How to set smarter sales goals for your sales team – Part 2



If you haven’t seen Part 1 of our blog series, read it here. In this part, we’ll share our tips for goal-setting with input from the sales experts.

As a sales organization, you will always battle with the question: Should you base commissions and bonuses on sales figures, profits or another metric? Not choosing the right metric will lead to poor results. No pressure, then…

Most sales organizations use specific sales goals to be able to prioritize what to focus on and give their salespeople direction. Having the right goals, formulated in the correct way, will help motivate your team and drive incremental B2B growth. Naturally, businesses tend to link their salespeople’s compensation to their achievement of specific goals, either at an individual or team level. As such, effective goal-setting is essential.


The right sales goals increase performance 

According to Harvard Business Review (HBR), “studies show that revising compensation in line with market trends can have a 50% greater impact on sales than advertisements have, for instance.”

Further, they state that having the right sales goals is crucial: “A vital part of getting compensation right is setting the proper sales targets. Both academic research and our experience working with B2B companies in a variety of industries indicate that poorly set targets often misfire, failing to deliver the expected benefits and demoralizing the sales force in the process.”

So, if the sales goals feel too unachievable or unrealistic, your salespeople may feel like giving up. On the flip side, if your goals are easy to achieve, your salespeople could benefit from incentive payouts too easily, and they may be undeserved. Worse, if your sales goals and their respective difficulties are not evenly distributed among the team, this may be perceived as unfair and could create distractions and breed bitterness over time.

Setting specific goals does in fact increase motivation beyond simply thinking that you’ll do your best, according to a study. It reported that professionals who stuck to a goal-oriented plan performed better than those who didn’t.

As David von Rothenburg, Global Head of Sales at Pitcher, says: “When it comes to goal-setting, the key is to drive meaningful behavior using SMART goals. Goals need to be both challenging and achievable with the right plan and execution in place. It’s all about having a plan and executing on it, such as understanding market potential, which customers to focus on, utilizing account plans and territory maps and so on. Goals need to be motivating as they also drive [customer] retention and culture.”


5 quick tips for goal-setting from the experts 

  1. 1. Educate and empower your sales team with coaching

Sometimes it’s about inspiring and motivating your team to actually sell better, not just more. Seems contradictory? Since education (sales coaching and training) is a long-term plan for increasing your sales reps’ knowledge, it will help them feel empowered and be even more convincing when they are selling – ergo, more sales in the long term.

Sitting down with your team and understanding their strengths, weaknesses and any areas in which they might want to improve will help you identify specific problem areas. It may be that they’re struggling with something that’s an easy fix but breeds great results. Knowing this, you can now schedule time to coach your team and set relevant targets to help your salespeople achieve their goals.

It can even relate to their personal goals, not just professional ones; for example, it could be about gaining confidence in presenting in front of executive leadership teams or public speaking.

This goes without saying, but ensuring your team has a thorough understanding of your product, the sales plan, the average sales cycle and the overall sales strategy is crucial. You should even include your team in discussions when considering objectives, as they’re the people who talk to prospects on a daily basis. Demonstrating that you incorporate their feedback into your decision-making will not only help you set better goals, but it will also inspire teamwork and positive collaboration.


When you invest in your team, they feel valued. 

Encouraging your team to grow professionally and listening to them will result in stronger performance and more sales goals being reached over time.

Solid coaching and training will help you to achieve goals in a quicker and easier way. A good sales enablement tool will facilitate this, allowing your reps to up-skill and improve their existing skills when needed.


  1. 2. It’s all in the range

Instead of focusing on achieving one single number, set a performance range as a sales goal.

For example, rather than an individual sales rep trying to reach $1 million, set a success range of $0.8 to $1.2 million. Then, have incentivized pay kick in at $0.8 million and rise with their level of performance.

If you don’t feel confident about the accuracy of your goal-setting, you can establish a larger success range with a slower rise in incentive payout.


  1. 3. Reward activities and set small targets to achieve big goals

As with a lot of things in life, you can’t always control the results, but you can control your actions and inputs.

If, after lots of trial and error, it’s proving hard to predict sales, you can opt to measure and set goals for the activities that contribute to sales. This can be equally as inspiring, motivating and engaging for your team, especially for long sales cycles!

Goals to include could be the number of new leads generated, C-suite level conversations or calls to cross-sell or up-sell products. Note that these types of goals can work really well as part of performance management. However, they’re usually not recommended for determining commissions or incentive pay. You might get more of these sales actions done, but it doesn’t necessarily translate to more sales.

So, if you’re finding that few reps are achieving your goals, try setting goals around smaller sales activities that will lead to reaching the bigger ones.

As an example, instead of telling your reps they need to close 60 deals this year to meet their quota, set a lead-generation activity goal of making 15 cold calls and sending five follow-up emails each week. This will help them feel more in control, empowering them to align their daily activities with their sales goals. This will boost morale in the long term. It’s also a strategy that is easy to track.

In the same vein, if you are a part of a sales force that has many transactions with shorter sales cycles and your sales goals are not working for you, you could benefit from setting shorter time frames. This limits the potential damage done. If you are executing bigger deals and dealing with longer sales cycles, adding a short time frame for your goals won’t be as suitable.


  1. 4. Chase waterfalls

The old TLC song that goes “don’t go chasing waterfalls” doesn’t apply here!

Following a waterfall goal system means your whole team works towards a set end goal. 

As an example, if you have a sales goal at the end of the year, you can set targets throughout the year where each rep contributes a set amount more than their average each month.

It can look like this: “Add $2,000 more revenue in Q2 (than Q1), $3,000 in Q3, and $4,000 in Q4.”

This system is a great morale booster and allows for more flexibility. Say that rep A falls just slightly short of their goal, but rep B goals above and beyond. With the waterfall system, you can adjust their individual numbers accordingly.

If your team hasn’t been performing too well, then this system works better than suddenly setting a much bigger goal (without the monthly goals) for them the following year. Always break the big goal down into easier chunks.

This gives your reps adequate time to ramp up their productivity and output. Plus, it will produce higher quality work and better sales numbers in the long term. 


  1. 5. Make data your best friend

A great way to set goals is by looking at your existing data and letting that guide you. 

How has your growth rate been for the past few years, and how have your best salespeople performed?

As with any good plan, you should work your way backward.

Work backward from your company’s annual revenue target and break it down into monthly, achievable goals. This not only gives your team a realistic view of the activities needed to drive the end result, but it also helps you to determine what’s achievable and realistic.

And how do you get buy-in? You can visualize how the sales process will work for your reps at your next sales meeting. Show a visual describing how you’ll reach your target (or demonstrating how you got to a previous target) with the activities and inputs that they have control over.

For example, call X prospects this month (assuming a Y conversion rate and Z average deal size) = you’ll hit your target.

How do you create a sense of urgency and drive motivation? Again, breaking it down into smaller chunks on a monthly or weekly basis will create a sense of urgency and boost motivation to increase productivity.

Calculate each salesperson’s close rate with this formula:


  • Look at the sales rep’s past performance record
  • Calculate how many sales activities (including calls, emails or sales meetings) they usually need to close a deal. If it takes them ten calls to close a deal, their close rate is 10%.

So, if they need to close 50 deals this year, that means making 500 calls. This will mean an average of 40 calls per month or ten calls per week.


How software can help set and achieve sales goals

One of the main things that software can help with is enabling you to increase your customer understanding and leverage sales analytics to track sales processes to understand what went wrong, when and for whom, and similarly, what went right. 

A sales enablement solution can help you set new goals by examining your sales force’s past performance, looking at average conversion rates, and more. You’ll gain visibility into the number of activities required to meet your specific sales targets. Then, you can set weekly or monthly goals for your team, which are much more achievable, trackable and controllable. Having the right tools in place helps you stay on track and monitor progress.

Check out these success stories for more information about sales enablement and analytics.

Hopefully, these tips can help you set more realistic goals and follow through on them, earning you more closed deals in the long term. Happy selling!

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