What is a sales target? A sales target is a goal set for a salesperson or sales department measured in revenue or units sold for a specific time. Here is the complete definition of a sales target as found on Business Dictionary.com. Setting up sales targets help keep you and your sales team focused on achieving your goals. Do you know that you can use many different sales target types to better forecast your revenues in real-time? Find out below.
Understanding Sales Target Definition
Nowadays, many sales organizations are using powerful sales pipeline management methodology in order to track their sales process. A sales pipeline is as a visual representation of your sales process where all your potential customers are displayed and neatly arranged according to their phase in your sales cycle.
Each sales opportunity or sales deal has its own unit value that is calculated into the target. Therefore the simple target definition could look like this:
A sales target is a sales tool that enables you to easily measure and estimate your opportunity contribution to your sales goal.
Most of the companies are tracking only one target type i.e. the real target or the final revenue. However, pipeline management methodology allows you to monitor your sales effort in real-time and gives you an interactive forecast tool. Here are 5 essential sales targets that will help you to better forecast and analysis your sales progress.
5 Essential Sales Target Types For Your Sales Success
The sales target examples below calculate and forecast your sales revenues based on the opportunity value and the following additional set of conditions:
- Sales stage probability of closure – the likelihood of winning the opportunity for that particular sales step.
- Opportunity ranking – the personal likelihood of winning the opportunity.
- Opportunity pipeline position – the current position of the opportunity in the sales pipeline.
- Opportunity status – the status of the sales opportunity i.e. either it is an open opportunity or won opportunity.
Here are the 5 target examples that you can use to forecast your revenues:
#1: Unweighted Sales Target
This is the most liberal target. The unweighted target is the sum of all opportunity values in the pipeline, but is an inaccurate view of the actual business coming in. The view does not take into consideration any potential deals that are lost during the process. This view would mean that you have a 100% closing rate for all of your opportunities.
The powerful concept behind the sales pipeline methodology is that you can simply set the probability of closure for each sales step in your sales process. It’s measured in percentage and it enables you to “weigh your pipeline” using the weighted target.
#2: Weighted Sales Target
The dynamic target calculating the weighted value i.e. the sum of all opportunities values according to the position in sales pipeline, it’s sales step probability of closure and the target date period definition. Here is another target definition by David Brock: “The weighted target is equal to the sum of the total opportunity values in each sales step multiplied by the probability of closure for that step”.
It’s the most objective target that takes into consideration the opportunities you lost during the process.
#3: Ranked Sales Target
The ranked target is the sum of all opportunities values according to the subjective ranking of the opportunity itself by sales rep and to the target date period definition. The ranked target is the estimate of each individual sales rep as to their chances of winning a specific opportunity. The weighted percentages for each sales step are not included in this target view.
This is a personal-based target and it’s related to the individual sales rep preferences and experiences with the customer. Who knows the most about the customer? Yes, it’s a sales rep.
#4: Balanced Sales Target
This is the most conservative target type. A target calculating balanced value i.e the sum of all opportunities values according to the position in sales pipeline, to the subjective ranking of the opportunity itself and the target date period definition.
It does take into the consideration the lost opportunities and your sales reps individual preference toward the deals. This is the target you should be focusing on.
#5: Real Target or Revenue
Or achieved target i.e. target calculating the real value i.e. the sum of all won opportunity values within a given target range. This is actually the revenue your sales team achieved over specific period of time.
By tracking the details of every sales opportunity you can stay on top of your sales progress and ensure your sales team hits their sales targets.
Here you can see how you can track dynamic sales target within Pipeliner CRM. Try it now.
How to Efficiently Track Sales Targets
ll these sales targets let you effectively track your sales pipeline opportunities through many different conditions. However, at the beginning you need set your sales goal, right! One thing is to understand the “weight” of your pipeline and second one is to achieve your goal target.
A sales goal is a special freely modifiable time-based value towards which sales force is headed.
Once, you setup your goal and start filling your sales pipeline with potential customers, you can easily track your goals at all times. Whether you track your sales forecast or quota, we’ve made it easy for you to track any type of custom goal, all in real-time and always in front of you.
I hope you can now quickly find the answer to the question “what is a sales target“? For a more detailed look into sales target tracking and pipeline management CRM software take a look at Pipeliner CRM.
Throughout my professional life I have seen the pains that sales professionals go through when it comes to tools that “should” help and assist them in their sales process. That is why we have developed Pipeliner CRM.
Goal Setting Definition and Examples
Strategies for Successful Goal Setting
Goal setting is the process of deciding what you want to accomplish and devising a plan to achieve the result you desire. For entrepreneurs, goal setting is an important part of business planning.
This goal setting definition emphasizes that goal setting is a three part process. For effective goal setting, you need to do more than just decide what you want to do; you also have to work at accomplishing whatever goal you have set for yourself - which means you have to create a plan so your work gets you where you want to go.
For many people, it's the third part of the goal setting definition that's problematic. They know what they want to do and they're perfectly willing to work on it but they have trouble creating a plan to get there.
The undirected effort might help you accomplish what you want to do if by some fluke you do the right thing at the right time. Usually, it doesn't. And then, because you're not getting any results, you quit working at whatever it is and give up on whatever goal you've set.
So for successful goal setting, the first thing you have to do is close the gap between the end result you want and where you are now with a plan.
What's the Difference Between a Personal Goal and a Business Goal?
Business goals and personal goals have different purposes (business goals aim to improve your business rather than some aspect of your personal life) but there's no difference in the goal setting process.
The same goal setting formula and strategies that works for business goals will also work for personal goals - with the one difference that applying the strategies that are often used to set business goals will give you greater success with achieving personal goals than is often the case.
Business goals are typically set on an annual basis and should be aligned with your long term goals.
For example, if your five-year plan is to increase sales by 100% then at the beginning of each year you might set a goal to increase your sales by 20% for the current year. Your goals should be worked into your business plan and (in this case) your sales forecasts.
Throughout the year, you might have weekly, monthly, or quarterly sessions where you review your progress towards the annual goal. Writing down the results is essential for staying on track when you're working towards achieving a goal.
At the end of each day, you should review what you have accomplished for the day and think about what you would like to achieve on the following day. Preparing a to-do list for the next day each night is an excellent practice that will help keep you on track.
Whether you prefer to do it at night or in the morning, Daily Planning is a highly recommended way to increase your business success. Regularly reviewing your progress towards achieving your goals and your goals themselves keeps you focused and motivated.
Strategies for Goal Setting Success
The easiest way to set yourself up for goal setting success is to use a formula for setting goals that incorporates a strategy for accomplishing the goal.
(See Goal Setting: The First Step to Achievement for details.)
Another way of ensuring that you have a good shot at actually accomplishing the goals you set is to make sure that the goals you set follow the SMART acronym and are:
- Specific - For example, I want to increase my business revenue by 30% this year.
- Measurable - "Increasing sales" or "reducing debt" are measurable goals, "working harder" or "increasing my personal satisfaction" are vague and difficult to measure. Putting your goals in writing helps to keep you focused and see how much progress you've made towards your goals at the end of the defined time period.
- Attainable - A goal should be challenging but attainable. If your business is a lumber yard, overtaking Home Depot in sales is not a reasonable goal!
- Relevant - Goals should be aligned with your long term plans. If your long term plan is for your business to attain $200,000 a year in sales your short-term goals should directly relate to achieving this.
- Time-Bound - Without a specific time frame for your goals they can't be properly measured. A goal should contain a time limit (e.g. "by the end of the year I want to increase sales by 20%").
I hate to wreck a good acronym, but I think it's important to add an 'E' for engaging when goal setting. If a goal isn't engaging to a person, they're not going to have enough internal motivation to work to accomplish it.
Examples: Once Craig learned how to set specific goals, he found his goal setting efforts a lot more successful as he actually accomplished what he set out to do.
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