SMART Goal Example for Achieving a Sales Quota

by ryan on December 14, 2017




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SMART Goal Example for Achieving a Sales Quota

In this post we will go through the process of defining a SMART Goal for achieving a sales quota.

It uses the method described on my  SMART GOALS BLOG, How to Define SMART Goals.

I’ll give a little background on the sales process to set context, but please understand that this is intended to be an example of setting a SMART Goal, not a definitive resource on the sales process.

Sales Process

The basic sales process is shown in the diagram below. The process starts with the “Funnel”.

At this stage, new potential customers—sales leads— are identified and qualified to determine if they are serious buyers. The Funnel delivers Prospects—prospective customers—into the sales “Pipeline”.

Pipeline stage, the sales person works to understand the prospect’s needs and proposes solutions that will fulfill those needs. If they come to an agreement, the prospect is “converted” to a customer as represented in the Conversion step.

career-smart-goal-setting-worksheet

The initial sale can be followed by additional needs for products and services the customer has. Common examples are service contracts, repeat business, and up-selling or cross-selling. It is reasonably assumed that the established customer base is the most valuable source of prospects for future sales.

The salesperson’s objective is to sell products and services, and his or her income is often earned by commission as a percentage of sales. So, let’s create a SMART Goal for achieving the desired income. If you need a primer on SMART Goals, please see the post, SMART Goals Introduction (link).

SMART Goals Documents

This Documents page provides access to the document templates described in the book How to Define SMART Goals.  Registration to this website is required for access; however, there is no cost for registration. Registered users can also post comments to blog entries and provide feedback.

Each document sub-page contains a PDF document for download plus instructions on how to use it.

SMART Goals Documents

Goals List –This is the starting point for defining your goals.  List your goals and indicate their relative importance, level of difficulty and target dates.

SMART Goals Worksheet – This document provides a template to write your detailed SMART Goals.  Instructions are provided to fill it out with all the SMART Goals criteria to define your goal and plan the steps to achieve it.

Specific

When defining the goal, you want be very specific about what you want to achieve. Put your goal in “end-state” terms–think of how you will express having accomplished the goal once you have achieved it.

Example of specific:

On 12/23/2017 (in 12 months) I’ll have sold $2,000,000 of product to new and existing customers. My quarterly sales target is $500K.

Metrics

Metrics are used to define how much you want to accomplish and how you will measure your progress. We have already started defining our metrics in the goal statement, above.

gym-smart-goal-setting-worksheet

Assumptions (adjust these to your specific scenario):

At $100K per sale, I need 20 sales total, 5 per quarter, to reach my $2M revenue target.
At a 1 to 3 qualified close rate, I need 60 qualified prospects,
15 per quarter or 5 per month.
At a 1 to 5 leads to qualify rate, I need 300 leads, 75 per quarter, 25 per month.

Example metrics:

Track the number of leads with a target of 25 new leads per month,
strive to qualify each new lead within 1 week.
Track the number of prospects with a target of 5 new prospects per month,
strive to close each prospect within 3 weeks.
Track the number of sales with a target of 5 per quarter.
Track the cumulative sales with a target of $500K per quarter.
Attainable/Action Plan

Set attainable goals and document the actions that define how you plan to achieve your goal. Prioritize your actions so you are always working on the most important activities first.

For this example we’ll assume that the quota is attainable. Use your experience to judge if you are over- (or under-) reaching in your particular case.

Let’s setup a prioritized action plan that focuses your day to day effort on the those activities that are most likely to help you achieve your goal. Existing customers are already identified and qualified. If they are happy with the products and services your company provides, you will get repeat business as their needs grow. It makes sense that established customers are your first priority.

The next priority are those identified prospects that have been qualified as serious buyers. You want to spend time understanding their needs, offering thoughtful solutions and converting them to happy customers. Of course, you have to identify potential new leads in order to fill the pipeline, so you need to spend time identifying new business sources, too.

It has been proven that shared goals are more likely to be achieved—read the post Why Set Goals (link) to learn more about that. You will undoubtedly be sharing your goals—often called a forecast—with your management, but there might be others that you can share with, too. Work colleagues, existing customers, friends and family are probably interested and might have some ideas or information to help you out. Caveat: as you know, some sales information can be sensitive for competitive or other reasons, and in such cases you have to be cautious about how much you share.

Example action plan:

First priority: ensure existing customers are happy with products and services; stay in touch with them to understand and fulfill additional product/service needs as they arise.

Second priorities: work with prospects (Pipeline) to make sure they have the information they need, and minimize obstacles and delays in closing new business.

Third priority: generate and qualify new leads (Funnel) by advertising in industry journals, attending trade shows and trade group association functions, etc.

I will share my goals and action plan with my manager and update him/her monthly on my progress.

I will network with colleagues, friends, etc. as appropriate to learn more about prospective leads and customers.

Reward

The reward is why you want to achieve your goal. It is the sense of fulfillment and the benefit you will realize when you complete it. Consider a goal’s value relative to the opportunity costs of giving up what you might otherwise be doing.

Example rewards:

Create positive relationships with satisfied customers; furthermore, they will provide testimonials and refer me to new customers and be a source of additional sales.

That I earn a good living for myself and my family.
By achieving quota, I earn recognition and opportunities to advance in the company.

Time bound

A deadline is a big motivator. The target date defines when you will achieve your goal. A date grounds your goal in reality, and you can look forward to when you will receive the reward that it provides.

Example target date:

The target date is to achieve my goal is 12/23/2017. I also have intermediate goals each month and quarter for metrics I am using to track progress.

Obstacles & how to overcome them

It is helpful, often imperative, to anticipate the obstacles you might encounter and develop a thoughtful mitigation plan. You can often overcome obstacles by prioritizing, assessing, and planning.

Example Obstacles and how to mitigate:

Not enough qualified leads. Mitigate by engaging marketing to run appropriate advertising, help with trade show support, etc.

Tough competition. Mitigate by understanding customers’ needs and providing superior solutions that provide exceptional value. Help the customer communicate that value throughout his/her organization.

Prospect Distrust – Mitigate by: 1) providing customer testimonials ; 2) taking steps to remove the customer’s risk of loss. For instance, offer a trial period or money back guarantee.

SMART Goal worksheet for achieving a sales quota

Here is a completed SMART Goal worksheet for our sales quota example. A blank SMART Goals worksheet (link) is available for you to download and use.

smart-goals-template-doc

smart-goals-template-doc




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