Sales targets and sales forecasts are two fundamental B2B sales tools. They show sales reps what they have to achieve in a given time, and give higher management an indicator of sales performance. But what else can targets and forecasts give to a sales team, those hard-working people on the ground?
In this article, we’re unpacking exactly how, when used together, sales targets and sales forecasts can drive a sales team’s performance.
The 3 ways sales targets and forecasts drive sales performance
Providing the fundamentals: clarity and direction
Two fundamental qualities which sales targets and forecasts provide to sales teams are clarity and direction. Clarity in that they know where they have to go, and direction in that they can formulate a plan to get there: it is these two qualities which focus a sales team and drive their performance.
Sales targets, when made easily accessible and personalized to the individual, show a sales rep precisely where they must go: there’s no room for excuses. Similarly, a well made sales forecast stops reps from losing their way on their journey to target, acting as a guide. Above all, these tools concentrate a rep’s focus and ground their routines around a central purpose, minimizing distraction and confusion.
“Targets and forecasts give reps peace of mind, as you know where your numbers are going to come from. You have a plan which you have confidence in.” - Jonathan Hubbard, Founder
Helps sales teams plan their way to success
While forecasting may be stigmatized as a thumb-sucking or wishful-thinking exercise, it can become a robust planning tool when built around sales targets.
Once a target has been set, reps can sit down and begin building up a forecast based on customer sales data: reviewing the numbers to ascertain where target-beating revenue could come from.
“Forecasts show your daily alignment to the target: giving you the view of the end point and how you might get there.” - Jonathan Hubbard, Founder
Continually adjusting these forecasts as the period progresses can help a rep stick to their initial plan, or make preemptive direction changes where needed. These direction changes are best made using live-updating forecasts which can show reps the precise moment their performance starts slipping. However, if you’ve got plenty of spare time, a well maintained spreadsheet can give enough notice to turn their game around before the period ends.
Using targets and forecasts to set a pace and dangle carrots
Undoubtedly, sales targets and forecasts are classic rep motivators: they keep a sales team’s eyes focused on their core mission and their future rewards. Although, if taken a few steps further, these simple tools can give a great boost to rep motivation.
If you’re able to visualize a rep’s progress towards target alongside their forecasted revenue, you can produce a paceline. Built on forecasts, targets and past performance, pacelines act similarly to the record lines projected onto swimming pools during swimming races which represent a standing record or time to beat. However, unlike the swimmers, the sales team can see their paceline, and has the power to influence it whenever they like: motivating them into action.
“Forecast acts as your GPS, keeps you motivated, and on track to the total number: the target.” - Jonathan Hubbard, Founder
Furthermore, if you can show reps how much they’re likely to earn, the target and forecast take on new meaning. Tying commissions and incentives to sales targets is nothing new, but when tied to live forecasts, you can give sales teams the ability to see their potential earnings as they adjust their forecasts.
Your summary and 3 key takeaways:
Driving your sales team using sales targets and forecasts can give them much needed clarity, direction, control, and motivation. Additionally, they can save you time: if everyone knows where they’re going, they won’t need reminding! Let’s go over our 3 main takeaways:
- Targets and forecasts give sales reps clarity and direction, helping them stay on task and on track to achieving their goals.
- Instead of a wishful-thinking exercise, sales forecasts can become useful planning tools when they’re built out around targets: outlining how much revenue will come from where.
- Targets and forecasts keep sales teams motivated by setting a pace and highlighting their rewards.
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