It’s the time of year when people think about sales goals. Businesspeople discuss monthly, quarterly, and year-long goals for the coming New Year. Salespeople look at potential new business and how to outperform last year’s numbers. But what are realistic sales goals?
I’ve said before. You Cannot “Do” A Goal – You Can Do Activities. To set a goal without recognizing the activities, it will take to reach the goal is little more than a wish. One way to implement activities and set achievable sales goals is to do the math.
How to Set Yearly Direct Sales Goals
Sales have been called a numbers game. There’s much more to it than numbers, but the numbers are a key element. To set realistic goals, the sales team needs to know the numbers.
Playing by the Numbers
Setting achievable goals depends on understanding objective criteria. When setting yearly goals, the numbers from the previous year should be one of the the first things reviewed. Once last year’s numbers have been analyzed, the next step is to identify areas for improvement and recognize activities to implement for positive change. Let’s look at the numbers.
What was the sales volume the previous year? Can it be repeated or improved upon, and if so, what activities will get you there?
Number of contacts to set a presentation
Whatever your lead generation method is, how many contacts did it take to set an appointment? Can the percentage be improved?
Number of presentations to close a sale
How many sales presentations did you need to close a sale? One out of three? Two out of ten? Regardless, use this information to predict how many presentations you’ll need to reach your sales goal.
What’s your average sale?
What was the average order last year? Was it $100, $5,000, or $25,000, and can it be improved?
It’s Time to Calculate Your Goal
Once you have the numbers, you can do the math and calculate the number of contacts you’ll need to make to hit your goal.
For example, with a yearly goal of $500,000 in net sales, at an average sale of $13,500, you would need 37 sales to reach the goal. At a close percentage of 20% (2 out of ten presentations resulting in a sale), you’ll need 185 presentations to reach 37 sales.
If presentations set per contact are 10% (for every ten contacts, one presentation is set), you’ll need to make 1850 calls to set 185 presentations. With 260 working days on a five-day workweek, you’ll need to make 7.11 contacts per day to hit the $500,000 goal.
Have You Calculated Your Goal?
Do you have sales goals set for next year? Do you know the numbers and how to get there, or are your sales goals little more than a wish? I wish you well.
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