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. In this article, we guide you through setting smart sales goals for your team and avoiding stress when trying to achieve them.
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 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 goals of your company. In an effort to hit numbers, 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 goals.
Use the SMART methodology to guide your strategy.
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.
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 managers 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.
Let data guide your goals. Look at historic growth rates and past performance of the best 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.
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.
In sales you can't control the results, but you can control the actions and the inputs of that process.
Setting result-oriented sales goals can be damaging for your team and your bottom line.
Rather than telling your rep they need to close 50 deals this year to meet quota, tell them they have a goal of 10 calls this week. There is nothing more daunting or frustrating than feeling out of control, so empower your team to take charge of their actions.
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, experience will vary. Keep this in mind when you are working with your team members to set realistic goals to meet their quota.
Don’t let revenue monopolize your focus when you set goals for your salespeople.
Think about setting goals that will inspire your team to sell better.
Speak to your team 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.
Your team want to know that you value them enough to invest in them. Encouraging your team to grow professionally will result in stronger performance and more targets reached in the long run.
Firstly, take time to build your strategy in advance.
Plan for failure... it happens
Meticulous planning doesn’t just involve looking at what you have to achieve your goal, it also examines the gaps and the obstacles.
No sales manager sets out to fail, but roadblocks are an inevitable part of business.
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 follows this quick process.
Develop support and structure
Setting and monitoring these 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. 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 insight 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. 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 understand their goals and how they can achieve them.
Regular one-to-one and team meetings make it easier for you to evaluate performance, discuss challenges, share learnings and celebrate achievements.
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 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.
But don’t stop there.
You should also think about ways to acknowledge smaller activity-based goals and milestones like upsells and retention. This will encourage your team to sign off on the right customers and focus their attention on the customer lifecycle.
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. There’s nothing wrong with encouraging your team to exceed expectations and strive for more, but make sure you incentivize their efforts.
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.
But 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 the mental, physical, and emotional health of your employees. 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:
And the list goes on...
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.
Psychological barriers to selling
So 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 this stress:
All these obstacles have something in common.
They are focused on the end goal. On the outcome. On 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 activities required to achieve the desired result, not just the result alone.
An activity-based approach is an effective way to set effective 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 the past performance of your sales team, including average conversion rates, and work back from your annual sales target. 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 and work towards goals.
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 on!
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.
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. And if it doesn’t work, try to identify patterns that tell you why and then search for a better solution.
By taking control of your actions and viewing losing as an obstacle instead of failure, you can manage stress and operate more effectively.
Develop healthy habits
Your team also needs 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:
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 4 key takeaways you can turn into practical action to help you start managing your stress effectively.
You can use these 4 strategies straight away to start developing those 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.
And 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.
“Sales professionals are measured on results, so consistent performance is key to success. It’s also important to review the inputs and strategy a sales person has as results are sometimes down to other factors. If you continue to develop your craft, plan, and execute effectively, the results will follow.”
Without clear goals to work towards, your team are likely to lose enthusiasm and momentum. This will have a massive impact on performance and revenue.
By setting a clear objective, you provide something for you and your sales team to strive towards and benchmark performance against. This insight helps you determine what’s working and what’s not.
Successful sales managers are fluid with their strategy and use data to inform their sales goals:
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 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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