In today's competitive market, the SMART standards in building sales goals Practicality is an important factor in achieving business success. However, what kind of sales goals should be formulated? How to build? This is a question that many businesses ask. Capturing that mentality, in the article below, Viindoo will help businesses better understand sales goals. Let's find out together!
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1. What is a sales goal?
Sales goals represent the results that business managers hope their sales team will achieve within a certain time through the sales campaign. In order to easily track, manage and control sales results in each stage, sales goals need to be defined in a specific and measurable way.
Sales goals can be divided into short-term and long-term goals. Before each sales campaign, managers need to set long-term goals for the sales team. Then, during the implementation of the campaign, short-term goals will be set for each respective period.
Build sales strategy is an important step in creating a clear roadmap for sales and providing direction for salespeople to take action, resulting in high revenue for the business. Typically, a business's sales goals focus on increasing sales and profits, gathering more customer databases, boosting sales, and improving employee performance. , optimize the sales process,... In addition, this is also the basis for how to calculate KPI for sales and other employees in the company.
Sales goals are divided into the following categories:
- Sales target: A revenue goal is the total value of products and services that need to be sold over a given period of time.
- To define this goal, a manager needs to make a specific plan for a defined period of time, with clear measurable, subdivided, and achievable goals. At the same time, sales goals can also be broken down into sales volume targets for a specific time.
- When building sales revenue targets, businesses must base on many factors such as: Sales results of the previous month, the company's ability, the level of competition in the industry, the change of the market. Internal data is often extracted from the enterprise. Meanwhile, market reports are often obtained from other entities.
- Market development goals: Market development goals focus on expanding the reach of the point of sale in the market and increasing the number of sales channels. Businesses often aim to cover the market by increasing the number of points of sale and increasing sales at each store.
- Customer development goals: Developing customers is an important factor in increasing revenue and developing a sustainable business. This goal includes many factors such as: The number of new customers, the rate of returning old customers, the level of customer satisfaction, etc. In addition to attracting new customers, businesses also need to retain customers. old and make them loyal customers.
- Target market share: Market share is an indicator that measures the ratio of customers consuming a business' products to the total number of potential customers in the target market in a certain period of time. To build this goal, businesses need to base themselves on the company's market share, competitors in the previous period as well as the development and change of the market.
- Revenue target: A revenue target is the amount the business expects to earn after deducting all expenses. Profits can be calculated for an entire product, service, or individual product lines. For convenience in calculations, businesses often use the percentage of profit on sales, profit compared to costs, instead of giving a specific amount. Enterprises can rely on the previous period's revenue to determine the appropriate profit target for the next period.
What is a sales goal?>>>> More Reference: Sales automation
2. How to build accurate and realistic sales goals?
To Set sales goals Accurate and effective, businesses can refer to the following 5 factors:
- Business situation analysis: Each business has its own characteristics, so before setting sales goals, businesses need to consider the life cycle of their product/service portfolio and what factors can affect revenue. Let's ask the question:
- Does your business depend on seasonal factors?
- Does the business have a stable source of revenue?
- Is your business contract-based?
- Is the business highly profitable or has a high profit margin?
- Economic factors assessment: When assessing economic factors, enterprises need to identify issues such as:
- Can what's going on in the business sector and the overall economy affect revenue?
- Does the business operate in volatile markets?
- Is the business operating in a highly competitive industry?
- Consider revenue from each rep: You need to look at each rep's sales record in previous years. Managers then gather information on their sales turnover ratio, which can be a signal of future potential. In addition, careful account scoring and segmentation is important, as these factors can greatly influence your team's sales goals and motivation.
- Gather Feedback: It is important to gather feedback, both before and during sales goal setting. Sales representatives are people who have direct contact with customers. As a result, they can give an opposing opinion or focus on factors that the business has not considered. Sometimes, feedback can provide more valuable information than numbers, for example industries that can be difficult to penetrate or areas where your product value proposition is not working. With a deep understanding of this important area, businesses can change predictive analytics and make sales goals more specific.
- Apply rolling forecasts: Although rolling forecasts have proven to have many advantages, most companies continue to use traditional forecasting based on a predetermined annual or quarterly schedule. available. This approach makes the forecasting process a performance appraisal, rather than a focus on capturing future opportunities and risks – which results in the loss of the ability to create specific goals. . To overcome this drawback, consider implementing rolling forecasting by specifying time periods in each forecast period. No economy, market, or customer organization is static, so a business' sales forecast shouldn't be too rigid.
When Set sales goals, businesses also need to ensure compliance with the following SMART standards:
- Specificity: Businesses need to clearly define their sales goals by giving detailed information, avoiding setting general goals. Businesses can use accurate metrics to determine the goals they want to achieve when selling.
- Measurable: Businesses need to ensure that their sales goals are measurable, regardless of whether they are qualitative or quantitative. In the sales goal of the business, it is necessary to show specific numbers to be able to measure and determine the goals that the business wants to achieve in the sales process.
- Achievable: The sales goal set by the business needs to be feasible and achievable. This means that sales goals should not be too easy but also should not be too difficult to achieve. Businesses need to ensure that they set sales goals within their capabilities based on their will, efforts and existing potential to increase sales performance.
- Realistic: Sales goals must be consistent with reality and the ability to perform. Enterprises need to ensure that the set goals are achievable and consistent with the business situation, strategic direction as well as forecasts of market fluctuations.
- Timely: Businesses set a specific deadline or deadline to accomplish sales goals. The duration can be defined in terms of weeks, months, years, or another specific period depending on the nature of the goal.
SMART standards in building sales goalsHere are the details on how Set sales goals but Viindoo want to provide businesses. In general, setting specific, accurate sales goals is extremely important to the success of a business. Hopefully, through the information shared in the article, businesses will get an overview and insight on how to set sales goals.
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