4 types of Sales Objectives for a better business plan
- July 27 2020
- Posted by: Anila Macula
- Category: Blogs
Salespeople aren’t focused on the company’s key objectives.
Salespeople peoples objectives are not often linked to the company’s objectives.
A company’s objectives may be to achieve X profit by the end of the year. However, resellers, brokers and sales agents have distinct procedures and goals to deliver results in the most efficient way — and for good reason.
That said, how can sales teams create objectives that will deliver results that are in line with the company’s goals? Let’s try to understand the sales objectives that you need to succeed.
Understanding sales objectives
Sales objectives are the goals of the sales team.
Jason Jordan’s book titled “Cracking the Sales Management Code” believes that sales objectives are either manageable or unmanageable.
When a sales team wants to make X number of sales, they will set objectives to help them reach their goal. However, the fulfillment of these objectives may be affected by factors that are outside of your control such as the economy, customer behavior, trends and so on.
Here are some examples of metrics found in sales objectives:
- Percent increase in revenue
- Number of hours allocated for prospecting leads
- Percent Increase in profit margin
The results of these objectives can make or break an organization.
If a company is reaching its sales targets, then everyone is happy. This means most teams made positive contributions and fulfilled their objectives. Otherwise, it’s back to the drawing board.
Now, how do you create sales objectives when there are tons of sales metrics? Here are the four main types of objectives that you need to know:
4 Types of Sales Objectives
There are a lot of sales objectives and metrics that a sales team can focus on.
This makes goal-setting a daunting task for managers and executives who want to keep it simple. Fortunately, Jordan’s research found that sales objectives can be classified into four main types.
Market Coverage objectives target your sales team’s capability, tools and resources to cover the market. You may dominate a particular geographic location, industry among many others.
The target market coverage that you choose will determine the number of hires, budget or time allocated for sales calls.
For example, if you want to get 20% more customers in the upcoming year, you’ll need to improve recruitment efforts to cover a large base. You may also purchase new tools to improve the performance of your resellers, brokers or indirect sales agents and allot more time for sales calls.
Here are some examples:
- Number of New Hires
- Percent of Market Penetration
- Number of Qualified Leads per City
Sales Force Capability
Sales Force Capability determines the effectiveness of a sales team to close deals.
You can improve it by actively seeking new opportunities and reaching out to more prospects. After all, sales is a numbers game.
It may also be improved by training resellers, brokers and indirect sales agents to learn more skills and strategies. Their capabilities to pitch and target partners and clients can be improved through coaching and mentorships.
Here are some examples:
- Total open opportunities by month/quarter
- Total closed opportunities by month/quarter
- Win rate
Customer Focus objectives explore your sales teams’ ability to attract, boost and retain partners and clients.
A sales team could improve their sales funnel by using research-backed data and improving their personalized call patterns to appeal to prospects. They may also target partners and clients based on their location, social class, interests and behavior.
Here are a few examples of customer focus metrics:
- Lifetime Value
- Churn Rate
Product Focus objectives determine the effectiveness of your indirect sales agents in selling products.
Sometimes resellers and brokers must prioritize selling newer products as compared to older models. Meanwhile, other teams have different strategies per product.
For example, a product or service may be targeted for clients and partners that want to enjoy premium features regardless of the price. In contrast, a product or service may possess only basic features because it is targeted for consumers on a budget.
Here are some examples of product focus metrics:
- Revenue by product or product line
- Percentage of revenue from new products
- Revenue by product
Choosing your objectives
It’s nice to know that sales objectives have been narrowed down into four main categories:
- Market Coverage – sales teams ability to cover the market
- Sales Force Capability – sales teams ability to close deals
- Customer Focus – sales teams ability to attract and retain customers
- Product Focus – sales teams ability to sell products
You can set any type of sales objective, as long as it will help you fulfill your goals. If you don’t know where to start, you can even set objectives per category.
The ideas in this blog post were inspired by the ultimate sales book titled, “Cracking the Sales Management Code” by Jason Jordan. If you don’t have time to learn his ideas, we’ve summarized the key learnings and findings in our ebook here.
Do you make your account plan work? We made this infographic to help you out. If you’re interested to download some other questions or get some tips, feel free to download the BRM (=Business Relationship Management) poster.
Written by Frie Pétré