Stuffy, chore, difficult, misguided - these might come to mind when you read the words ‘sales forecasting’ and ‘sales targets.’ Forecasts are made for finance, and your team barely hits their targets.
It doesn’t have to be that way. If you learn how, sales forecasting and targets can be weaponized to grow wallet share and boost rep sales performance.
Here’s how our CEO Jonathan Hubbard teaches sales leaders to use forecasting and targets to seriously boost sales results.
How to use smart sales forecasting and targets to smash sales goals.
Why smart sales forecasting and strong sales targets do matter
Forecasting and targets matter because they help sales reps find direction and visualise their end goal.
An outside sales rep’s job is to shift stock and grow revenue. Yes, they’re also building relationships and developing their skillset, but the key requirement is to deliver their revenue quota.
In 2023, having a forward looking mindset towards the sales goal is even more important as markets tighten.
Clear sales quotas and smart forecasting can be used to guide sales reps toward a forward-thinking mindset.
Here’s what smart forecasting looks like and how targets can be weaponised to produce results.
Better sales forecasting in 4 steps
Smart forecasting is actually really easy. All reps need are pen, paper, and 15mins.
- Write down current revenue/GP earnt, the target, time left, and any customers most likely to generate sales.
- Work out how much revenue/GP is needed to reach the target, then divide the number among those top customers based on potential sales.
- In a calendar, schedule actions which need to be taken with each customer to generate a sale within the deadline.
- Compare sales made each day against the revenue expected to be generated by each customer and start planning the next day's activities, making tweaks as needed.
Getting sales targets to actually motivate sales reps
A sales target or quota is a meaningless expectation until the figure is broken down to the customer level.
The mindset is to look at each customer and consider how much they’re likely to spend towards the target based on their spending history.
If a rep has a 300k target for March, how could it be broken down over their 200 customers? Who is going to contribute the most to the target? Who has the potential to contribute more to the target? What smart and thoughtful actions could be taken to secure that revenue?
Now the rep has set meaningful sales expectations for each customer which they can measure against: they have an attack plan!
In the first week of April, the rep can look back on customers’ performance for the $300k March target. If one customer didn’t live up to expectations, could the rep have done something to change the situation? As their manager, you can take this opportunity to ask questions and help the rep figure out what they could do next time.
- Smart sales forecasting and strong sales targets are imperative as without them, sales reps won’t have a clear goal, or direction.
- You can get your reps performing smart sales forecasting with these 4 steps: Write down current progress to target, divide the amount needed to catch up among top customers, mark out when action needs to be taken, and check progress made each day against the revenue goal.
- Sales targets are meaningless until broken down to the customer level and used to create a ground-up attack plan of where revenue is likely to come from.
Keen for more sales advice like you just read? Zip on over to our webinars page. We’ve got an event coming up this April you won’t want to miss. Click here to save a spot.