Setting sales goals properly may seem simple, but it is a subject of debate in almost all businesses.
It is not a mathematical, Cartesian, or scientific exercise. It’s a job that relies in part on intangibles, and that’s why it intimidates many business leaders.
Many sales decision-makers ask themselves this simple-looking yet complex question: “How do I set sales goals that are both ambitious and realistic?”
Discover through this article the keys to increasing the sales of a company. To set achievable and motivating sales goals, you need to understand a few things, which we will discuss:
- Who sets sales goals?
- How to set sales goals with eCommerce KPIs
- How to make sure the goals are met.
Before we cover the 3 necessary elements, let’s look at why sales goals are not being met.
Why Are Sales Goals Not Being Met?
The main problem is who should do it: sales managers or sales representatives. The managers make decisions that are not always compatible with reality, while the online sales representatives make decisions that lighten their workload.
Indeed, the objectives set by the sales force may turn out to be too low and not generate the growth targeted by the company. Those set by the manager would be on the other hand too high. Although attainable in theory, they will not materialize.
Sales objectives that are set too high lead to a feeling of failure when they are not reached. Moreover, they will often be revised downwards during the year to align with the results of the first semester.
This is the same phenomenon as when governments or economic agencies announce, during the year, that the real growth rate is lower than expected.
1. Who Sets the Sales Goals?
There are two schools of thought on setting prices:
First, managers make top-down decisions. This technique excludes the salesperson from the decision-making process, so they never really buy into the target.
Even a good salesperson will not be as committed to an unattainable goal. They will be less committed.
The second school of thought encourages representatives to create their own goals and communicate them to their managers.
The salesperson sets low standards to avoid challenging himself. He will not put himself in a position where he will have to work extremely hard to achieve his goals.
A combination of these two approaches avoid their drawbacks. Involving decision-makers and reps in creating goals balances them.
2. How to Set Sales Objectives
Relying on data to help set sales goals is not done by using a mathematical formula, but by trusting KPIs. This data can guide decision-making by revealing what has already been accomplished by the team.
eCommerce’s key performance indicators (KPIs) provide useful information for assessing the success or failure of various business initiatives. Here’s an illustration:
- The percentage of site visitors that start shopping but then abandon their carts is known as the Cart Abandonment Rate (CAR). This can be useful for identifying issues at checkout and gaining insight into what may be affecting sales.
- What are the stated annual earnings and sales?
- What are the month-by-month, quarterly, and annual sales projections?
- If you sell multiple products that customers may want to buy regularly, the percentage of repeat buyers is a valuable indicator to track. You can utilize it to get data to help you make better marketing and sales decisions, and it can also serve as an objective depiction of consumer loyalty.
Analyzing this data helps calibrate expectations on both sides.
3. Establish compensation that supports the established goals
Everyone can’t receive the same amount of compensation. It is necessary to develop individualized sales quotas and back them up with a flexible reward structure.
This should be connected to the goals and become a source of incentive for online salesmen. It should function as a fuel that will push them to go beyond the bare minimum.
How to Reach Sales Goals?
To conclude, let’s summarize the points discussed in this text to finally increase the sales of an eCommerce business:
- Align the aims of the organization with the individual aspirations of the sales reps
- Communicate sales objectives
- Analyze relevant data using KPIs
Every sales manager’s dream is to have their team members hit their quotas time and time again. The reality is not quite as apparent. When confronted with results that fall short of expectations, leaders frequently become disoriented.
