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Sales Technique Article - The Sales Target
Every business has a sales target. Annual, Monthly, Weekly or Daily. But setting a sales target is sometimes harder than you might expect.
I need 10 widgets sold every month!
OK, but to get there depends on 2 factors: how long is the sales cycle, and the product or service price.
So instead we should look at turnover versus profit.
If you set a sales target of £50,000 per month then you have a simpler target to reach. If each widget sells for £5,000 each; then you have a sales target of £12,500 per week (based on a 4 week month). Therefore a 5 week month target is £62,500. Simple? Well not quite, we now have a sales target based on 2.5 units per week. Except you can either sell 2 units or 3 every week, but not 2.5. or you just raise the bar to 3 units per week and be done with it. Not so easy otherwise you would be there already.
(Oh! So there is more than 1.)
Just set the target to 2 every week and pay extra commission every time the team beats or achieves the target. Keeps the team motivated & energised as they should reach minimum target easily.
Use last year's target as a minimum performance and raise it by 1 unit per month to reward the staff with extra bonuses on a month by month basis.
Keep the daily target (reduce this when a member of staff is on holiday) and let the rest work itself out.
Employ on performance, Pay on conversion.
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