Analyzing and Achieving Sales Targets

Lo1. Analyse Sales Targets

What is Sales Analysis? Sales analysis is using data to evaluate

sales team performance. It provides valuable insights about the top
performing and underperforming products/services, selling and
market opportunities, and includes sales forecasting.
A sales report, also known as a sales analysis report, is a document
that summarizes a business's sales activities. This report typically
includes information on sales volume, leads, new accounts, revenue
and costs for a given period.
An examination of how well a company's products are selling,
especially compared to how the company expected them to sell:
Sales analysis provides important feedback for managers to gauge
sales force performance.
A sales target is the number of products to sell in a given period to
break even or make a profit. These targets should meet the forecasts
of your business plan.
Sales targets may product or service
vary according to: merchandising and sales strategy
sales strategy
Promotional strategies and their duration,
cycle, territory coverage and product or
service focus.
A team may small work teams
include: business team
full-time, part-time, casual or contract staff
people with varying degrees of language and
literacy
Sales targets may product or service
vary according to: merchandising and sales strategy
sales strategy
Promotional strategies and their duration,
cycle, territory coverage and product or
service focus.
people from a range of cultural, social and
ethnic
Backgrounds people with a range of
responsibilities and job descriptions.

A sales target is a specific goal or objective set by a company or individual for the amount of products or
services they aim to sell within a given time period. Sales targets are often used to track performance
and motivate sales teams

Sales goals are objectives for a company, sales team or individual representative to meet to increase
overall success. Sales teams typically measure their success by how much profit their company makes,
so many sales goals are smaller steps toward the larger goals of increasing revenue and retaining
customers.

Setting the right sales targets for your team can be a difficult act to do, especially when you need to
balance pushing their limits with the likelihood of them achieving them. With these useful pointers, you
will be able to set targets that your sales team will actually be able to achieve, ultimately encouraging
their development, empowering their efforts and boosting your company’s sales.

1) It’s not all about the results

Although achieving results are the ultimate goal, it’s the behaviour and activities that your team
undertakes that show whether they will be successful or not. You need to be able to understand the
process your team goes through to achieve sales, in order to be able to set acceptable goals. For
example, maybe some of your team’s targets should be about the journey and not the end goal. You
could measure in terms of new leads or momentous steps towards sales, rather than just looking at pure
sales figures. For many companies, making a sale can take months and even years, so the work needs to
be recognized every step of the way and not just when the awarding contract is signed.

2) Goals need to be personalized

Every member of your sales team is unique, so the targets need to reflect that. For example, you may
have one team member that goes for quality over quantity, and another team member who just focuses
on selling, selling, selling, without thinking about the quality. It would be impossible to judge these two
people on the same level. Goals should be set based on each employee’s current performance, on their
behaviour and on their activities, to ensure that every person knows that they can be recognized for
their work without having to conform to a certain style of working.

3) Analyse and adjust targets

Sales targets should not be set in stone. In order to ensure you are putting in place sales targets that can
be achieved by your team, you need to constantly measure, analyse and adjust them on a regular basis.
Business models change, as does the market, so the targets need to reflect these.

4) Involve your employees in the process

When it’s time to reevaluate or set new targets, it’s important that you get the team involved in the
process. They will be able to give you valuable feedback on what they believe is achievable and what
they think needs to be focused on.

Whatever your business, setting achievable sales targets is key to maintaining a healthy workflow and
happy workforce. When targets are too restricted or seem impossible, employees will not only become
demotivated but will also start to resent the company they work for. Use these pointers next time you
set your sales goals and see how your team improves.

For example, if a team has sold 200 units of their product in the previous quarter, a manager may set a
sales target of 250 units sold for the next quarter in order to encourage growth and account for
improved selling processes.
LO2 Determining factors affecting attainment of sales
targets.
1. The Quality of Product

The quality of your product or service does matter. Your best salespeople may be able to talk prospects
into buying what your company has to offer the first time. But if the product is of low quality, it would
be difficult to convince them to become repeat clients.

It’s also worth noting that negative reviews usually influence 86% of buying decisions. So, it may not
matter how good your salespeople are. Neither would it matter what kind of best practices you
implement to improve your sales performance.

The product quality, as well as your customers’ perceptions of it, could be affecting your sales volume.
Any feedback from your salespeople indicating this should be passed onto other relevant departments.
These may include the marketing, engineering, and product quality assurance departments.

2. The Pricing of Your Product

Are you aware that 58% of buyers want to discuss the pricing on the first call? So, what would happen if
your product price is considered expensive?

Research shows that 35% of salespeople consider overcoming objections to price as one of their biggest
challenges. Pricing may not be something that you may have any control over. But pricing is an essential
factor when selling. So, you may want to talk to your seniors to determine whether something can be
done to reduce prices. Could your salespeople offer discounts for large volumes? Should the base price
be reduced altogether?

How much your product costs will determine the volume of sales your company makes. It’s, therefore,
essential for you to address that issue. It may be the thing that prevents your sales team from
performing well.

3. The Customer Care Service

By the time prospects get into contact with your sales team, it’s quite likely they have already been in
touch with other departments within your company. They may have already contacted your marketing
department or your customer care representatives.

The lifetime value of customers that have been referred to your company is 16%-25% higher than that
of non-referred customers. There is just one problem: customers are likely to refer others to your
company if they have had a positive experience. And that positive experience is determined by the
organization’s customer care representatives.

Salespeople tend to get training that equips them to sell. They may try to do what they can to make
existing customers happy. But that is a specialized skill set they may lack.

If your sales reps report that many prospects complain about their issues not addressed adequately, you
have a customer care service problem. That means you must reach out to your customer experience
colleagues and request them to deal with the issue. Otherwise, you will continue to miss many sales
opportunities among existing customers and thus fail to hit your sales quotas.

4. The Quality of Salespeople

What kind of people do you have working in your sales team? Are they passionate about what they do
for a living? Do they know what they should be doing to improve sales and revenues?

Soft skills are some of the most underrated skills there are. Many people don’t think that skills such as
time management, communication, problem-solving matter. But they do. Studies show that 60% of
salespeople who work on their soft skills will hit their sales targets compared to 53% of those who don’t.

But there are other challenges as well. About 46% of salespeople did not even intend to go into sales as
a career. Many sales reps may not even have a passion for their jobs. And 68% of them already have one
foot out the door because they are determined to look for another position within the year. They are
not happy with their job situation at the moment.

A bad hire is not something that you can always wish away. The skillset of your salespeople matters.
Some people don’t have it to be empathetic, time conscious, problem solvers, etc. And if someone lacks
passion for the job, then you can’t force them to display it when working.

If your sales department is not performing well, it may be time for new hires. That may mean
coordinating with the human resource department to make it happen because it’s their responsibility.
The choices they make in this regard will determine whether your sales team performs better in the
future.

5. The Budget for Sales Activities

You need to spend money to make money. Activities such as prospecting, qualifying leads, meeting
prospects, driving to see prospects, making presentations, training, etc., require money to happen.

But what if the company you work for is underfunded? Or what if your organization does not provide
enough financing for sales activities?
Research shows that around 20% of sales teams don’t have enough resources to reinforce their sales
processes. Yet, companies with dedicated sales enablement have a higher win rate of 52.1% than those
who don’t (45.5%).

So, if your sales department is underfunded, you need to talk to your bosses. Show them the need to
have a bigger budget for sales processes. Because if your sales team doesn’t get the funding it needs,
your overall performance will continue to be dismal. You cannot expect every salesperson to produce
great results when they are so ill-equipped for their jobs.

6. The Lack of Enough Employees

For your sales team to have a good performance, they must spend time selling your company’s
products. But this is not the case for many salespeople.

81.6% of top performers usually spend at least four hours on sales-related activities. But most sales reps
only spend 34% of their time on selling. The rest of their working time is spent on writing emails, data
entry, attending meetings, etc.

While some of these activities are relevant to the sales process, they distract your salespeople from
their core job, which is to sell. If your sales team is always doing many tasks that prevent them from
selling, it could indicate that your company does not have enough employees. And that is something
that your sales department may not have any control over.

You could try to improve your salespeople selling time by fighting for more staff to be added. If your
company is operating on a tight budget, you could ask for freelance help, which is cheaper.

7. The Lack of Collaboration across Departments

Selling requires collaboration. It’s not just members of your sales team that should work together. Your
department must also communicate with other departments to achieve company quotas.

Here are some facts to ponder on:

Did you know that 44% of decision-makers consider the company’s website as the marketing asset that
influences them most when making a purchasing decision?

Despite 85% of the marketing departments saying that supporting sales is their priority, 56% of
salespeople must prepare their materials.

Top salespeople believe social selling tools, CRMs, sales intelligence tools, productivity apps, email
tracking tools, etc., are essential to their success.

Collaboration across multiple departments is necessary for sales teams to succeed. But not every
company has a collaborative work environment.

Some organizations have departments that are too autonomous. As a result, they fail to share
information and work together to improve their bottom line.
If this is the case, improving your sales team’s performance will continue to be an uphill battle. It doesn’t
matter how streamlined your department’s operations are. Neither does it matter how good your sales
process is. The entire company culture would first need to change.

8. The Market Forces

Sometimes, your sales performance will be subject to market forces. The economic forces of supply and
demand sometimes have nothing to do with government or company policy. They tend to be external.

Unfortunately, life is unpredictable. Covid-19 pandemic is an excellent example of just how

unpredictable life can be.

The pandemic has had a catastrophic effect on working hours and earnings. It has disrupted supply
chains at a global level. Its impact has affected the market forces and prospects’ ability to buy.

The average company tends to have strategy horizons of four years or less. And only 6% of companies
have horizon strategies of six years or more. There is so much that a company can foresee and safeguard
itself against. It’s impossible to know everything that will happen in the future.

If your sales team is currently performing dismally, it could be due to the Covid-19 pandemic. The
market forces could be against you.

Not every sales performance issue is within your department’s control. Some situations are caused by
the company policies that are within other people’s power. And others are caused by external issues
that your company cannot safeguard itself against.

It pays to understand the factors that affect your sales team’s performance so that you know what to
do. You may be forced to communicate with other departments within your organization to remove the
barriers. But sometimes, you will have no choice but to think outside of the box. Preparation is the key
to business survival.
 Lo3 Attaining sales targets

What is a sales target?

A sales target is a specific goal or objective set by a company or individual for the amount of products or
services they aim to sell within a given time period. Sales targets are often used to track performance
and motivate sales teams. Targets can be set by revenue, units sold, or customer acquisition and are
adjusted based on market conditions. Achieving sales targets is critical for a company's success and can
impact revenue, profitability, and market share. Sales targets can also be used to evaluate performance
and incentivize sales personnel.

One of the keys of setting a sales target is ensuring it’s visible to the entire team. Designing an effective
sales target visual can have a huge impact. For example, a bullet chart captures current performance,
past performance, and target in a single visual. Once trained on using this visual, your team will be able
to instantly tell how sales are performing.

Sales Target Attainment Formula

(Sales for the current period/Sales target)x100

Who uses sales targets?

Executives, Sales Directors, Sales Managers, Sales Reps

Key terms

Wins: The number of new customers over a certain time period.

Revenue: Income received through sales activities.

Key indicators for sales targets

Surpassing a sales target or the previous period's value.

Revenue: Income received through sales activities.

How to calculate Sales Targets

The Harvard Business Review writes, “When 10%–20% of salespeople miss goals, the problem might be
the salespeople. But when most salespeople miss, the problem is their goals.”

This highlights the importance of setting accurate yet challenging sales targets. It’s a delicate balance
that requires accounting for business goals, past performance, and the performance of your individual
sales reps. Setting sales targets and getting them right can have a massive impact on your team, and
motivate reps to dig deep to close more deals, increasing your sales efficiency.
You need to consider a number of factors in setting sales goals, and account for specific targets like
whether you’re going to increase new business, expand existing accounts, or work with past customers.
Beyond that, sales targets should influence the structure of incentives for the team such as our
commission and compensation model. For more information on setting sales goals, check out this in-
depth piece from Close.io.

How to monitor sales performance against targets

Achieving sales targets requires active monitoring of your performance throughout the day, week, and
month. Sales targets ought to be dynamic and focused on short term performance. The more individual
reps can see and understand how his or her work contributes to the target, the more motivated they
will be to achieve those targets.

One of the best ways to monitor sales performance against targets is to use a Sales Leaderboard and
displaying it on a television.

What are the key reasons to build a sales leaderboard?

Track individual sales performance in real-time

Track team sales performance in real-time

Directly compare performance across multiple sales metrics or KPIs

Use friendly competition to fuel motivation in the sales team

Create a transparent, data-driven work environment

Make quick decisions based on the data instead of waiting for end of quarter reports