For small business owners, setting sales target can be a hard work. In fact, many businesses fail to set the sales target. Referring to the previous year’s achievement and add what appears reasonable is not sufficient. The changing variables such as product line, customer requirements, and buying power have also to be considered. Inaccurate sales target will risk the business. Not only influence the cash flow, but also break management’s credibility and less motivated sales person.
Setting sales target enables you to measure your sales team effectiveness. They show your chance to develop, reward your team, and encourage their improvement. Improper target causes negative impacts on your business and reduces your sales team motivation.
Consider the following points to set your sales targets:
- Recognize business situation. Every business is different and it is dynamic. find out what situations affect your business, such as whether it is seasonal, high or low margin business. Use these factors to create detail forecast.
- Economic condition. Evaluate the variables such as market demand, competitor, and the opportunity to gain revenue which may influence your sales.
- Set market segmentation. Review your previous sales performance and gather customers’ opinion to improve sales performance.
- Collect feedback. Collect feedback from your employees, they may share variables that you have missed – such as a very strong competitor or region where your product can not access. These insights will break down the forecast and targets to be more realistic.
- Set productivity goals. First, describe your sales cycle, discuss it with your sales team and other departments to have more insight if your sales cycle. You can share a worksheet to your team and ask them to record their activities. After a certain period, like a week, review your staff’s worksheet, how many prospecting calls make in a week, the number of appointment and quotations. Use this information to evaluate your team’s activity level and determine the precise productivity goals.
Establishing sales targets required the collaboration of science, logic, and personality. Take your time to set your sales goal precisely and their impact on the compensation program.
