New Year, New Sales Goals ... Who Dis?

As we all head into a new selling and calendar year, let's talk about goal setting and the achievement of revenue targets through strategic metrics. 

Let's use an example of goal achievement metrics below.

Product & Service Industry Selling (B2B and B2C)

• You sell a product or service that generates revenue for an organization. You have a monthly, quarterly, or annual quota for units, revenue, or both.

Let's assume you have a $1M revenue target for the year. How do you achieve this? Let's break it down:

• What percentage of the market who buys your product or service will look to source/purchase that year? Let's assume 25% of the market for this exercise. It is fool's gold to assume the entire market that purchases your product or service is shopping for alternatives each year.

• What is the average closing percentage in your industry/vertical market? Let's also assume 25% for this exercise. The best sales professionals have higher closing percentages within their industries, which makes hitting quotas, or exceeding them, happen consistently. 

• What is the average opportunity size (deal size/product value)? Let's assume $100,000 for this exercise. Have you ever watched Shark Tank on ABC? Have you heard of Mr. Wonderful, Kevin O'Leary? What does he always say? "Know your numbers..."

The rest of the exercise is simply Math.In order to achieve our $1M revenue target for the year, we need to meet with 160 prospects during the year, or approximately 3.5 each week (accounting for 46 working weeks, because who works 52 weeks per year). When we meet with 160 prospects, we know that 25%, or only 40, will actually be sourcing or purchasing this year. And of those 40, we know that we'll sell/close 25% or 10 new customers @ $100,000 each, on average.  

You can do the same backward math to understand how many cold calls, networking contacts, or warm leads you will need to prospect to enable you to meet with 3.5 new opportunities each week. Everyone has a different conversion rate (the rate from which you call upon a certain number of prospects, to the actual number that agrees to meet with you), and that's OK. What's yours? It's not magic, it's just math, too.Oh, and I know what you're thinking. "How do I meet with a half (0.5) of a prospect?" You don't, it's just the math. But because you operate in a #growthmindset and might consider yourself an overachiever, you decide you want to meet with 4 prospects per week instead of the mythical 3.5. If that were the case, your closing percentage could decrease and you could still meet your revenue obligation. But don't do that, that's just more work for fewer rewards.Just sell more, at higher closing percentages, and be rewarded for that. 

The moral of the story? Any revenue goal can be broken down into bite-sized pieces so you're better able to operate with short-term or weekly/monthly goals in mind. Veteran and Rock Star sales professionals don't just 'wing it' each year, in hopes of success. They have a plan, and they stick to the plan, and so should you.    

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