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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.

Solution A

(Oh! So there is more than 1.)
Every week you set the target on 3 units per week, except on a 5 week month where you re-set the target to 2. This will average out at £50,000 per month assuming that not every week the sales team hits target on a 4 week month. This keeps the pressure on the team, deliver on performance and cuts "dead wood" very quickly.

Solution B

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.

Solution C

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.

OR

Solution D

Stop.
Just go for a daily target. How many existing client calls, how many client visits, how many cold calls, how many database marketing referrals (for business development opportunities).
The total number might well be 7 or 70+. Break it down to: the calls/visits/cold calls/database referrals into a simple target. Such as 4-1-1-1 to 5-5-40-20, each business has its own sales target.

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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