Seven Steps to Sales Transformation
Pricing Optimization in a B2B World: Value-Based Pricing Comes of Age for Sales

Setting Sales Goals and Targets: Step 1 to Creating a Winning Sales Plan

Dan-240x300Today's blog post is by Dan Hudson, President and Co-Founder of 3FORWARD. He has a B2B sales and sales leadership background of more than 30 years.

  

 

Sales planning for 2012 is well under way, and most sales teams are facing quota increases for the coming year. The fact is, every sales leader will have to do more in 2012, often with limited additional resources. Even best-of-class sales programs (with average win rates of greater than 30 percent) need to continue improving their year-over-year performance. It's one of those indisputable laws, like paying taxes and getting older.

This reality is what makes formal sales planning so important. It's main the difference between making it happen and hoping it happens. The fundamental goal of the sales plan is to put on paper specifically how the sales team will make next year's revenue target. We recommend your sales plan cover (at least) the following areas to make sure the fundamentals are addressed:

  1. setting goals and targets,
  2. building the revenue model,
  3. filling the sales funnel,
  4. building a dynamic sales process,
  5. executing and measuring.

By focusing on these five core areas, you can build a sales plan that is reasonable, measurable and, most important, achievable. Each section is vital, but let's take a closer look at section one, since it sets the strategic direction for the tactical elements that come later in the plan.

Setting Sales Goals and Targets: Section 1 of the Sales Plan

Whereas the B2B sales plan establishes the playbook for a successful sales year, the initial section of the sales plan, "Goals and Targets," is the foundation of the written plan itself. Following are the three main topics for this section, with examples of where to focus.

1.  Making Goals and Targets Specific and Measurable

Too often, sales goals and targets have a case of the "warm and fuzzies" – a feel-good tone that is vague and undefined. To be clear and actionable, goals and targets must be specific (numbers and dates are best) so that you can measure your progress throughout the year. 

Example of "fuzzy and feel good" targets:
"Establish new relationships for our outsourcing practice."

Example of specific and measurable targets:
"Establish two new relationships per quarter in the US Financial and Accounting Outsourcing practice. The targeted annual contract value of each new relationship is $2 million."

When setting your goals and targets, try to strike the sweet spot between "go big or go home" and the reality of your market situation. Every company faces its unique challenges, but if you are prepared, then it's easier to overcome them.

2. Prioritizing Challenges and Creating Defensive Strategies

Consider your last couple of sales years, and list those challenges that kept you from achieving your sales targets. Think in terms of the key areas of the selling process:

  • lead management
  • account management
  • opportunity management
  • territory/area management
  • pipeline process
  • metrics and reporting
  • team skills development
  • rep and manager recruiting
  • compensation

Prioritize your list of challenges and identify your strategy to minimizing these sales barriers. Use a template, such as the following, to identify, rank, and address your challenges.

Preparing for Sales Plan Risks and Challenges

Challenge 

Not enough qualified leads from marketing's lead generation program.

Impact 

The sales pipeline and ability to make the annual revenue target.

Severity 

High

Recommendation

Meet with marketing to jointly define what constitutes a qualified lead. Increase quantity of target accounts by X and identify Y key contacts in each target.

Assigned to

Joe King, Director, Marketing Lead Management

Complete by

March 1, 2012

3.  Define Investments Needed to Achieve Success

You are likely in the same boat as most sales leaders heading into a new year: you're getting a quota increase! In the old days, we might have grumbled a little, played around with territories and headcount, and then told the CEO we needed another seven sales reps to meet the new number.  

More Effective Approaches to Investing in Sales Success

Yes, headcount is still a critical success factor for a sales team; however, benchmarking of best-in-class sales teams demonstrates several process-level improvements that consistently improve win rates and increase a team's ability to hit its numbers. These enhancements allow both the current team to perform better and the improvement of new-hire success rates. Here are some areas to consider:  

  1. Establishing a formalized sales process, including targeted account planning
  2. Sales manager effectiveness training and industry-specific rep training
  3. Lead management process and marketing automation
  4. Sales leaders dashboard and sales knowledge management
  5. Sales intelligence, prospect profiling, and industry monitoring

Additional Resources for Setting Sales Goals and Targets

There you have the outline of "Setting Sales Goals and Targets," the first section in creating your new sales plan. You can clearly see why getting this on paper creates the foundation for everything else in your plan. If you'd like some help getting started, 3FORWARD provides several complimentary templates to help sales leaders develop their 2012 sales plans. 

Give them a try and let us know if you have any questions. Remember, the most important takeaway is to realize that your team WILL have to sell more in 2012 than in 2011. Hope isn't a strategy! Having a plan is the only way it will happen.   

Share your comment
Share this post on Twitter
Email this post to a friend

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

sales training

Thanks for the article. It was motivating and teachable.

If I may, I’d like to elaborate on your point above about missing opportunities during questions/answers.
Effective questioning is the third critical selling skill. There is a direct correlation between the success of a sales presentation and the type of questions that the salesperson uses. On average, failed sales calls include 86% more close-ended questions than open-ended questions.

Salestrainingin The Netherlands.

The comments to this entry are closed.