With most financial years re-setting on 1 January it is essential that you think about sales target setting prior to the end of this year. For anyone that has not planned out the targets as yet, there is still a window to apply a principle-based approach so that you can kick off the new year with everyone knowing what they are aiming for.
The key is that there is a sensible starting point and some form of validation process. If you start with a Top-down exercise (ie the long range plan of the business) then once you have divided that appropriately you need to validate with a bottom-up exercise to ensure that these targets are doable in the current market conditions. Conversely, if you start with a Bottom-up exercise, then you need to validate that process with a Top-down look at whether or not the consolidated targets would get you where you need to be as a business. Broadly though, you are looking at;
Who needs to be targeted?
What does the business need to achieve?
What opportunity is there in the marketplace?
Take a look at some of the basic sales targeting inputs
Some basic tenets of good target setting to consider;
Have centralised principles
the same basic approach for everyone
ensure that you have included the right people in the exercise so that you end up with sensible numbers that are aligned across the stakeholders. Further, ensuring that the actual targets are rolled out in a considered way and that the approach, and the targets themselves, are properly documented
the targets must be related to the opportunities in the market and supported by a marketing plan
Target what can be achieved
you can’t target everything, only target elements that an individual can control/influence
- People feeling imposed upon
- Targets generally do go up
- Getting in front of people
- Remaining ‘fair’
- It is top down and bottom up – getting it right depends on the LRP being right
- Unrealistic targets
- Unforseen political/regulatory conditions
- Ethical balance of other employees views – us and them
- Bring people along
- Communication is key
- Some people will feel disadvantaged whatever you do
- See ‘the whites of their eyes’
- Targeting is not an exact science
We said targeting is not an exact science! There is no one way that is right for each organisation but you can follow some basic principles to get the numbers right.