Therefore, we can conclude that having defined goals is essential for business growth.
After all, no company grows solidly without having control and a clear vision of goals and results.
But it is also very common to find goals that hinder teams and business development.
Poorly defined goals can lead to turnover, poor engagement and performance, poor pay, and a horrible climate of constant defeat on your team.
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Therefore, our objective with this content is to help you with the definition of your sales goals, in a way that they are allied to growth.
Today, you will learn 4 simple steps to set your sales goals:
1st step: Main objective
2nd step: Choose the variables to act
3rd step: Indicators and formulas
4th step: Transfer of information and monitoring .
1st step: Main objective
It is important that you fragment your thinking to build your company's set of sales goals.
The first step is to define your main objective and then understand specific indicators.
This subject is totally related to the moment your company is living.
To help you find the moment of your commercial operation, we can think of some common categories:
Business and solution validation phase
It involves a commercial operation that is in the validation phase and has specific objectives. Mainly to prove demand and initial value of the solution.
Therefore, the main objective must have a quantifiable result that signals its contemplation, for example, number of sales.
The clearer the company's plan, the easier it is to define the main objective and the indicators that prove it.
Realize that in fact there are few general metrics of the operation. This is because controlling a high amount of indicators requires a lot of effort.
And, in this phase of commercial operation, this is not necessary.
Start phase - traction
A commercial operation that has already validated its solution is now dealing with the challenge of starting a sales traction.
But what does it mean?
Traction, basically, is a sequence of months in which the sales result rises sequentially, still with a small and initial team.
It is normal for this phase to last up to 1 year.
In this case, the main objective is to increase sales month by month.
The general indicators – which are important – increase, starting to consider the growth rate.
At this stage, we stopped looking at the number of sales and started to measure the new revenue acquired.
scale phase
When your operation reaches a phase of seeking scale, it means that it has already managed to find very clear patterns in the results.
So now is the time to turn up the volume – keeping to existing standards.
General indicators, in this case, can be related to the billing and the conversion rate existing in the funnel.
This proves the end result, increasing volume and maintaining quality.
high performance phase
After reaching scale comes the difficult task of maximizing the operation.
This basically means making each team member more efficient and achieving higher conversion rates.
In this way, we can have as general goals the new billing and the increase in the funnel's general conversion, as guides for the other indicators of this phase.
It is important to make it clear that this definition of phases should be simple.
That is, it is a time to choose general and broad goals.
Only in a second moment, more specific goals should be defined and controlled.
2nd step: Choose the variables to act
Since we already have the general goals of our operation, it is very common to see that infinite other metrics are stipulated.
The problem is that they don't always make sense, and it usually takes a lot of effort to maintain control.
Let's then understand how to choose specific, correct, and necessary goals. This is done according to the quality variables at that time.
Go back to the main objective so that the variables are more accurate.
Let's think about the goal of new revenue – or new MRR – for example.
Consider how this goal can be achieved. What are the variables influencing it that you have control over?
Some examples of specific goals that are part of an overall new revenue goal are:
- Price
- Sales amount
- Lead volume
- Time for the sale to happen
- Efficiency of leads to customers.
Anyway, there are countless variables that can be chosen.
It is important that you reflect on how much control and room for improvement you have for each of them.
That way you can make the best decision and create an action plan for each goal.
Again: it's important to focus on the moment the operation lives on. You don't need to go out and measure everything.
Measure only what is necessary to perform the optimization of what is currently required.
Once you get the necessary evolution, redo this process and adjust for the next time.
3rd step: Indicators and formulas
With the chosen variables, it is necessary to generate the indicators that support the goal.
Basically, it is the formalization of what we are going to measure and which formula we are going to use.
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Common indicators are:
- Average ticket: new revenue/number of new customers
- New sales: new customers billed in the period
- Sales cycle: time in days from lead generation to sale
- Lead conversion to OP: new opportunities of the month/by the number of leads processed in the same period
- Conversion from OP to customer: new customers/by the number of opportunities processed in the same period
- General conversion of the funnel: new customers/ (leads processed in the period - new opportunities generated in the period + opportunities processed in the period)
- New leads in the month: sum of leads with creation date within the month
- Residual leads: amount of leads that came active from the previous month
- Total lead load: new leads + residual leads
- Leads Processed: New Opportunities Created This Month + Lost Leads This Month
- New OPs in the month: number of opportunities with creation date within the month
- Residual OPs: number of opportunities that came active in the previous month
- Total OP load: new OPs + residual OPs
- Processed OPs: new customers for the month + lost opportunities for the month
- Ranking of reasons for loss: amount of loss by reason in descending order
- Lead volume by ABCD profile: volume of leads generated this month grouped by category A, B, C or D.
- Number of active leads: current number of active leads
- Number of active OPs: current value of active OPs
- Growth Rate: (Current Result/Previous Month Result) -1
- New recurring revenue: sum of recurring revenue generated within the month
- New one-off revenue: sum of one-off revenue generated within the month
- Total anticipated revenue: sum of product values (recurring revenue x prepaid periods)
- Customer acquisition cost: total cost of acquisition area / number of new customers
- Cost per lead: total marketing cost/number of leads generated
- Cost per OP: total marketing cost/number of OPs generated in the month
- Leads by source: amount of leads generated in the month separated by existing sources
- Conversions by source: Convert leads to separate opportunities by each existing lead source.
Again, we enter into a somewhat limitless subject that advances differently in each operation, depending on the needs of each business and team.
What is important at this point is to define the indicators that you are going to use and, mainly, their formula.
One recommendation is that all indicators exist for the operation as a whole and also for each individual on your team.
4th step: Transfer of information and follow-up
In order for goals to be really helpful to your growth, this is the most important part.
The challenge here is to make everyone understand the goals and their control indicators.
In addition to realizing what makes sense in all the indicators that will be controlled.
Therefore, it is important for the commercial area to carry out dynamics with the team, so that this information is debated and absorbed as much as possible.
Thus, everyone will be interested in measuring their own performance and results.
Once the basis of all this is understood, control must be facilitated.
Submitting a monthly goal has no effect. After all, it will only be close in the last days of the month and by then it may be too late to have its effect.
Therefore, our suggestion is for you to present goals – at least – weekly. And, ideally, daily goals for each of the defined indicators.
Control panels that present the goal broken down into days or weeks are ideal for spot management to take effect throughout the month, preventing you from not noticing gaps that accumulate day after day.
Another important point is that the information must also be returned.
In other words, the sales manager or sales operations of your team must have an organized environment to centralize the indicators.
It must also collect data directly from your CRM. Therefore, the ideal is for this process to be automated and in real time.
In the end, what we are looking for is a comparative effect on where we should be today and where we actually are.
After that, it's important to create action plans and align with teams so that they stay on track throughout the month.
Conclusion
Sales targets and indicators have the sole purpose of directing the team and maintaining focus.
Take this into account and see if your goal setting is well understood.
Also note whether the indicators are just the essentials and whether the targets are fragmented to become tangible.
Whether they are visual and frequently updated, and whether, above all, they are doable and challenging.
If you're satisfied with the above items, you're on your way.
But, if you saw an opportunity to evolve in any aspect, invest time in it and have one more ally in the search for growth.
There's nothing better than your own team orienting itself and charging itself to keep the results up to date.
Source: Businessworld.com.pk
