Have you ever thought whether there’s a way to measure and compare present sales to a target or past performance? If you did but had no idea how to do that, you are going to find out. Sales targets lets you do that, and you are just about to find out how.
What is Sales Target?
Sales target is a measurement that lets you calculate the revenue of current sales and compare it to a target or past performance. It can be set as a number of units sold, monetary value or number of accounts. Observing the performance of sales against targets is the main doctrine of any sales management strategy. In addition, it has an influence when creating a data-driven culture.
One way to set a sales target is making sure it is visible to the whole team. It can be very impactful to design an effective sales target visual. For instance, a bullet chart has the ability to capture past performance, current performance and target in one single visual. When your team is trained to use this visual, you will have a team with the ability to tell about the performance of sales.
The metric is used by sales directors, sales reps, executives and sales managers.
How is it Calculated?
According to the Harvard Business Review, when 10%-20% of salespeople miss certain goals, the salespeople might be the problem. At the same time, when most salespeople miss, their goals are the problem.
This only shows how important setting accurate and challenging sales targets is. The balance is a very delicate one and needs accounting for past performance, business goals and the performance of the individual sales reps. Your team can be influenced a lot by setting sales targets and getting them right. In addition, reps may get motivated to dig deep in order to close more deals.
When setting sales goals, there are many factors you need to take into account. Moreover, there are things you need to consider for specific targets, whether you’re going to work with past customers, expand existing accounts and increase new business.
Additionally, incentives’ structure for the team, like compensation and commission model, should be influenced by sales targets.
The sales target attainment formula looks like this:
(Sales for the current period/Sales target) x 100
How can You Monitor Sales Performance Against Targets?
If you want to achieve sales targets, you have to daily, weekly and monthly observe your performance. Most of the time, sales targets are dynamic and focus on short-term performance. If more individual reps are going to notice and understand how his/her work contributes to the target, he/she may have more motivation to achieve the targets.
There is one easy way to monitor the sales performance against targets – use a sales leaderboard. You can have a television and display the leaderboard there. You should also take a salesforce dashboard set up into account.
Now that you’ve read this article, you must be aware of the sales targets and how they work. Things may seem complicated at first, but they get easier the more information you achieve.