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How to set smarter sales goals for you and your sales team

Setting Sales Goals
How to set data-driven, smart goals?
How to smash your sales goals
How sales reps can avoid and manage stress
Common psychological barriers to selling
Final thoughts

Setting sales goals for your team is an important part of a sales manager’s role. Smart sales goals are activity-focused and achievable, without being too targeted on hitting numbers.

The biggest mistake a sales manager can make when setting their team’s sales goals is focusing solely on the numbers.

Sure, you want to drive more sales, increase revenue and strive for greater success, but without a solid plan detailing how to achieve a tangible set of goals, it’s unlikely your team will make your number.

You also need to consider the overarching long-term business goals of your company. In an effort to hit sales targets, reps can chase bad, unprofitable, high-churning deals. This can have serious ramifications for your company’s reputation because reps over-promise and your product or service then under-delivers.

Importantly, you want the numbers you settle on to be achievable and motivating. If reps feel their targets are unreasonable and unachievable, they will spend more time interviewing at other jobs than focusing on hitting your revenue goals.

In this article, we’ll explore why and how to set sales goals and ways to educate and empower your salesforce to achieve them. We’ll also look at how to leverage data when setting sales goals so that you’re choosing achievable objectives for your sales staff and creating realistic forecasts for your business.

Key takeaways from this article

SMART goal setting: Utilize historical data and a bottom-up forecasting approach to set data-driven, SMART goals for your sales team that are specific, measurable, achievable, realistic and time-based.

Overcome p[sychological barriers: Emphasize activity-based, realistic and motivating sales goals to manage common psychological barriers in sales, like fear of failure and loss of focus.

Leverage Pipedrive’s CRM tools to streamline goal-setting, track performance, and support your team in achieving their sales targets. Try Pipedrive free for 14 days.

How to set data-driven, smart goals?

Use the SMART methodology to guide your strategy when creating sales objectives.

  • Specific: A clear definition of what the goal is and how you plan to achieve it

  • Measurable: Make sure you can actually measure the goal

  • Achievable: Ensure it’s not overly challenging or stressful to reach

  • Realistic: Confirm it aligns with your organization-wide business goals

  • Time-based: Set up realistic time frames in which you want to reach them

Use these factors as a checklist to validate your planned sales goals and targets. Ultimately you want these goals to motivate your team to exceed expectations and drive your business towards new levels of success.

Setting sales targets from the bottom up

In order to set targets for your team, you first need to understand how to get there.

Handing your team a quota without considering a plan of action to meet that number is unreasonable and unhelpful. While it’s important to challenge your team to meet targets, you need to be both realistic and strategic.

Tom Pepper, Director of Marketing Solutions at LinkedIn, shares how a well-researched, bottom-up revenue forecast is fundamental to setting your sales goal:

Build a bottoms up forecast to get visibility into the business, then set a stretch goal on top. A target should feel ambitious but achievable – as a guide, feeling 80% confident hitting your number is about right. This approach is centered around assessing your current situation and capabilities to see what you can reasonably achieve from there.

The next step is to translate this forecast into sales goals for your team.

Sales leaders need to strike the right balance of growing your business and pushing your team too much. If quotas are really unattainable, the team will be demotivated.

Make data your goal-setting friend

Let data guide your goals. Look at historic growth rates and past performance of the best sales reps. Also, break the target into easier chunks to digest.

Why not try using driver trees: a visual slide that shows your reps how you got to that number with the inputs that they control. For example, if you call X leads this month, assuming Y conversion rate and an average deal size of Z, you hit your target.

Working backwards from your company’s annual revenue target gives you a realistic view of the activities required to drive the desired result, and helps you to determine what’s achievable.

Let’s do some quick math with a salesperson goal-setting example.

Look at a given team member’s past performance and figure out how many calls, emails or sales meetings they typically need to close a deal.

  • If it takes them 10 calls to make a sale, then their close rate is 10%

  • Now calculate how many calls they need to hit their target

  • If you want them to close 50 deals this year, they need to make 500 calls

  • Breaking that down into smaller targets means an average of 40 calls per month or 10 calls per week (taking leave into account of course)

Breaking down your annual target into smaller monthly or weekly chunks will create a sense of immediacy for your sales team to start working towards their target right away.

Set smaller targets to achieve bigger goals

In sales you can't control the results, but you can control the actions and the inputs of that process.

Only setting result-oriented sales goals can be damaging for your team and your bottom line. Instead, set smaller sales activities goals that help you incrementally reach the bigger ones.

For example, rather than telling your rep they need to close 50 deals this year to meet quota, tell them they have a lead generation activity goal of making 10 cold calls and sending 5 follow-up emails each week. Results-oriented goals can feel daunting and make reps feel like they’re spinning out of control, so empower your team to take charge of their actions with practical daily activities.

Setting achievable sales objectives that your sales team can control is pivotal to boosting morale, motivation and confidence. This will also help keep your team on track throughout the year, enabling you to monitor their progress more effectively.

Remember, no two sales reps are created equal. Skill sets, strengths and experience will vary. Keep this in mind when you are working with your team members to set realistic goals to meet their quota.

Educate and empower your sales team

Don’t let revenue monopolize your focus when you set goals for your salespeople. Instead, think about setting goals that will inspire your team to sell better.

Speak to them about their strengths, weaknesses and the areas they are looking to improve. This could be something as simple as improving product demonstrations or building confidence with executive conversations. Set aside time to coach your team and set targets to help them achieve their personal and professional goals.

Additionally, ensure your team has a thorough understanding of your product, the sales plan, the average sales cycle and the overall sales strategy. Make sure to include them in discussions when considering objectives, as they are on the front lines talking to prospects and carrying out sales activities every day. Incorporating their feedback into your decision-making not only helps you set better goals, but inspires a culture of teamwork and collaboration.

Your team wants to know that you value them enough to invest in them. Encouraging your team to grow professionally, and taking their opinions on board, will result in stronger performance and more targets reached in the long run.

How to smash your sales goals

Firstly, take time to build your strategy in advance and, importantly, plan for failure. No sales manager sets out to fail, but roadblocks are an inevitable part of business.

Meticulous planning doesn’t just involve looking at what resources you have in place to achieve your goals, it also examines the gaps and the obstacles.

Developing a proactive plan to deal with setbacks puts you in a powerful position to troubleshoot quickly. Your plan doesn’t have to be exhaustive, just follow this quick process.

  • Identify barriers to success: Figure out what can hold you back from reaching your goals (e.g. restrictive budgets that don’t allow for new sales hires, or a lack of comprehensive tools like a CRM platform to streamline your workflow)

  • Evaluate your team: Do they have the right skill-sets, abilities and systems in place to meet their targets? Do they require further sales training and, if so, do you have the resources to provide it?

  • Conduct market research: You also need to have a solid understanding of the market, your target audience, demand for your product or service and the competition.

Once you’ve acknowledged your biggest potential obstacles, both internal and external, you can more easily establish a strategy to tackle them to put yourself and your team in a position of control.

Develop support and structure

Setting and monitoring sales goals for your team isn’t enough to achieve results. Here is where assigning yourself goals as a sales manager really comes into play.

Focus your goals around the actions you can take to empower your sales team to smash their targets.

Getting the right system in place to facilitate simple pipeline management and successful selling should be your top priority.

Sales reps that are bogged down with admin are not spending time where it matters most. Automation is the key to ensuring your sales department is focused on selling activities. Having the right CRM in place is crucial for sales managers and reps to track performance and measure progress. Effective sales reporting gives you the insights and data you need to refine processes and boost productivity.

You also can’t ignore the value of having face time with your sales team (either in person or via a video conferencing platform if you manage a remote sales team). While it’s important to manage your team and focus on targets, they should also value you as a mentor and sales coach.

Take the time to make sure your team understands their goals and how they can achieve them.

  • Do they feel confident with the goals you have set?

  • Do they foresee any challenges?

  • Where do they need your support?

Regular one-to-one and team meetings make it easier for you to evaluate performance, discuss challenges, share learnings and celebrate achievements.

Prioritize goals

We have already discussed how activity-based goals allow your team to win back control, but now you need to help them to prioritize these goals.

Determine the goals which generate the highest value or make the most impact and encourage your reps to focus their energy accordingly. This should include tasks that matter most to their professional goals and the company’s bottom line.

Reward your team for great performance

Performance-driven bonuses and incentives are key to get the best results from your team.

It’s a no-brainer: Incentivize sales targets for your team.

However, don’t rely solely on monetary rewards as a form of positive reinforcement.

You should also think about ways to acknowledge smaller activity-based goals and milestones like upsells and customer retention wins. This will encourage your team to sign off on the right customers and focus their attention on the customer lifecycle – and boost morale in the process.

Celebrating quick closes that don’t translate into long term customers isn’t healthy for your team, or your business.

While setting realistic targets is important for team morale, Pepper points to the use of stretch goals as an important tactic to achieve success.

“Set a stretch goal above your target, think big and be ambitious.”

Sales managers should establish stretch goals for themselves and their team. That said, if every goal you set is a stretch goal, you’re setting yourself and your team up for failure. There’s nothing wrong with encouraging your team to exceed expectations and strive for more, but make sure you incentivize their efforts and set more realistic goals in tandem.

How sales reps can avoid and manage stress

Salespeople are no strangers to stress. Sales is a high-pressure, performance-oriented and results-driven profession. There is constant uncertainty, frequent rejection and significant pressure to meet sales quotas.

Many salespeople rely on commission to pay bills.

Often your financial well-being and the company’s success is completely dependent upon your performance. The pressure to convert quickly and hit your sales targets is strong.

Sales managers have a responsibility to help their sales teams manage this pressure. This is critical, not only for the health and well-being of your team, but for your own productivity and the future success of your company.

Finding the right balance

A little stress isn’t a bad thing. This emotion can motivate us to push ourselves and drive momentum to achieve sales goals.

However, what happens when this stress starts to escalate out of control?

As sales managers, it’s important to apply some pressure to promote healthy motivation, but you need to do this without compromising the health of your team.

Stress is dangerous. It can have extremely harmful effects on your employees’ mental, physical and emotional health. Stress-related conditions can have life-changing consequences.

That’s why stress is definitely not something to be ignored.

Understand your stress triggers

Before diving into stress management in sales, let’s look at some of the root causes. Prevention is always better than cure.

Below are just some of many stress-triggering factors that frequently seep into the daily life of a salesperson:

  • Financial worry

  • Struggling to meet quotas

  • Rejection

  • A cluttered pipeline

  • Lack of direction/poor management

  • Unattainable targets

  • Lack of resource

  • Toxic work environment

  • Failing to meet expectations

It’s important to evaluate your stress triggers in order to manage them effectively.

Everyone experiences stress, but being self-aware enough to understand how you experience and cope with pressure is the first step towards overcoming the problem.

Common psychological barriers to selling

What can sales managers do to alleviate some of the pressures that come with working in sales? Let’s categorize the common stress triggers into three main psychological barriers to help you manage and combat it:

  1. Lack of control

  2. Fear of failure

  3. Loss of focus

All of these obstacles have something in common:They are focused on the end goal, outcome and results.

The first step to breaking down these barriers involves a shift in mindset, turning your focus from the outcome to the process.

Sales managers need to consider how they can set sales goals for their team to emphasize the short-term activities required to achieve the desired result (e.g. increase average customer lifetime value), not just the annual and monthly sales goals.

An activity-based approach is an effective way to set sales goals for your team to help achieve business results.

Let’s look at each of the psychological barriers in detail to see how this approach works.

1. Lack of control

One of the few certainties in sales is constant uncertainty.

The results you are aiming for are entirely out of your control. You can never guarantee someone will buy your product or solution. This is a difficult and vulnerable place to be day after day. If this stress is not managed appropriately, it will undoubtedly impact your mental health.

By shifting your approach from results-based selling to activity-based selling you are helping your team to win back control of their actions and their schedules.

A structured sales process and a clear sales pipeline allow you to break down goals into smaller, achievable tasks.

How to win back control

Take a look at your sales team’s past performance, including average conversion rates, and work back from your annual sales goals. This will give you visibility into the number of activities required to meet sales targets. Based on this analysis, you can set weekly or monthly goals for your team, which are much more consumable and controllable.

Don’t forget to discuss these goals with your team to make sure they are comfortable and feel confident enough to achieve them.

Having the right tools in place helps you stay on track and monitor progress. A good pipeline management system will visualize this process for you, making it easier to keep track of activities, KPIs and sales metrics.

Working towards a goal without a plan of action breeds anxiety and stress.

The sense of achievement your salespeople will get from completing these activities will help you replace anxiety with confidence, and stress with fulfillment.

2. Fear of failure

Even the best salespeople fail.

Our Global Sales Performance Review showed that even high performing organizations close less than 50% of prospects.

Failure in sales is plentiful and presents itself in many forms: failing to close a prospect, failing to meet a quota, failing to retain a customer. Fear of failure can be crippling and actually prevent salespeople from taking action.

Another element that feeds into this obstacle is fear of rejection. No one likes rejection. We all like to be accepted and we love hearing “Yes”.

We are programmed to actively avoid rejection. Rejection is not just an inevitable part of a salesperson’s life, it’s a frequent occurrence. Many salespeople take rejection personally and this is where things can become really problematic. Self-worth becomes associated with sales success.

Fighting the fear

Let’s turn this around. Activity-based selling allows you to redefine the meaning of failure by projecting it onto the actions instead of the results.

In this way, losing a prospect is not considered failing, but not making the call that could have closed the opportunity can be. Failure only exists when someone chooses not to take action.

Salespeople are constantly dealing with the emotional roller-coaster of success, rejection and the occasional failure. Sales managers need to help their teams effectively cope with setbacks without dwelling on them. One way to do this is to highlight losing as an opportunity to learn.

In the end, hearing ‘No’ is certainly disappointing, but it also brings clarity to your process and your pipeline. Help your team to accept it, learn from it and move forward

3. Loss of focus

There can be a lot of moving pieces in a salesperson’s pipeline so it’s easy to get drowned in data and tasks.

Complicated sales processes and cluttered pipelines can leave sales reps paralyzed. An overwhelming amount of information will result in procrastination, simply because your team members don’t know where to focus their attention.

This means you need to streamline your sales processes and prioritize tasks so salespeople can focus on what matters most.

Be more selective

Greg McKeown, author of ‘Essentialism: The Disciplined Pursuit’, explains:

Essentialism is not about getting more things done; it’s about getting the right things done...it’s about making the wisest possible investment of your time and energy to operate at your highest point of contribution.

McKeown emphasizes just how much focusing on the most important tasks matters, and how it will eventually help you regain control of your choices and feel empowered. It’s important for sales managers to teach this skill to their team and say ‘no’ when they have surpassed their threshold of productivity.

A successful activity-based plan will help you avoid unnecessary complexity and focus attention on the actions that matter most.

Mapping out your customer sales journey will also help you prioritize opportunities so your team can determine where they can bring the most value.

Another way to get some extra clarity is by using lead tracking software. These tools give you a clear view of your pipeline, helping you focus on the right deals and activities. It also helps your team evaluate the opportunities which generate the highest value or make the most impact.

Think like an engineer

Overcoming psychological barriers often requires rewiring your mindset and how you think about problems.

Engineers apply logical and systematic thinking to how they approach obstacles and issues.

This approach involves a structured, problem-solving process to find solutions, and asking questions to best understand the desired outcome.

Asking the right questions leads to fewer assumptions, and fewer assumptions lead to better results.

While sales is all about building relationships, it’s important to develop structured processes. Start thinking like an engineer by applying a systematic approach to how you manage opportunities. If that doesn’t work, try to identify patterns that tell you why and then search for a better solution.

Taking control of your actions and viewing losing as an obstacle instead of failure helps you to better manage stress and operate more effectively.

Develop healthy habits

Individual sales reps also need to take responsibility for monitoring their own workload and maintaining their health.

Creating a culture that values health is the best way to support this. As a sales manager, you need to lead by example. Proactively develop a plan for managing workplace stress.

Here are some healthy habits you should encourage your team to embrace:

  • Work-life balance. You need to take breaks and switch off. If you maintain the energy and focus required to continue smashing your targets, then you must be strict with your downtime.

  • Eat well and work out. This may sound basic, but the life of a salesperson often means long hours on the road. It’s too easy to opt for fast food and make excuses not to work out. Make sure you are fueling your body with the right food and moving about to get those endorphins flowing. Stress is closely linked with depression and exercise is a proven method to combat this.

  • Breathe. Sure, we’ve all heard this one before, but how many of us actually do something about it? Breathing is something we can regulate and control, but often choose not to. Mindful breathing is one of the fastest ways to achieve a relaxed and clear state of mind. Here are some tried and tested breathing exercises to get you started.

  • Look out for your people. A good manager knows when to encourage a rep to step away. If you notice one of your team is doing all the right things but still struggling, encourage them to step away from their phone or desk and go for a walk to get out of the office. Help them blow off some steam. They might need some outside influence because they’ve become too involved to notice they need a break.

Awareness is the foundation to managing stress

Everyone experiences stress, and it’s an inevitable part of work and life in general. Understanding how you deal with stress is key to how you manage it. This self-awareness will help you to deal with stress in a positive and resourceful way.

Andy Puddicombe, founder of Headspace, writes, “It’s about training in awareness and understanding how and why you think and feel the way you do, and getting a healthy perspective in the process.”

There are four key takeaways you can turn into practical action to help you start managing your stress effectively.

  1. Focus on the process, not on the results: Remember that failure is not the result, it’s choosing not to take action.

  2. Learn from losing: When your prospect says “No”, what can you learn from it? Once you have established that, don’t dwell on the situation and move on.

  3. Embrace essentialism: Struggling to focus? Ask yourself what is the most essential task to achieve your goal today and do only that.

  4. Be kind to your body and your mind: Enjoy downtime, eat well, break a sweat and keep breathing.

You can use these four strategies straight away to start developing healthy habits. Go one step further with your proactive stress management and save our stress-busting tips and reminders on file to revert back to whenever you or your team are crumbling under the pressure of the sales world.

Remember, focus on the process, not the outcome. That will help you set a healthy example for the rest of your sales team to follow.

Final thoughts

When figuring out how to set sales goals, remember to start with SMART goals emphasize measurable activities over results. Without clear goals to work towards, your team is likely to lose enthusiasm and momentum. This will have a massive impact on performance and revenue.

Whether you are a startup, small business, or a sales department in a large enterprise, you can apply this formula to your strategy and employ an action-oriented method.

That’s how you can set smarter goals that you and your team can consistently achieve.

Setting sales goals that are both challenging and attainable will motivate your team to strive for greatness, and in turn, drive long-term success for your business.

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