Sales Goals in Business: How to Set Sales Goals

Sales goals are objectives that sales teams aim to achieve by the end of the year, quarter, month, or week. These sales targets often relate to meeting a revenue quota (or a number or dollar amount of products or services sold). Many granular types of goals can also incentivize sales teams to improve business processes, optimize daily productivity, or increase the number of customers entering the sales funnel.

Organizations set many types of goals incentivizing sales reps to achieve revenue targets and improve the sales process. Here are some common examples:

1. 1. Activity goals: Activity goals require salespeople to perform tasks (like product demos, lead generation, or sharing relevant industry news with customers), rather than measuring dollars or products sold.
2. 2. Outreach: In businesses that rely on prospecting—or finding new customers—team members may have goals to contact a certain number of people within a new target market via cold calls and emails.
3. 3. Process improvement: Process improvement goals focus on optimizing specific tasks within the sales funnel. Examples include closing deals in a shorter sales cycle (the time it takes for a qualified lead to become a customer), increasing new customer conversion rate, or reducing customer churn rate.
4. 4. Professional development: To hone their revenue team’s skills, sales leaders may impose professional development goals like attending conferences, specialized trainings, or meetings with mentors.
5. 5. Sales revenue goals: A revenue goal refers to the amount of money a specific team member aims to earn in sales during a particular time frame. This goal type makes up the foundation of most sales goals and is often based on an annual revenue goal. Managers break down their team members’ earning benchmarks into quarterly, monthly, and occasionally weekly numbers.
6. 6. Stretch goals: These goals increase revenue by incentivizing the best sales reps to overachieve. For example, when setting a goal for a sales rep who achieves 110 percent of their budgeted revenue goal for one year, the manager may increase their goal to 140 percent the following year.
7. 7. Team goals: The sum of an entire sales department’s individual quotas is the yearly team goal, which incentivizes team bonding and collaboration rather than competition. Alternatively, many sales organizations make sales goals competitive among reps, incentivizing the person who closes the most deals with bonuses or other rewards.

Regardless of the type of goal setting your organization needs, you’ll follow the same basic instructions to create effective sales objectives.

1. 1. Choose a type of goal. Before defining the goal, decide what area of the sales process you want to improve. Would a monthly sales goal keep your team on track? Do you want to bring in new business? Would increasing the number of sales calls next quarter have a big impact? Evaluating these questions will help you determine the best types of goals to set.
   
2. 2. Set realistic goals. Use sales metrics from the previous year to gauge your team’s capabilities. Set attainable goals for your team but don’t sell them short. Make the goals challenging but achievable.
3. 3. Make the goal SMART. Effective sales teams use SMART framework (SMART stands for specific, measurable, attainable, relevant, and time-bound) to make sure goals are easy to communicate, understand, and track over time. Learn more about SMART goals.
4. 4. Determine how you will measure success. Implement tools and procedures to measure KPIs (key performance indicators) for your specific goals. Processes to track key performance indicators may include team check-in meetings or a spreadsheet that each rep updates monthly with their contributions. Tracking your progress will help you hold the team accountable and allow you to evaluate goals in real-time.
5. 5. Check-in and revise. When the time frame for your goals elapses, evaluate your team’s sales performance. If there are things you would change, implement those updates for the next sales goal.

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