The What, Why and How of Setting Sales Goals the Right Way
The What, Why and How of Setting Sales Goals the Right Way
When you are setting your goals for the year or for five years, make sure you use the right formula. Most sales professionals tend to get the “what” in the goal-setting process and let the rest fall through the cracks.
There are three steps to goal-setting that create powerful results. They are…
1) Defining what the goals are
2) Defining why you want to achieve those goals
3) Defining how you are going to achieve those goals
Write your goals down and record them, otherwise they are wishes not goals. Everyone
says they already know that and yet, astonishingly, few salespeople actually write their
goals down and use them as a roadmap for their progress. Or, if they do write them down, they rarely refer back to them on a regular basis to check their progress.
Once you know “what” your goals are, then write down “why” you want to achieve those
goals. Be as exact as possible and remember, “The more specific, the more terrific.” (Yes that’s corny I know – but it’s easy to remember.)
Understanding why you want to achieve your goals provides a psychological driver behind the work that you do to accomplish them. When you know why you want to achieve something, you work harder to get there. It gives you the boost you need when you experience challenges or setbacks along the way.
Interestingly, once you define the why behind what you want to achieve, the how gets much easier to determine and write down. It is important to spend time understanding why you want to achieve the goals you have clearly specified. This is pivotal in the goal-setting process and makes the how become a plan that you are actually committed to, instead of just being compliant with “what you’re supposed to do”.
Reflect often on where you are in the achievement of your goals so you can examine both your wins AND your misses in order to know where you need to go from this point. When you have a clear picture of where you are doing well and where you need to focus more energy and discipline, you can make sure that you are course correcting in the right direction. This means understanding what specific actions you need to take and what behaviors you'll need to change to get to your desired results.
The reason most salespeople fail to achieve their goals is because they lack a detailed plan that tells them how to achieve those goals, in the time they want to achieve them.
The detail comes from all three areas…
Setting goals without knowing why you want to achieve them and specifically how to
achieve them is like deciding to climb a tall mountain with no training, no map, no guide or any equipment besides your shoes, clothes and some water. Of course you would not want to attempt this and yet very few salespeople understand what is necessary to do on a daily, weekly or monthly basis to achieve your goals. Just as
most people are aware that buying a lottery ticket is not a reliable way to plan for
retirement, it’s also important to realize that simply setting a goal and then wishing to hit it is not an effective planning strategy.
Here is a system to make your goal planning even more effective…
#1 - Define the what and the why part of your goals with detail and make this definition quantifiable for the “what” and meaningful for the “why”.
For example, what, specifically, are your sales and production goals for 2008? Decide what your specific goals for the year are, and then state them in a direct, concise and
measurable way, that makes it clear what you want to achieve, and when you want to
accomplish that goal.
Let’s say, if your focus is on revenues, then you might define your goal as: "I want to close $1,000,000.00 in new business and $1,000,000.00 in existing customer repeat business this year." Make sure you split out new business and repeat business.
The reason is because you want to define and quantify how much new business you are going to create instead of just focusing only on the business that you know is going to come in without much effort. Of course it is vitally important to maintain relationships and keep existing customers happy. As a professional sales person, it is also extremely important to actively create new business – otherwise you essentially become an “account manager” and not a sales professional.
If your goal is to increase customer numbers, then you might state something like: "I will create 20 new customers this year, and sell to 16 existing customers." Other goals could be something like –
• I will increase the annual profit value of each of my customers to an
average of 40% or…
• I will increase my amount of referral business by 70%
(Notice the phraseology of “I will” instead “I want”. It’s powerful subconscious programming for your mind.)
Examples of the why portion of goals might be…
• The reason why I will create 20 new customers this year and sell to 16 existing customers is because this will increase my commissions. This will enable me to provide the lifestyle I want to have for my family and it will allow me to start a college fund for my two young children.
• The reason why I will increase my amount of referral business by 70% is because this will enable me to expand my business quickly and get my yearly sales number to $5 million within three years.
#2 – Define the how portion of your goals and then break down the goals into outcomes that are more manageable.
Once you have a clear, quantifiable statement of your goals for the year, break them down into more manageable monthly and weekly outcomes (results). For example, if your goal is to gain $1,000,000.00 in new business, and your average sale size is $50,000.00, then you need to make 20 new sales to achieve that goal. Based on average sales statistics (and if you've measured your own statistics, which you should, use those instead), the average sales person closes 1 in 3 qualified leads. Therefore, to make 20 new sales this year, you would theoretically need to have 60 qualified prospects.
Now, the average sales person needs to meet 3 prospects in order to qualify 1, and must usually make about 20 attempts (phone calls, voicemail, e-mail, etc) to get one meeting (Bear in mind this is starting from a “cold” lead position, not from an existing relationship that you call for lunch any time.) So in the above example, to realize your goal of $1,000,000.00 in new sales, you would need to make 3600 attempts and meet 180 prospects over the next twelve months.
Before you get intimidated by that number, let’s look at how those numbers break down…
300 attempts a month
75 attempts per week or
Just 15 attempts per day
That is a practical, easy plan to follow if you discipline yourself to actually do it. Discipline is the key. It’s easy to allow yourself to get distracted. Do not allow emotion to dictate what you do or don’t do in terms of your effort. Emotion should never determine how much you work. As a sales professional especially, discipline should always determine the energy and intensity you give to your work. Action creates
#3 - Implement your sales strategy and execute your plan.
Now that you have your plan, you're ready to implement your sales strategies and execute like a finely tuned machine. For the purposes of understanding the time it takes to make calls (and by that we’re referring to any kind of contact with a prospect or customer), let’s look at some common statistics. Now granted, this will vary with each person and could be slightly different depending upon the exact circumstances for each call. Typically if you make 25 attempts per day, it takes about 2-3 hours to complete those calls.
Fundamentally, sales is all about discipline and it’s been said that "daily objectives are the best indicators of character." So to help you complete your daily sales plan, consider using some of these ideas…
• Get to work early and ease into your day as opposed to being in a frantic rush in nerve wracking traffic. This affects your mood and that will show in your calls.
• Call at all times of the day. Sometimes even Friday afternoons can be the best time to make sales calls. Amazingly enough, even times right before holidays can be good times to catch people for an introductory call.
• Mix up the types of contacts. Remember, “The magic is in the mix!” Make some on the phone, some face-to-face, some at networking events and some by e-mail. Even a fax can change things up and break the pattern. Many times a successful communication revolves around breaking the pattern that people tend to expect.
• IMPORTANT: There are times when salespeople might feel like they’re just lost in the dark or that they cannot seem to get things moving. One of the reasons for this is because they really have no idea how they’re doing and what their progress is at the moment. This makes it impossible to take the actions needed or course correct behaviors because there is no baseline from which to make those kinds of decisions.
You must track your communication attempts, meetings and close ratios consistently, and measure your results. Then you can adjust your plan based on your real metrics. You may find that you're above or below the averages used previously and yet if you don't measure to find out, you'll never know.
• Stay focused. Top salespeople have one thing in common - they are consistently focused on what needs to be done to achieve their goals. Write down or put in your electronic calendar the specific time you're going to spend attempting to reach customers each day or week, and close your office door until you're done. While you're at it, turn off your e-mail, instant messaging, blackberry and don't take any incoming calls. While it may seem unimaginable to actually focus your time completely for 2 to 3 hours, this time will be profoundly useful and productive – much more so than if you have 37 interruptions while you’re trying to work. The fewer distractions you have, the faster and better the work will get done. Focus yields results.
• Prospect all the time. Whether you choose to make all your weekly calls in one day or break them up into a five day plan is not important. What matters is that you are consistent. It gets easy to rest on the strength of the numbers you know will be coming in regardless of your outbound efforts. Yet, that is a trap. Top performers are always looking for more business. Keep records on your results.
#4 – Recognize your efforts and your successes.
Finally, remember that tasks that get rewarded are tasks that get accomplished. So find a way to reward yourself after finishing your calls each day. (This does not mean you are done for the day since there are other tasks to be completed. Yet, it’s important to
recognize what you have accomplished before moving on.)
Make it something that is attractive to you personally so it is a motivator to get your calls done and implement and execute every day. Everyone is motivated by different things so you have to define for yourself what those things are (For example - a nice walk outside when the weather is pleasant, a gourmet coffee, a short break to check the sports page, a chance to make a quick call to your spouse or a friend to say “hello” etc.).
The important thing is to make sure you reward your quality efforts and accept the fact that you don’t get the reward unless you finish your sales calls. Make sure to update your goals consistently and course correct when needed based on actual results. Also, make your goals known to others and have them in plain view on your desk or somewhere you can see them constantly.
Research has determined that people who share their goals with others are 70% more likely to achieve them. So share your goals with the people you respect the most, and you'll work even harder to make sure you don’t let them down. The difference between top sales performers and the rest of the field is that top performers have a plan to achieve their goals, and they act on that plan every day. Implement and execute and keep track of your results.
#5 – Have passion and certainty around your goals
Having great passion and certainty about your goals leads to having the attitude it takes to make things happen. The more passionate you are about achieving your goals and the more certain you are that those are the right goals for you, the easier it is to win. Remember that your attitude has nothing to do with the mood you might be in at this moment. All human beings will experience bad moods at some point in time. Attitude is what you do about the mood you’re in, so that it doesn’t get in the way of your success. Make a habit of recognizing the things in your work and your life that affect your sales success.
Be open to self-awareness which leads to self-reflection which leads to better selfmanagement at the point of contact when situations occur in the real world.
- Michael Stahl