The year is new, the books are fresh, and the revenue is yours for the taking! All that’s left to do is set your business’ sights on success. And no matter your industry now is the perfect time to get yourself on track with SMART sales goals.
Although enthusiasm for intelligent sales goals is always appreciated, in this case, SMART is a mnemonic device to help you set and own your most important objectives this year. Here’s are the five things you want to pay attention to when setting your goals.
S - Specific
M - Measurable
A - Attainable (or Actionable)
R - Relevant
T - Time-Based
If this seems pretty nitty-gritty, don’t worry. We’re going to break down why each of these criteria matters, what they mean, and what specific action step you can take to make it work for you. In the end, you’ll be primed to blow your 2019 sales goals out of the water!
1. Specific: Do the math to set exact KPI goals.
It’s just like with New Year's resolutions: if your goal is to “go to the gym more,” you are significantly more likely to fail than if you resolve to “go to the gym during my lunch break at work three times a week.”
There’s a lot of psychology behind why setting specific goals is more beneficial for you (and your team) than setting open-ended ones. But one of the most important “pros” is that to set specific goals, you need to sit down and take an inventory of your current status and determine an optimal end-point.
In sales, this means you’re going to want to have goals that relate to specific KPI, like revenue, total sales, deals closed percentage, etc. To figure out what KPI are most important to you and your business, you can check out this other article on our blog called Sales KPI: The Most Important Metrics and How to Measure Them. But, for your convenience, here’s the SparkNotes version:
The Sales KPI of Closing:
- Lead Response Time
- Opportunity Win Rate (or Sales Closing Ratio)
The Sales KPI of Making More Money:
- Average Purchase Value (or Average Order Value)
- Customer Lifetime Value
- Customer Acquisition Cost
Unless you are a brand-new company, setting these goals will involve using data analytics and sales analytics to evaluate last year’s performance and build upon it in a meaningful and realistic way.
So, crunch the numbers and decide which specific KPI are integral to your business’ success.
- Decide what KPI are most important to your business.
- Set a specific target for that KPI.
2. Measurable: Create systems to monitor and share your progress.
We just discussed the importance of setting goals based on the KPI most relevant to your business. Well, here’s where that pays off: goal tracking.
You may feel crystal-clear right now on what exactly your team wants to achieve in 2019. But come July when things really start heating up, it’s easy to slip into a routine of just handling the day-to-day stresses of sales and lose sight of the big goals. That’s why it’s absolutely essential to create systems now that allow you to monitor, track, and share your progress with your team.
Will one of your team members be responsible for sending out a weekly status update on your sales numbers? Is each sales representative responsible for tracking their own success rate in-between check-ins? You know your team better than anyone and figuring out the proper amount of oversight required for success is key.
Automating as many data analytics as possible with a CRM can be extremely helpful. For example, if your specific goal to shift your Sales Closing Ratio from 1:7 to 1:5, a CRM can help your sales team to monitor their own deals month to month.
It’s important to note that measuring the end result alone is not enough--getting data points along the way is also key.
Especially when it comes to sales, being able to see what led to success is extremely valuable. To close more deals, it’s helpful to be able to see what happens in each stage of our customer’s journey. Are many customers dropping off at some point? Do you have one customer segment that’s significantly out-performing another? Data is your friend. Track it and use it.
- Decide how you will monitor and share data. Will team members be mostly expected to track their own numbers in a CRM? Will you disperse team data via email or another communication tool like Slack?
- Get the system up and running, and ensure your team knows how to use it.
3. Achievable / Actionable: Get your entire team on board.
Are your sales goals for 2019 even achievable? What action steps do you need to take now (and later) in order to hit them? This is an essential question to ask yourself at the beginning of a new year.
As great as it would be to become a Fortune 100 company this year, if you aren’t in the top 500, that goal probably isn’t best for you right now.
Make sure you know the exact action steps everybody on your team must take . . . and (this is important) ensure your entire team is on board and understands their role.
More than just being pragmatic, making sure you’re utilizing your team to its maximum efficiency is crucial for keeping morale up. Everybody likes to feel like what they’re doing is important--so, take the time to show them why their specific piece of the puzzle matters in the big picture.
One way you can achieve this is through something called Opportunity Visualization. Basically, if you can create visual representations of data to show your team (like maps), it can help get everybody on the same page, increase excitement, and set accountability. Here is an example of how you may help your sales team visualize opportunities within a set territory by translating data into a map.
If your team can look at something like this instead of a spreadsheet full of numbers, it will be much easier to keep them motivated and even encourage them to set their own personal goals higher.
- Sit down with your team members (or team managers) to discuss your 2019 sales goals.
- Set action steps so each team and representative can contribute meaningfully to the goal.
4. Relevant: Learn more about your audience.
While usually, your sales instincts can be pretty trustworthy, it’s always important to check back in with your audience and double-check your assumptions.
One of the most interesting examples of how customer research turned a company around is the urban legend of Betty Crocker’s instant cake mixes.
The story goes that, in the 1940s, instant cake mix sales were down and Betty Crocker executives didn’t know why. After conducting some customer research, they learned that housewives felt “guitly” for cheating with such an easy bake--all they had to do was add water to the mix. So, a marketing genius decided to take out the powdered eggs and require housewives to add their own fresh ones. And voila! The cake felt homemade again and sales went through the roof.
While there’s some debate as to whether this scenario actually played out this simply in real-life, the lesson still stands: it’s not about what you think your audience wants. It’s about what they actually want and how they actually feel about whatever you’re offering them.
That’s why, as you set your 2019 sales goals and put plans in place to achieve them, it’s important to check back in with your audience and their wants and needs. This can be done by creating a fresh customer avatar.
Source: Digital Marketer
If you have an email list, collecting the data can be done with a simple survey. But if you’re a newer company, there are other innovative ways to get the information as well, like Reddit and psychology.
Once you’ve built out your avatar, compare your team’s internal goals with your customers’ desires, wants, and needs. For example, you may think that the best way to increase the average order value is by getting customers to buy more premium versions of the products they already buy when, in reality, they’re more interested in diversification.
- Survey your email list (or collect information) to create a new, updated Customer Avatar.
- Ensure your goals align with your Customer Avatar’s wants.
5. Time-Bound: Schedule manageable milestones.
Good ol’ Parkinson’s Law.
“Work expands to fill the time available for its completion.”
So, in other words, if you give yourself an unlimited amount of time to accomplish something, you’ll never get it done.
Setting goals without establishing set deadlines is counterproductive. While goals are designed to keep you and your team focused and plowing ahead towards a common objective, leaving out the deadline completely strips your goals of their urgency and importance.
Since we’re talking about your 2019 sales goals, it’s pretty fair to assume that many of your goals should be achieved “by 2020.” That’s fair enough. But what would make these goals even stronger (and SMARTer) is if you created accompanying milestones (or important mini-goals) along the way.
As many of us learned from grade school procrastination, focusing only on the end goal will usually come back to bite you. Overall, you are much better off holding yourself (and your team) accountable to a handful of more achievable mini-goals.
Say, for example, your goal is to increase the average order size from $2,000 to $3,000 by 2020. You could set quarterly goals to keep you and your team on track:
- Q1: $2,250
- Q2: $2,500
- Q3: $2,750
- Q4: $3,000
Of course, this example works itself out pretty simply--but if you chose measurable KPI, it should be fairly easy to create milestones of your own as well.
When you set milestones, you increase team morale by making those big goals feel more achievable. While there are many SaaS out there to help you track goals, a CRM and/or accounting software alongside basic calendar alerts should do the trick just fine.
The flip-side of this, too, is that if you realize your team isn’t hitting the milestones, you can do a recalibration before it’s too late.
- Work with team members and managers to set realistic partial goals.
- Schedule times to check in during the interim.
If you’re ready to take your business to the next level in 2019, thoughtful planning will get you far. No matter what industry you’re in, setting SMART goals and taking action steps to implement them into your day-to-day is absolutely key.
Let us know: what are your SMART goals for 2019? What action steps are you taking to make them happen? We’d love to hear from you! Comment below.