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How to Set Smart Goals for your Sales Team?

7 minutes read

The word goal is a simple yet powerful word. It carries many different associations for different people. Some people have realistic goals, some have ambitious goals, some have fictitious ones and some other’s goals are somewhere in between.

Setting sales goals also resonates with one of these aspects. Ideally, businesses should set SMART sales goals which seem ambitious at the same time achievable for their sales teams. These smart goals will induce determination and motivation amongst the sales reps to meet or exceed sales targets.

If you are planning to set SMART sales goals for your team in the upcoming financial year, then read this blog to understand,

  • What are SMART sales goals?
  • And how can you go about setting SMART goals for your sales team?

Defining S.M.A.R.T Goals

When it comes to goal setting, there is a handy acronym that helps businesses in setting realistic yet ambitious milestones. It’s called the S.M.A.R.T. acronym,

S- Specific

M- Measurable

A- Attainable

R- Relevant

T- Time-Bound

These are the most important characteristics for your business goals to have. By adhering to these characteristics you will be able to set quantifiable as well as qualitative goals which can set your business up for success.

Let us now dig into each of these characteristics further and see what makes a goal smart

Be Specific

A smart goal specifically mentions what the rep needs to achieve. A goal like “Increase sales” isn’t a SMART goal because it is far too broad. Instead, a goal like “Increase sales by 50%” is a specific goal. This tells the reps what exactly they should work towards and helps you when it comes to measuring your reps’ performance and business growth.

Avoid being vague when defining your goals. You should make it uber clear about

  • What milestone do you want reps to hit?
  • What that quantifiable or qualitative goal looks like?
  • And, even, how success will be measured?

Set Measurable Goals

A smart goal should also be measurable. This means you should be able to track and quantify its progress and success. Again, “Increase sales” is not measurable, but “Increase sales by 50% MoM (month over month)” is.

If you want to measure your sales team’s progress, you’ll need to quantify your goals. Like you could ask them to drive

  • X-percentage increase in sales
  • Or a Y-amount increase in leads, etc

Make sure they’re attainable

It certainly makes sense to set ambitious sales targets, but you also want your goals to be attainable so your reps don’t get discouraged when they come up short. You should be fairly confident that a rep can achieve the goal if they have a decent work ethic and the right skills for the job.

Make sure your sales goals are rooted in reality. If your reps’ close rates have lingered around 30% the past two months, consider setting a goal of 35% the next month, rather than a lofty 45%.

You should always aim to improve your team, but setting unattainable goals can leave them feeling burnt out and discouraged and can make it harder for you to track your team’s progress. Discuss your goals with your team to confirm that your goals are ambitious yet realistic.

Set goals that are relevant to your business

Set goals that are relevant to your company and fit into the overall, long-term goals of your business. For example, filling the sales funnel with a huge number of leads (who might not even be the right fit for you) might sound like a worthy goal. But will doing so actually drive your business revenue? Or should you instead focus on converting a few customers who are genuinely interested in your product?

You should set SMART goals that not only benefit your department but your entire company. They should fit into the overall “picture” of your business and move the needle in terms of business growth.

Set goals that are time-bound to a certain deadline

Sometimes goals end up being “moving goalposts” if there is no set deadline. The goal keeps getting put off until it inevitably falls off your reps’ radar. By setting time-bound goals, you get more specific about deadlines and timeframes for achieving those goals.

Having no timeframe will cause your reps’ efforts to get reprioritized, making it hard for them to stay on track. Instead of saying “We want to increase business revenue by 40%,” say, “We will increase business revenue by 40% by Q2.”

How to set SMART goals for your sales team?

Here is how you go about setting SMART sales goals for your team at an individual or team level.

1. Set waterfall targets

This is the method where you set targets in an incremental manner. Here is how to do that:

Let’s say your sales reps are shooting 70 emails per week and you want them to send 120. Then don’t just instantly increase their weekly email target to 120. Instead, raise their target to 80 emails next week, 90 the following week, and so on.

This waterfall method helps in keeping the morale of your reps high as falling short of achieving targets increases their worry and suppresses their motivation. This method also leads to a higher quality of work and better sales results.

Your sales team won’t experience fatigue from the increase in work and they will have enough time to ramp up quality.

2. Sequence the Goals

This is another way of saying “prioritize your goals.” Determine which goals bring the highest value when hit, and make sure your reps are meeting those first.

If you’re sequencing goals for a junior sales rep, set goals around where they can improve. For example, if they need to get better at prospecting, make it a goal for them to increase outreach calls by 10% every week.

Sequencing means even if your reps don’t meet every goal, they’ll meet the ones that matter the most to your company’s bottom line or their professional growth.

3. Set Activity Goals

Activity goals help in improving your reps’ productivity. Here is how you can set an activity goal for a sales rep: Let’s say that the target for a rep is to close $4,000 of business this month. Now as a first step, analyze the historical sales performance of that salesperson to figure out the rate at which they do calls, meetings, and close deals.

Say the sales rep has to close an average of four deals per month to hit the quota. If 50% of that rep’s demos convert to deals, then they must demo eight prospects each month. If 30% of their calls lead to demos, they need to call roughly 27 people.

Working backward this way lets you turn a (potentially intimidating) revenue goal into manageable metrics.

4. Set stretch goals

A stretch goal is a goal that exceeds the primary target. Think about the old saying: “Aim for the moon. If you miss, you’ll be among the stars.” But keep in mind that this isn’t right for everyone. If a rep is struggling to meet their quota every month, a stretch goal will only increase their anxiety. But if you have an ambitious, high performer, you can set realistic stretch goals that will challenge and motivate them.

5. Set mentor goals

If a rep is having trouble ramping up or hits a rough patch (it happens to everyone), we suggest you set them up with a mentor who can guide them and bring them up. Having someone to confide in besides their manager can be just what they need to thrive. You can set and incentivize goals here for the mentor & mentee pairs which would motivate them to work together and achieve good results.

6. Create a collective goal

Set team goals and provide an incentive that’s awarded only when everyone in a team meets the goal. For example, you set a goal that all the salespeople in a team must hit

  • X number of calls/meetings/emails
  • X amount of revenue
  • Or X% client retention

Put up a company-paid happy hour in front of your team and watch them work together to help each other succeed.

Want to know how to design a sales plan for your business? Read the below blogs:

Sales Plan Part-1: How to Create a Sales Plan?

Different Types of Sales Plans (Templates + Examples)

Sales Plan Part-3: How to optimize your Sales Planning for Rep Success in 2021

Learn how strategic and tactical planning help in creating a perfect sales plan for your business

Strategic vs Tactical planning in Sales

Want to know how to plan your sales for a new quarter?

Read: How to plan for a new sales quarter?

Published on Mon Jan 10 2022

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