What are sales targets?
A sales target is a goal or objective set by the company – usually by senior management – and it determines the amount of products or services to be sold over a predetermined period. Targets can include new client acquisition, sales in value, or amount of units sold.
These targets help guide the company’s success.
What Are Some Examples Of Sales Targets?
As we already know, three main sales targets. These are revenue generated, the amount of sales in units, and the acquisition of new customers.
An example of revenue generated may be trying to achieve $10000 in sales over a specific period such as 30 days.
Another example of sales targets is selling 4500 units of a product over 1 year.
The final example is acquiring 10 new customers every month.
How Are Sales Targets Calculated Using The Sales Target Formula?
Sales targets can be either set by revenue, sales, or acquisition of new customers. These can be adjusted based on market changes and economic downturns.
Achieving sales targets positively impacts revenue generation, profitability, and company market share thus making it a crucial component of the organization’s goals.
The Sales Target Calculation
To determine your sales target, you need to know the number or value of sales that have been made and you need to know the sales goal the company has set.
The formula is as follows:
(Sales/ Sales Target) X 100
An example of this is if you sold $1000 worth of products and your target is $1500, your sales target would be the following:
($1000/$1500) X 100
= 66% of your Target has been achieved.
How closing big deals can help achieve your sales targets
Closing big deals can help you achieve your sales targets with relative ease. If we set sales targets such as units sold or revenue generated from sales, a big client can bring in more business than perhaps 10 smaller clients.
It is worth noting that even though big deals lead to big money, you should always ensure the deal is the right fit.
Make sure you pursue only “good fit” large deals
A company can spend a lot of time and energy chasing deals that eventually go to a competitor or fizzle out. That’s a fear many of our clients have. You need a sales target formula to know the best deals to pursue.
Everybody has had some experience where they chased some large accounts. They put a lot into something that doesn’t happen and they feel somewhat burned.
Tom Searcy calls these “target filters.”
The secret here is being clear about what a fit is and what not a fit is. You must be super clear on this. I define “fit” as a situation where you’re an ideal fit for them and they’re a perfect fit for you. By working together, you are thriving versus just getting by. We’re not talking about an “OK” business move.
The Sales Target Formula Secret Is To Be Very Clear On The Right Fit
We’re talking about a great business move. Let me emphasize again; this must be a super, precise fit.
What makes this idea work is the clarity of your target filters.
The challenge we see many times is this: it’s tempting for a company to go after a more significant deal or account because of the considerable revenue. Or perhaps, it’s a big name they would love to have on their client list. However, a big name or ample opportunity does not mean it fits your business well.
I refer to this as “big deal intoxication.” You get drunk on the possibility of something happening and start making exceptions. If this was a tiny deal, there’s no way you do these things. You wouldn’t put resources into it. You wouldn’t jump through flaming hoops or jump over barrels. If this were a minor deal, you would make them earn the time and the energy.
The goal is not to go after okay deals.
It’s to go after great fits. Most folks have had an experience where they landed a big, sizable client. It may not have been your biggest client, but it was big enough that you made some compromises to get the deal.
After you landed that deal, you realized you weren’t a good match. This deal made you compromise a little more than you should have compromised. That’s because you didn’t implement the right sales target formula.
Since you value your reputation and you want the client to be happy, you bend over backward to make them happy. You throw extra resources at it. You give them extra time. You do everything that you can to make them happy. What happens is you give them the extra time and the extra resources.
The extra time and resources consume the profit you were going to make on the deal. You decided to be a little more opportunistic and ignore some of the signs that you should not have ignored. All of this happened because your companies were not a good fit.
Use a Target Filter
We have a great target filter exercise that we take people through to see if you’re a fit. Our sales target formula shows where you’re not a fit and it helps you protect your time so it’s not wasted. It helps prevent you from bringing on clients that may suck your time and energy dry.
The goal is to play to your strengths. The answer to the question is to get really clear, super clear about what makes your business thrive.
I want you to emphasize the word “thrive.” Don’t just get by with an okay business deal. Make a deal so that you and your customer can thrive.
Learn more about Big Swift Kick’s Sales Consulting Services.