Sales goals: 11 tips and examples for 2022
What's the golden ticket to B2B sales success?
First off, here's what it's not:
Having just one goal, like meeting quota.
That's not how the best sales teams close.
Here's what they do:
They do the sales maths and set goals - lots of them!
Because setting goals makes it easier for sales development representatives to build confidence, boost motivation and improve performance.
In this article, Cognism’s Brand Ambassador Ryan Reisert is going to dive into sales goals and how to set them.
Sales leaders, keep scrolling 👇.
How to set realistic sales goals
There’s only one rule when it comes to setting goals for your sales team, and it is:
Have one main revenue goal, supported by smaller goals that help you to reach your target.
Just keep in mind that every business is different and what works for one might not work for another.
Here’s how we do it at Cognism:
Then, we set out mini-goals to help us achieve this target (scroll down to the next section for more info).
We throw in incentives to motivate our sales team. And of course, we track metrics and monitor progress.
If we notice a drop, we focus on finding the underlying cause and then solving it.
Sam Schooley, SDR Manager at Postclick, Molly Grossman, Manager of Sales Development at Outreach and Patrick Connolly, Head of US Sales Development at Cognism talk more about setting sales goals here 👇.
11 tips & examples for sales goal success
Deciding on a revenue goal isn’t just about picking a number and working towards it.
It involves maths. You need to know your sales data to set realistic expectations. Ryan says:
“You should always use data to set realistic expectations on what's possible for your goals. Most organisations don't do this very well. They put their thumb in the air, or they have a VC of a model that's worked, and they are just replicating it.”
So, your goals should all be based on one integral question:
What do we need our annual revenue to be?
“If you need to produce a million dollars in revenue and your average deal value is $50k, then you need 20 deals. From there, you need to keep reversing it and discovering what your close rate is. It’s all down to the math of sales.”
If you don’t have this data on hand, you’ll need to look back historically. Ryan adds:
“If you have deals and you typically close at 10%, then you're going to need 200 opportunities. And if it takes so many meetings to get an opportunity (say you only move 50%, you'll need 400 meetings) so reverse that using math and conversion ratios.”
“In order for you to hit a specific target this goes back to the concept of control - you can do more, find more or increase the value of deals. For example, instead of $50k deals, you aim to get $100k deals or choose to streamline your funnel.”
Ryan explains more about the maths of sales in this video 👇
1. Monthly sales
Meeting a revenue target is the number one goal of any successful B2B sales team.
But it's overwhelming when you look at your annual goal as one big number.
What you should do is this:
Break the yearly goal down into monthly sales targets. They can be for individuals or the entire team. Only increase the targets once they’ve been reached.
“Understand your sales math and get a good idea of what your CAC is. Then you can give each salesperson a realistic revenue target based on how many deals they can actually bring in on a monthly, quarterly, annual basis.”
Just don’t forget to emphasise that their monthly sales revenue target should be prioritised over other goals.
Monthly sales goal example:
Increasing your month on month revenue by 10%.
2. Sales cycle
The average length of a sales cycle depends on your industry and the size of the deals you’re looking to bring in.
For instance, the average sales cycle for a SaaS deal with an annual contract value of $25,000 should close on average within 90 days. Ryan says:
“Most companies say that their average sales cycle is 90 days, but you really need to work it out correctly because it will help you with your overall goal. It might not be 90 days; it could be 127 days.”
Shortening the sales cycle is a goal that most companies aim for.
One way to do this is to set up a sales funnel that’s better suited to your target audience. This helps to make the sales process smoother and faster.
Sales cycle goal example:
To reduce the cycle time of mid-market leads by 5%.
3. Lead generation
Every sales team needs a quality pipeline to achieve its lead generation goals.
Quantity is also an issue - you need to keep it filled!
Especially at the very beginning of your sales funnel because the more targeted leads you can qualify, the more deals you can close. Ryan says:
“Your sales funnel is your opportunity pipeline, and that's where most people fail. They think they want a wide funnel filled with deals so that they look busy. But that’s a bad thing.”
“It's not about having a wide funnel. Sure, there must be a good top of funnel start if leads meet your criteria, but it should thin out as you qualify leads. Think of your funnel like a nail. It's about quantity at the very top and then thins out with quality leads all the way through to the bottom.”
Lead generation goal example:
Increase sales qualified leads by 16% each month.
4. Win rates
Working towards a specific win rate isn’t only great for determining which of your strategies are working - it’s also great for your bottom line.
Keep in mind that not every sales rep will have the same win rate. Some wins might be bigger than others due to factors outside your control.
With this in mind, are win rates still good sales goals to have?
They keep your reps focused on their overall goal and can help you improve your sales funnel. From Ryan:
“From a quota perspective, you’ve got to make sure you’re creating numbers that, one, make your company hit target and, two, is actually attainable. So if you run that math and you realise you need a rep to do so many deals, you need to look at if it's really possible.”
“If a rep is having more than three to four real sales meetings a day to get to the amount of opportunities or wins they need on a monthly basis, that’s 80 to 100 meetings a month. That's going to max them out, especially if there are 30 calls. That's a lot of work. There's pre-prep and research, and most reps can't handle that unless it's very transactional. That's why 50% of reps miss quota. It's literally not attainable.”
Win rates goal example:
Increase monthly win rates by 5%.
5. Profit margins
Your revenue target needs to work with your profit margins.
For instance, in one month you might be hitting your revenue target, but if your team gave too many discounts the month before, your profit margins will need a boost.
Double-check that your pricing is fair by reviewing benchmark pricing against your competitors.
And put a cap on the number of discounts your team is allowed to give out.
Profit margin goal example:
Increase annual profit margins by 10%.
6. Customer acquisition cost
You’ll definitely want to know how much it costs your company to bring new customers on board.
And the lower the number, the better.
“In SaaS, there’s an age-old equation - your CAC needs to be less than three times the lifetime value of your customer.”
This is because SaaS is often subscription-based, so it’s going to take a while to see those results.
Your CAC usually consists of:
- Salary and comm. of reps.
- Outreach expenses across teams.
- Call costs.
- Technology costs.
The best thing to do is get a Revenue Operations Manager to work out what’s costing you the most. They’ll help streamline your processes and get your CAC down.
Customer acquisition cost goal example:
Lower customer acquisition cost by 9%.
7. Churn rate
Churn rate refers to the rate at which customers end their relationship with a company.
Understandably, you don’t want a high churn rate. Reducing churn must be a key sales goal within your sales strategy. Ryan says:
“If your churn is super-high, you're going to have to keep stacking more and more, and that's never healthy.”
There are a number of different types of churn to look out for:
- Delinquent churn where a buyer's card expires without them noticing.
- Account churn where a buyer doesn't feel your product is the right fit for their needs.
- User churn where your product isn't working the way it should, so your buyers stop using it.
Avoid churn in the first place by prospecting to leads that are the right fit for your product/service. It’s also important to maintain customer relationships, even after they’ve signed the deal.
Churn rate goal example:
Reduce quarterly customer churn to 3%.
8. Customer retention
Retaining a customer is gold for any business.
- Improved lifetime value (LTV).
- Decreased CAC.
- Bigger budget.
- Quality leads.
“Retention is a big part of a company's revenue goals.That's why SaaS is so nice because over time your retention builds up your LTV. The longer your client is around, the higher that LTV is. Meaning, you can pay more to get them in the first place, you can use more expensive channels to reach people, and there's more quality there.”
“For example, using SDRs, cold calling and email, you're going to generally generate much better opportunities by doing that type of outbound versus paid ads. The quality of the call is going to be much better than a paid ad. The chance of reaching a CEO with an ad versus a phone call is that you're much more likely to get them on the phone than to respond to a social ad.”
If you want to make customer retention part of your sales goals, then how you treat your customers matter.
Make sure your reps are communicating, sharing valuable resources and dealing with issues and complaints as soon as they happen.
Customer retention goal example:
Improve customer retention by 15% by the end of the year.
9. Cross-sell and upsell
The great thing about keeping your customers happy is that it leads to more opportunities like upselling. Ryan explains:
“When you have clients who love you, you open up opportunities for referrals, upsells and cross-sells, and that's gold. It helps sales costs go down and improves your conversion rate as these leads are always great quality.”
To achieve this goal, your team will want to have a look at the intent data of your current customers. From your CRM, you should be able to track if they’ve investigated a new feature on your website. Then it’s as easy as reaching out to them with your pitch.
Cross-sell and upsell goal example:
Increase monthly upsells and cross-sells by 5%.
10. Customer lifetime value
Your Customer Lifetime Value or CLV means the revenue generated from a customer over a set period of time.
You want your CLV to be high, which is why you'll need to invest in giving your customers more value over time.
This means updating and improving your product, avoiding the need to offer too many discounts to keep customers on board.
It also means less pressure on net new business because you know they’ll be around for a while.
Customer lifetime value goal example:
Increase CLV by 10% year on year.
11. Track sales time per week
A simple but effective sales goal.
If your reps are taking too long on calls, or putting too much effort into prep with no meetings booked, then you have a problem.
Knowing this issue means you can implement new training and refocus your reps on more valuable sales tasks.
Time tracking goal example:
Increase meetings booked by time to 50%.
There you have it. 11 strategic sales goal examples to skyrocket your strategy.
Ryan’s key takeaway:
“If you want to really hit your number and achieve your revenue goals, then you need to do the math.”
Never miss a target with Cognism
Cognism has assisted countless B2B companies to hit their sales goals:
- A sales enablement firm achieved £410k ROI in one year.
- An award-winning creative agency generated £500k worth of new opportunities.
- A growing software company increased their pipeline to $125k.
Click 👇 to book a demo and make missing targets a thing of the past.