How to Set Realistic Sales Goals - dummies

How to Set Realistic Sales Goals

By Marina Martin

Setting realistic sales goals is part logic and part luck. The goal needs to be ambitious enough to motivate your employees and avoid leaving potential revenue on the table, and yet not so pie-in-the-sky that no one can reach it and everyone is therefore demoralized.

You can set sales goals for your company in much the same way you can set other goals — using the SMART method:

  • Specific: “Sell more” is certainly a goal, but it’s a lousy one. Sell how much more? And more what — units? Dollars? Net or gross? Nothing short of a specific number and unit of measure will do here.

    In sales, you should also define exactly what state the sale needs to be in by the deadline. For example, does an e-mail from a lead that says “Sign me up!” count, or does the first check have to have cleared the bank?

  • Measurable: In addition to specificity, you need to make sure you can actually measure progress towards a goal.

    In sales, if you give each salesperson a goal to sell 100 units, but you have no way to know who is ultimately responsible for each goal, this goal is not measurable. You’d have to either change the goal to a team goal, or find a way of assigning sales to individuals.

  • Attainable: It’s one thing to put giant audacious goals up on your wall and visualize them in the shower every morning. It’s another to hold your sales team accountable to them. If you currently sell 100 units a month, maybe you can sell 125 a month — but moving your goal to 1 million a month is not achievable, to the point that few would even attempt sales that month.

  • Realistic: Along the lines of attainability, your sales goals shouldn’t require your team members to work 100-hour weeks. The best goals stretch and challenge us — they don’t put your best people on medieval torture racks.

  • Timely: “Sell 100 units” is specific — but by when? Selling 100 units in an hour is a whole different task than selling 100 units over the course of a year. Give a very specific time frame. Include a time of day (e.g., by January 17 at 5 p.m.) where possible for additional clarity.