If you’re a sales professional, you’re already aware of the importance of SMART sales goals. Setting the right sales goals is imperative to assess your performance. In this article, we’ll pinpoint some in-depth discussion on setting SMART sales goals along with a set of valuable examples.
So, let’s dive in.
Simply put, sales goals are a set of objectives that you set for your sales team. Sales professionals set these sales goals to align with an organization’s business objectives and some useful KPIs. Here’s an example of a typical sales goal:
💡 To reduce the Customer Acquisition Cost (CAC) by 10% while the lead conversion rate stays fixed at 20%.
Ensure that the sales goals you’re setting are aligned with your company’s long-term vision. Once you finalize these goals, it is time to communicate them to your sales team.
Goal setting does matter for your sales team. Here’s why:
● If you set the goals at the beginning of a period and set a completion timeframe, that will make the sales reps accountable.
● Goals can drive motivation for your sales team to perform better.
● Sales goals can increase the productivity of your sales reps and result in higher sales.
● Last but not the least, sales goals can help you measure the performance of your sales team in an unbiased manner.
There are two types of smart sales goals that you can set for your sales team. Find out more below:
Activity-based sales goals are helpful for improving any particular tactic in your sales team.
They can drive your sales team to do better. When you set specific action-based goals for the sales reps, they know exactly what they need to accomplish. Hence, it becomes easier for them to work toward fulfilling those goals.
Here is an example of an activity-based goal:
Make 5 cold calls a week to 5 new prospects
When you set this goal for your sales reps, you’re not pressurizing them to convert all these prospects within a week. You’re just asking them to do this activity. If they end up converting some prospects, that would be good. There are good chances of driving effective results from activity-based goals.
These types of sales goals are results-driven. Here, you’ll need to allocate certain metrics for your sales reps and usually set a specific number or target that they need to achieve to fulfill these sales goals. An example of a result-oriented sales goal is as follows:
💡 Maintain a monthly lead conversion goal of 20%.
Here, you’re just telling your prospects what they need to achieve each month. You’re not really telling them how. Now, this could be stressful for some sales reps, but others actually enjoy result-oriented goals as they’re motivated by competition.
The sales goals you set for your sales team have to be SMART. By SMART we mean Specific, Measurable, Attainable, Realistic, and Timely. Let’s get into more detail:
Sales teams often make the mistake of setting vague and generic goals that are not specific.
For example, suppose a football match is going on and you’re the coach. What is a specific goal you could set for your team? Score more goals or Score 2 goals?
The second one sounds clearer, doesn’t it? The second goal has a concrete number and it will help the players in your team understand your expectations.
Similarly, you can ask them to generate 5 leads every week when it comes to your sales team. Don’t set a vague goal like generating as many leads as possible. That will only create confusion for the reps.
When you’re setting a smart sales goal, you’re planning to evaluate whether or not you can fulfill that goal. So, your goals have to be measurable so that you can evaluate them later. That means you need a quantitative goal.
The above example of a football match holds good here. Think of a goal like this - Score 2 goals in one hour. When you’re setting this goal for your football team, you are creating a chance for your team to measure their performance after one hour. You can measure whether or not the team has successfully scored 2 goals within one hour.
The goal you’re setting for your sales reps has to be attainable. For example, you can tell your football team to score 4 goals in 90 minutes. That’s attainable. You can ask them to score 7 goals in 90 minutes, that’s difficult but still attainable. But is it possible to score more than 10 goals within 90 minutes? Usually, not attainable.
So, if you really want your sales team to achieve these goals, make them attainable.
Similar to attainable, make sure that your sales goals are realistic. You can’t just overwhelm your sales reps with tons of impractical sales goals that are not doable for a human being. Realize that growth takes time and it won’t happen just like that. Stay practical and set rational goals.
Many times, we fail to differentiate between realistic and unrealistic goals. For example, you can ask the same football team to score 15 goals in 90 minutes. That’s theoretically feasible if you consider that the team will take 6 minutes to score each goal. But that doesn’t mean it’s practically possible. What about the opponent? If the opponent is a strong competitor, scoring ⅔ goals can be a challenge.
If you want to raise the bar, instead of setting an unrealistic goal, set one attainable and realistic goal and then set another optional goal, known as a “stretch goal” or a “reach goal.” The stretch or reach the goal is one that is not unattainable or unrealistic but requires them to push themselves a bit further and overcome their current limitations to achieve. This is not a compulsory goal, but a good-to-have, that will encourage them to try harder without the pressure of failing.
Overall, the key is to, set sales goals that are logical and based on the skills and potential of your sales team.
Finally, for each sales goal you set, there has to be a time frame associated with it, within which to fulfill the goal. For example, if you ask your football team to score 5 goals and skip the time part, will that sound feasible? They don’t have a lifetime to score those 5 goals, so you’ll need to mention 5 goals within 90 minutes.
Setting a deadline for each goal is essential to keep everyone on track and create a sense of urgency to achieve the goal.
Here are a few SMART sales goals that you can include in your SMART sales plan:
Goal 1: Increase revenue by X%
Goal 2: Reduce churn rate by X%
Goal 3: Increase win rates
Goal 4: Reduce the length of sales cycles
Goal 5: Increase Customer Lifetime Value (CLV)
Goal 6: Reduce attrition
Goal 7: Target the number of cold calls made, emails sent and demos booked
Why does it matter?
The first SMART sales goal that you can set is increasing your sales revenue. It is one of the most common sales goals examples. By revenue, we mean the sales revenue that your sales team can earn by selling various products and services. This goal matters for the overall business growth of your organization. Also, this sales goal is pretty easy to explain and grasp.
Here is an example of this sales goal:
Increase sales revenue for next quarter by 10%.
What strategy should you adopt?
● Set well-defined and achievable SMART sales goals
● Try to build a stronger communication network with prospects and customers
● Focus more on upselling and cross-selling
● Try to evolve your existing sales processes constantly
● Educate and train your sales reps
Know how Conversation Intelligence can help increase the sales team's revenue.
Why does it matter?
The churn rate is the number of customers who leave your organization in a stipulated time frame, which detects how efficiently you’re retaining your customers.
Churn rate is a critical factor for every organization. Did you know that organizations lose $1.6 trillion per year due to customer churn? Hence, it would help if you focused on this particular sales goal to ensure that you’re retaining your existing customers. Remember that retaining customers is an important revenue driver for your organization.
What strategy should you adopt?
● Learn the reasons for your churn through thorough customer engagement
● Find out the most valuable customers and focus on their requirements
● Try to target the appropriate audience groups
● Keep offering discounts, loyalty bonuses, etc. to your customers
Try Salesken’s Objection Break-Up feature to get more visibility into your top customers’ expectations and requirements, so that you can address their concerns on a regular basis.
Why does it matter?
One of the mandatory SMART sales goals can be increasing your win rates. The purpose of estimating sales win rate is to understand which sales reps are more likely to convert prospects into customers. You can calculate sales win rate with the following formula:
💡 Sales win rate = [ Final stage prospects who got converted into customers / Total numbers of sales deals in the pipeline]
The sales win rate helps you determine how fast you’re converting more prospects and who your top-performing sales reps are.
What strategy should you adopt?
● Use a sales win rate calculator to stay updated about the numbers of prospects closed
● Set your win/loss criteria on the basis of price, competition, timing, and any other relevant factor
● Don’t rely on assumptions;, use a sales intelligence tool to opt for a data-driven approach
Salesken can help you find the most valuable prospects having high intent to purchase your products. Hence, you can put more effort into converting these prospects and fulfilling this SMART sales goal.
Why does it matter?
The sales cycle should be an integral part of your SMART sales plan. It helps you estimate the time your sales team takes to convert a lead into a customer. The shorter the sales cycle, the higher are the chances of increasing your sales revenue.
A small sales tip here - For some business sectors, a longer sales cycle is standard. In those cases, it is wiser to focus on optimizing your sales cycle instead of shortening it.
What strategy should you adopt?
● Focus on automation and remove any repetitive tasks from your current sales cycle
● Focus on training your sales reps with the latest tools and tactics
● Discover your high-performing sales channels and stick to them
● Stay clear about pricing your services from the very first stage
Use Salesken’s Good Call Engine to remove assumptions from your sales pitches, find words that can create maximum influence on your prospects, and create a buyer profile that perfectly matches your offerings.
Why does it matter?
Customer lifetime value helps you understand the net profit you can make from a customer over time.
Here’s a quick example.
Suppose, you are selling subscriptions for an OTT platform. You convert a prospect who subscribes for your basic plan that’s worth $10. After a year, this prospect upgrades to the pro plan that’s worth $15. So, if the prospect stays for another 2 years with your company, their total CLV will be $300.
Hence, if you adopt the proper SMART sales strategies, you can increase your CLV over time. This can also mean higher sales revenue and lower churn.
What strategy should you adopt?
● Use a conversation intelligence tool to build a data-driven overview of your customers’ needs, expectations likes, and dislikes
● Automate customer onboarding process to enhance overall productivity
● Focus on identifying and improving the talk patterns of your sales reps to increase the chances of upselling and cross-selling opportunities
● Collect actionable feedback from customers to improve your offerings
Why does it matter?
It should be a priority of any sales team to reduce their overall sales attrition rate as much as possible. Losing an expert sales rep can cause irreparable damages for your team with long-term impacts on your overall sales revenue. A common reason behind high attrition is that sales reps don’t get targeted feedback from their managers and fail to identify growth opportunities. Sales managers should make it a point to help the sales reps with proper coaching to evolve and learn new sales tactics.
● Invest in coaching your sales reps
● Arrange 1:1 discussion sessions between sales managers and sales reps to provide them with actionable feedback
● Conduct exit interviews to find out what caused the attrition and find out ways to fix them
Salesken is a top-notch sales enablement software that can coach your reps, help them understand the dos and don'ts of their sales pitches, train them on managing sales conversations, handling objections, and so on. You can use this software to find out your top-performing reps and build a more efficient SMART sales strategy.
Some of the major activities that are imperative for any sales team are the number of cold calls made, cold emails sent and the overall demo sessions booked in a particular time period. Sales managers should keep track of all these activities. They need to set activity-based SMART sales goals in such a way that reps focus on these activities on a continuous basis.
Salesken’s Voice of Customer can help you gain more insights into your customers’ personal profiles and help you find out their needs and concerns, so you can align your cold emailing and cold calling strategies with customers’ pain points and improve conversations.
Before wrapping up, we just want to give a small suggestion. Don’t start with big goals as it can get overwhelming. Instead, break down your SMART smart sales goals into a number of small goals and allocate relevant time frames to accomplish them. That way, the goals will remain achievable and you can track your progress. Keep practicing this habit to stay motivated and accountable.
Any questions? Leave a comment below.
Salesken is the go-to software to help you analyze every sales call to highlight customers’ intent, objections, needs, and expectations and easily guide your reps in the right direction to convert more leads. So what are you waiting for? Book your demo now!
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