How To Define And Meet Your Sales Targets
The words ‘sales targets’ can strike fear into the heart of some, while enthusing and motivating others. Either way, if you’re in business, they are something you have to have and, to be successful, have to meet.
As with everything in life, a target or goal gives you something to aim for. Without it, it can be hard to focus. But how do you define your sales targets?
Defining Sales Targets
Targets can be set by product or service, by market segment, or by region. Whichever definition you use, your sales targets need to be specific and realistic. To this end, it is helpful to involve your team in defining them.
The simplest way to set your targets is probably by product. You need to work out how many products you have to sell, at what price, to cover your costs and achieve a profit.
The Pareto Principle
If you are basing your sales targets on your market, a good method to follow is the Pareto Principle. This tried and tested method suggests that you will make 80% of your profits from 20% of your customers. The skill here is to identify that 20%, and market accordingly.
Let’s say you sell automotive parts. You cannot define your market segment purely by those who use automotive products – for example professional mechanics and home mechanics. You will also have to consider gender, age, occupation, income, geographic area, and more.
Seeing The Big Picture
If you are setting your sales targets by region, you might find it more beneficial to set a ‘big picture’ target. In other words, set a target dollar amount that covers all products.
Of course, setting your sales targets is just the beginning. Meeting them can be quite a different story. Your overall sales target figure could be quite overwhelming for your team, so it’s better to break it down into manageable pieces.
What is the long-term goal? For example, do you want sales to grow by 50% over five years? Then break that down to 10% per year, and then down to monthly and weekly targets.
Involving Your Team
The next step is to set individual sales targets for those periods, for each team member.
Again, get the team involved. Ask for their observations and ideas. Which products do they think are selling well? What type of customer is the product attracting? Are there different ways to market that product?
How will your team benefit by helping you grow the profits? Will there be pay rises, or a bonus? Will you be taking more staff on? It’s good to share an incentive.
Tracking Your Sales
You also need to have in place a good system for tracking sales, by product, by price, by geographical area and, of course, by employee.
To grow your profit, you need to do one or all of the following:
- Grow your customer base
- Get existing customers to buy more
- Launch a new product or service to sell to new and existing customers.
In short, it’s about outstanding customer service, and generating and converting new leads. Make that part of your team ethos and you’re on the road to success.
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