Setting sales targets is part of your job as a manager, and the temptation is always to set optimistic expectations for the team. Reasonably high goals can encourage sales pros to stretch themselves and deliver more than they thought, but you have to be careful; sales goals that are too high can give the impression you’re unreasonable or unaware of how hard making a sale can be. When your team inevitably fails to reach the high targets you’ve set, morale can plunge across the office and take performance numbers with it. At the same time, you don’t want to set targets so low they fail to motivate the team. Ideally, the benchmarks you set will be high enough to get real effort out of the sales staff but realistic enough for a competent, hard-working sales rep to comfortably meet.
Accurate Forecasting Helps Set Reasonable Goals
Accurately forecasting sales for the next month, quarter, or year is more art than science. Many sales managers start with their team’s previous performance, optimistically add a few percent to last year’s numbers, and then set that as the new sales goals. This can work up to a point; the numbers are usually off by a bit, and not everyone can be expected to perform equally, but if your key performance indicators tend to average out everyone’s output evenly, no real harm is done by being a little bit off. To get a more accurate forecast and set really specific goals, you need to do a bit more work. Look at the individual team member’s numbers from previous periods and use those to assign a personalized sales target you’re confident can be reached with a little effort. Most sales professionals, if they’re continuously learning and improving, can manage a few-percent increase in output per cycle, and so a 5% hike in goals, for instance, shouldn’t be impossible. Also consider the market in which you work. While wholesale pork sales probably remain relatively constant throughout the year, car sales fluctuate a lot between seasons. If your company sells swimsuits, it’s probably normal to make fewer sales in December than in June. Try to keep this in mind when you’re setting the next month or quarter’s targets to avoid holding your people to a standard that the market itself won’t let them meet.
Adjust Expectations With New Inputs
As careful as you’ve been in forecasting output, and as reasonable as you are in asking only what you’re sure your people can achieve, you’re bound to guess wrong once in a while. That’s why it’s so important to build feedback loops into your decision-making and goal setting. You want to start with direct feedback from the staff. Do the members of your team feel like they can meet their goals? If the majority seems to think you’re asking too much, there’s no harm in walking back your projections before the final deadline. Even if you’re getting positive feedback, the numbers don’t lie. Watch the trend lines as the season progresses and revise your estimates weekly. As the manager, you’re likely to spot a shortfall before anybody else, and it’s up to you to drop those numbers a bit when it looks like you’ve actually asked for the impossible. This all works in reverse, too. If your forecast was overly pessimistic, you can lift targets. Better yet, keep the easy targets and just add a bonus “stretch” goal to really motivate the team with the unexpectedly good news. By carefully projecting numbers, monitoring progress toward goals, and interacting with the people on your team to develop a realistic outlook, you can reliably set sales targets that gently prod sales professionals to grow in their craft while rewarding them with accomplished goals and bonuses that reflect their real value to the team.