Ask any business owner what his/her sales goal is, and he is bound to answer- “to increase sales and revenues.”
Sales goals are common for every business and help them to measure the success of sales strategy and performance. Today, we are going to explore examples of effective sales goals that you can incorporate into your business.
But first, let’s find out how to develop the perfect sales goals for your organization.
How to Develop Smart Sales Goals
We suggest you develop your sales goals the S.M.A.R.T way-
- Specific: Your goals should be clear and tell what is expected
- Measurable: Set metrics or criteria to measure the success of goals
- Attainable: The goals should be challenging, yet attainable
- Relevant: Makes sense for your business and team
- Time: Goals should have a specific deadline
Specific: A SMART goal would be to increase your cold calling by 20 leads each day. It’s specific and sets a target.
Measurable: You can easily measure the calls each day.
Attainable: Making 20 extra calls in a day is attainable. Setting a goal of 100 calls is unrealistic.
Relevant: It should fit with the mission of your company. In this case, it makes sense if you depend on cold calling.
Time: 20 calls per day sets a deadline to achieve the goal.
Now, we will explore some sales goals examples.
Ideal Sales Goals Examples for Your Business
We are going to start with really simple goals and then switch to advanced ones.
1. Increase the Number of Units Sold
This sales goal is applicable to all businesses that sell physical products or services. You can set a quota for your sales team to achieve within a timeline.
For example, you can set a sales goal of 10 units for your sales reps.
Tip: Assess past sales to develop a realistic target for your team.
2. Earn More Sales Revenue
Sales revenue is the total proceeds earned by a rep selling your products or services. It’s a common goal and easy for reps to understand and convenient for managers to measure.
For example, your goal could be to increase sales revenue by 15% in the next quarter. Or, you can set a target of $15,000 in sales revenue for your reps in a month.
Tip: Make sure the target is actually attainable.
3. Increase in Annual Contract Value
Businesses who depend on subscriptions or rentals can use the annual contract value to set targets and commissions. You can multiply the monthly target of a rep in his annual contract value to get the final value.
So if a rep’s target is $15,000, then annual contract value is $15,000 x 12 = $1,80,000. You can also include one-time sales in the yearly contract value.
Tip: Ideal for measuring recurring and non-recurring revenue in a single number.
4. Lower Customer Acquisition Cost
Customer acquisition cost (CAC) is the total cost you incur to acquire a customer. When your CAC is lower, you can make more profit margin from a sale.
CAC involves all costs like-
- Wages and commissions of reps
- Calling costs
- Marketing and sales expenses
- Tools and software costs
How to calculate CAC: Divide the total cost of acquiring customers by the number of customers acquired.
For example, if you spend $100 to acquire 100 customers in a year, your CAC is $1.
5. Acquire More Qualified Leads
Qualified leads are more likely to convert. So the more qualified leads you get, the more deals you can close. You can set a target for your sales team to generate, say, 50 qualified leads per month with at least 75% on the qualification score.
Tip: You can save the effort and time needed for qualifying leads by using a lead management solution or a CRM. Your leads are automatically scored based on several factors and presented before you to follow up.
6. Reduce Customer Defection Rate
Customer defection rate refers to the number of customers who cancel their subscription or stop making regular purchases. The lower the defection rate, the higher is your customer retention and spend.
You can say, set a target for reducing your customer defection rate by 3% in the next year.
Tip: It’s crucial to find out why your customers are leaving. Doing so helps you address their concern and turn them into paying customers once again.
7. Shorten Sales Cycle
Sales cycle is the time taken to convert a lead into a customer by making the sale. Companies that have shorter sales cycles sell more and earn more revenues.
Let’s say your sales cycle is 6 weeks. You can set a goal to cut it down to 4.5 weeks.
Tip: Longer sales cycles are common in some industries. You should be aware of the optimum period of the sales cycle for your business to create a sales cycle goal.
8. Goals Based on Activities per Month
You can turn the activities of your reps or sales team into targets. We already gave an example of increasing your cold calls, so that’s an example of monthly activity.
Examples of activity-based goals include-
- Number of customer visits
- Number of demos or presentations given
- Number of forms filled up
- Number of leads collected
Tip: Evaluate your sales process and turn the most crucial activities in sales goals.
Final Thoughts: Tie Goals with Objectives
Goals can often be broad. You need to tie objectives with the goal so that it can be attained. For example, your goal may be to increase sales. In order to do so, you can-
- Increase new customers
- Market to existing customers
- Invest in ads
Always tie your goals with objectives so that your reps or teams know what to do to achieve them. You can use a CRM like LeadSquared (15-day free trial) to keep track of crucial sales metrics and determine the success of your strategies and efforts.