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Notes On Setting Targets For Your Salesteam

Working without targets, whether personally or for your team is a big blunder.

Salespeople are hired to sell, anything else is secondary.

Last month, I met an entrepreneur with a well recognizable brand. The challenge this entrepreneur was facing was that his sales were not increasing and his four salespeople were not bringing anything to the table.

To diagnose the problem, I asked the entrepreneur two questions.

The first question was centered around his commission model for his sales team, to my surprise, his salespeople were not being paid on commission. I wrote more about this in this article.

The second one was centered around the targets for his team. I learned that the salespeople had targets but the troubling thing was that they had set the targets on their own which is a big mistake.

To address these two challenges, we started working on a commission model that would work for his industry and his sales team. His company was in construction.

We first altered the salary structure to put in a basic salary that would cover basic expenses like travel, lunch, etc, and then put in a commission model based on performance.

What this meant for the salespeople was that while they would earn less in salary as compared to what they earned, they would get at least 4x their previous salary by just getting one or two new projects in a single month.

After putting in the commission model, we worked on the individual targets. This was a simple process considering the company sold a high ticket service. We agreed that the target for each salesperson would be $50 000(equivalent to one project) per month.

On a 4% commission rate, this meant that the salesperson would earn $2000 per project.

To motivate the salespeople further, we put in a 5% commission rate for anything above $50000.

This worked like magic because, in two weeks, 2 of his salespeople had left citing that the arrangement was unfair. This was good as we were left with the high performers who were hungry and would drive results for the company.

When one of the 2 salespeople who remained said that he now has the opportunity to earn more money than the CEO, I knew we had a winner.

PS. Let me also highlight that we have replacement vacancies open for this client. If you are a high-performing salesperson, visit www.jobcenter.co.zw to apply.

I highlighted the above story to give you an insight into why you should put in commission and set targets for your team; You have to reward performance, not presence.

If your business is in a different industry, the method is the same.

Look at the revenue you want to attain. If you want to make say $40 000 in a month and you have 4 salespeople then the target for each person should be $20 000 minimum.

Why $20 000 instead of $10 000. Because if you set your target at $10 000, it’s either your salespeople will meet the target easily and relax or they will put effort targeting only $10 000 which will increase their chances of not reaching the $10 000.

When you put the target at $20 000, push them to attain $20 000. If you do it right, even if they fail to meet the $20K, they will at least pass the $10K.

To conclude, in addition to setting targets, you have to resource your team. Give them work phones, give them airtime, give them internet and computers, give them transportation. Give them everything they need so that they don’t find justifications and reasons as to why they failed to attain their targets.

And should one fail to consistently meet at least 50% of their target for 3 months in a row, you have to replace them; Don’t compromise.


PS. I am having a sales class. You can find out more about it here.

This Post Has One Comment

  1. This is the right website for anyone who hopes to find out about this topic. You understand a whole lot its almost hard to argue with you (not that I really will need toÖHaHa). You definitely put a fresh spin on a subject thats been written about for years. Wonderful stuff, just great!

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