key is to create balanced territories that match your investment in sales people.

  • Do the research

Preliminary planning will help you set up your sales territories. What kind of clients are you going after, where are they located, and what resources do you need to reach them?

 

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Many companies use some form of marketing database software to figure out the best way to establish their sales territories. This will show you what each hypothetical sales area would look like in terms of size and profitability.

Start by ranking customers or clients into different categories based on the percentage of revenue they generate versus the time spent servicing them. Those at the top will be the most reliable, followed by those who are promising but work-intensive, while the rest may require a lot of effort for little return.

  • Review territories periodically

Review your territories regularly to make sure they are functioning properly. Don’t make the mistake of changing territories to address poor sales staff performance. The purpose of a sales territory metric is to create balanced sales territories.

Messing with territories too often can also harm your relationship with customers in those territories. If a sales rep is not performing well, think about changing the rep rather than the territory.

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Ivor Jones
Ivor Jones is the chairman of ThinkSales Corporation. He was employed by Dun & Bradstreet from 1972 to 1981. In 1982 he launched KreditInform, building it into South Africa's largest business-to-business credit management solutions company. It was sold to Experian in 2008.