Here is a very quick target setting system, that if implemented correctly,  is going to ensure that your salespeople are almost always on track to hit their targets.

The method is simple. Here is what needs to be determined.

What is target the salesperson want to hit this year?

What is the average deal size? – They can use their past statistics to determine the same,

What is the average conversion rate (For deals with ideal margins defined by the company). Again past statistics are used to figure out this number

How many prospects do you need to contact/meet each year to hit your target?

How many prospects is that in a week?

Ask them, are they hitting that number?

Here is a quick example to demonstrate how this method is used

Let’s assume your Sales Person’s target is 1 Million Dollars in One Year

Your average deal size is around $10000

Your average conversion rate for healthy deals is 5 percent. This means 5 deals close for every 100 prospects contacted. It also means to close one deal and get $10000 you need to contact 20 prospects.

To get 1 Million Dollars you need approximately 100 deals. ($10000 * 100 = 1 Million Dollars)

If it takes 20 qualified prospects to get one deal, how many prospects do you need to contact to get 100 Deals? It is 2000

Divide that number by 52 weeks. Thus you need to contact around 39 qualified prospects per week to get to a million dollars in one year.

So, are your salespeople hitting the required number each week? If yes, they are on track to approximately hitting the target. If not, they most likely will not!

Now I will suggest that you recommend to go one step further and double that number, In other words, your salesperson should try to contact 78 people per week in this case! Why you say? It’s because most people are not extremely disciplined and get distracted by something or the other and may not always  hit the required number.

However, if we aim to hit double the number every week, even if there are bad weeks or months, where enough people aren’t being contacted, the extremely high productivity weeks will care of the non productive weeks!

By applying this target setting system with the doubling the goal philosophy over the course of the year, the salesperson’s targets will not only be met, they will most probably be exceeded!

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