6 Tips for Setting Realistic and Achievable Sales Objectives

You're looking at your company's sales goals for the year. You know that although it'll be tight, your sales team can achieve them. They're a capable bunch, and you have the utmost faith.

However, you want to help them along the way by setting realistic and achievable sales objectives.

But you're not sure how to do that. Or even where to start.

Have no fear. Because we do.

This article will outline different types of sales objectives, tips and considerations when creating them, and different examples of them.

But first, we'll start with what sales objectives are.

What are Sales Objectives

Sales objectives are like mini-goals set for the sales department of a company so that the sales team can successfully achieve the company's sales goals. Essentially, the sales objectives build on each other so that the sales goals will be completed by the end of the month, quarter, year, etc. The first breaks the sales goals down into smaller, more achievable parts.

On the other hand, sales goals are the primary targets of what a company wants (or needs) its sales team to achieve. They can deal with essentially any part of the sales department, from individual performance goals to goals that deal with the number of sales or revenue generated.

Sales goals and sales objectives are part of the overall sales strategy of your sales team.

Your sales strategy is the blueprint for what your business wants to achieve in sales (the sales goals) and how they'll achieve those goals (which may include sales objectives).

Your sales strategy is an important part of your strategic sales plan, which provides information like budgets, past sales history, and other necessary information to analyze when deciding how to lead your sales team forward and predict realistic sales goals.

So basically, it goes:

1. Strategic sales plan
2. Which includes sales strategy
3. Which includes sales goals
4. That gets broken down into sales objectives
5. So that everything can be achieved successfully.

Make sense?

Good. Then let's move on to the different types of sales objectives.

Types of Sales Objectives

So, what are some of the most common types of sales objectives, and how can you use them to drive success? Here's our take.

1. SMART Goals

You might have heard of SMART goals before, and that's because they're a fantastic framework for setting any kind of objective, not just sales ones. SMART stands for:

• Specific: Exactly what do you want to achieve?
• Measurable: How will you track your progress?
• Attainable: Is the goal realistic but still challenging?
• Relevant: Does it align with the bigger sales strategy?
• Time-Bound: When do you want to achieve this goal?

For example, a SMART sales goal could be "Increase sales of our new product line to small businesses by 20% within the next quarter." This goal is specific (new product line, small businesses), measurable (20% increase), attainable (ambitious but achievable), relevant (boosts new product adoption), and time-bound (one quarter).

2. Cycle Time

This objective focuses on how long it takes to close a deal, also known as the sales cycle. A shorter cycle time generally means more sales closed in a shorter period. Here, you might aim to:

• Reduce the average sales cycle time by 10%
• Streamline the approval process for faster deal closures

By focusing on efficiency and removing bottlenecks, you can get more deals across the finish line quicker.

3. Leads

Not all interactions turn into sales, so lead generation is crucial. A lead objective focuses on acquiring a specific number of qualified leads, which are potential customers who have shown interest in your product or service.

Here are some ways to achieve your lead generation objectives:

• Content marketing: Create valuable content (like blog posts or infographics) that attracts potential customers.
• Social media marketing: Run targeted social media campaigns to connect with your ideal audience.
• Email marketing: Develop email campaigns to nurture leads and move them down the sales funnel.

During this period, your objectives could be to:

• Increase the number of qualified leads generated by 15%
• Improve the lead conversion rate by 5%

This means not just getting more leads, but getting the right kind of leads that are more likely to convert into sales.

4. Win Rate

The win rate is the percentage of qualified leads that convert into paying customers. Here's why it's important:

• A higher win rate means more revenue: The more leads you convert to sales, the more money your company brings in.
• Improves sales effectiveness: A low win rate might indicate issues with your sales qualification process or sales pitch.

Let's say your current win rate is 10%. You could set an objective to increase it to 15%. This might involve improving your lead qualification process to ensure you're targeting the right audience or providing more targeted product demonstrations during sales calls.

5. Revenue

The ultimate objective for most sales teams is to generate revenue. This objective focuses on achieving a specific amount of sales dollars within a set timeframe (monthly, quarterly, or annually).

Here are some ways to boost your revenue objectives:

• Increase sales volume: Sell more units of your product or service.
• Focus on high-value products: Sell more expensive products that generate higher profit margins.
• Upselling and cross-selling: Encourage customers to buy additional products or services alongside their initial purchase.

6. Profit Margins

Sure, revenue is important, but it's not the whole picture. The profit margin is the percentage of revenue you keep after accounting for all your expenses (think: product costs, employee salaries, marketing spend). Here's why it matters:

• Focuses on efficiency: A high-profit margin shows you're selling your products or services for more than it costs to produce and sell them.
• Improves financial health: Higher profit margins allow you to reinvest in the company's growth and development.

For example, if your current profit margin is 10%, you could set an objective to increase it to 12%. This might involve negotiating better deals with suppliers to reduce product costs or implementing cost-saving measures in your sales operations.

7. Customer Acquisition Cost (CAC)

Acquiring new customers is essential, but it shouldn't come at an exorbitant cost. The Customer Acquisition Cost (CAC) is the average amount of money you spend to acquire a new customer. Here's why it needs your attention:

• Optimizes marketing spend: Knowing your CAC helps you determine if your marketing efforts are efficient in attracting new customers.
• Improves return on investment (ROI): The lower your CAC, the higher your ROI for marketing and sales activities.

Let's say your current CAC is $100 per customer. You could set an objective to reduce it to $80. This might involve focusing your marketing efforts on more targeted channels that reach your ideal customer or offering incentives to attract new customers at a lower cost.

8. Churn Rate

Customer churn is the rate at which your customers stop doing business with you. A high churn rate can significantly impact your revenue stream. Just consider the following:

• Retaining existing customers is cheaper: It's generally less expensive to retain existing customers than to acquire new ones.
• Improves customer lifetime value: The longer a customer stays with you, the more revenue they generate over time.

For example, if your current churn rate is 5% per month, you could set an objective to reduce it to 3%. This might involve implementing customer loyalty programs, providing excellent customer service, or proactively addressing customer needs to prevent churn.

9. Cross-Sell and Upsell

There's gold in them thar hills... existing customers! Cross-selling and upselling involve encouraging current customers to purchase additional products or services. Here's the difference:

• Cross-selling: Selling a related product or service alongside the initial purchase. Think of recommending phone cases alongside a new phone purchase.
• Upselling: Selling a higher-priced version of the product the customer is considering. Think of suggesting a premium laptop model with more features.

By effectively cross-selling and upselling, you can increase your revenue from existing customers without the cost of acquiring new ones.

10. Customer Retention

Customer retention focuses on building long-term relationships with your customers and keeping them happy. Here's why it's important:

• Loyal customers are repeat customers: Repeat customers provide a predictable revenue stream and are more likely to recommend your company to others.
• Positive customer experiences create brand advocates: Happy customers can become brand advocates, promoting your company through word-of-mouth and online reviews.

There are many ways to achieve customer retention objectives, such as providing excellent customer service, offering loyalty programs, and gathering customer feedback to continuously improve your products and services.

6 Tips for Setting Realistic Sales Objectives

And now, what you've come here for. Our tips on setting realistic sales objectives. Well, our six tips are:

1. Divide your sales goals into their smallest parts
2. Look to the past
3. Understand the sales budget
4. Use your sales team's strengths
5. Find ways to motivate your sales team
6. Use a CRM system

Divide Sales Goals Into Their Smallest Parts

A giant end-of-year or end of five-year sales goal can seem pretty intimidating for your sales team.

And really, the whole point of sales objectives is to break those goals down so they can be achieved.

So, make sure you're dividing those sales goals into their smallest parts with your sales objectives. Do the math, too. If the sales goal is to make 45 million dollars by the end of the year, and that's $10 million more than was made the previous year, figure out by how much your sales team needs to increase their monthly revenue (or how much they need to increase each month). Make it a sales objective.

And do that with all the sales goals. Divide them into multiple parts rather than just one sales objective, if necessary, too.

By doing this, your sales objectives will essentially act as benchmarks for achieving your sales goals. As your team achieves these objectives, you'll know you're on the right track.

And if your team isn't succeeding in achieving these objectives, you know that it's time to adjust. Maybe the sales goals were too ambitious, and maybe you started with too high an objective; maybe more objectives need to be created to change your sales process. Whatever the reason, you need to find it and adjust accordingly.

Look to the Past

Sales goals should be created by looking at what the sales team achieved in the past years, including goals that weren't successfully reached.

Sales objectives can be created using the same principles. Which sales objectives were successfully reached in the past? Which weren't? Why weren't they?

If you do this analysis, you'll better understand how to develop sales objectives for your team. You can develop strategies for achieving sales objectives that weren't successful the year before. And you'll have a good idea of the types of objectives your team is good at achieving vs the ones they struggle with.

And if your team achieved all the objectives the year before, even better! It might give you less to work with for analysis, but you'll have even more knowledge of your team's successes and how and why it worked.

Understand the Sales Budget

Whenever you're doing anything that affects the sales department, make sure you check it against your budget. Don't create lofty sales objectives that will cost too much actually to achieve. Be realistic about the sales department's resources and what it'd need to reach the sales objectives you're setting out.

All this is to say that when you're developing sales objectives, make sure you're budgeting out how much they will cost to achieve.

And make sure they fit into your budget.

If they don't all fit into your budget, it might be time to go through the list of objectives you've created and consider the most important ones. Which could directly lead to sales goal success. Which should be prioritized.

And any that don't cut should get cut.

Sales objectives that wreck your sales budget aren't realistic. If it costs more than the gains will reap (both financial and otherwise), it's not worth achieving. That's just bad business practice.

Use Your Sales Team's Strengths

Not all sales objectives need to be the same for all the members of your sales team. Instead, your sales objectives should play to the strengths of your salespeople. If you have better closers, give them sales objectives dealing with closing. If you have those who're good at cold calls, assign them sales objectives dealing with cold calls and cold call scripts.

If you create sales objectives with the strengths of your sales team in mind, you're more likely to develop achievable sales objectives rather than if you just create them arbitrarily using the established sales goals.

That being said, you'll still want to be careful that you don't overestimate the strengths of your salespeople and give them goals that their strengths would need to be superhuman to achieve.

Use their strengths, but be honest in your analysis of what those strengths are and what those limitations are.

Find Ways to Motivate Your Sales Team

You may want to find ways to motivate your salespeople to achieve their goals. This can be baked right into the sales objective creation or added after the fact.

There are many ways you can incentivize your team members:

• Add bonuses or prizes when achieving objectives
• Create friendly competition amongst the sales team (you may need to be careful to make sure it stays friendly)
• Combine the two by providing bonuses for the first to hit certain objectives
• Emphasize the importance of what your team is selling (the benefit for the clients, the difference it can make for people, etc)

Or any other incentives you can think of.

According to a study reported by Forbes, the highest motivator for salesmen is a sense of purpose. So creating a motivating factor while keeping that in mind is an intelligent idea.

A team that's motivated is more likely to go out there and sell sell sell so the members can hit their objectives.

And, to an extent, your salespeople should be motivated to do well just to be good at their job. But, it never hurts to give them that little extra push. Especially if you know that the sales objectives you've accomplished are achievable, but only if they really put their noses to the ground and work hard.

Use a CRM

Your entire sales cycle will be much more streamlined because a CRM will help with it every step of the way.

From the lead generation to the closing of the sales to the referral process, a CRM can help organize and navigate the process.

Ringy, for instance, includes several features that can help your team through the sales process including:

• Calling
• Cloud VOIP Softphone
• Local ID
• Email
• SMS
• Drip Campaigns
• Integrations
• Contact Organization
• Pipeline Management
• Progress tracking

Think of all the ways you could use these features so that the sales process is easier to go through. Your team will be able to spend much less time on tedious administrative tasks and more time actually selling.

This is important because, according to HubSpot, salesmen are only talking to prospects for a third of their workday.

A CRM is one of the most beneficial tools you can provide for your sales team so your salespeople can sell more and nail their sales objectives.

Considerations When Setting Sales Objectives

Setting effective sales objectives isn't just about picking random numbers. It requires careful consideration of various factors to ensure your team is set up for success. Here's a breakdown of the key considerations when crafting your sales objectives:

1. Set Objectives Around Your Sales Team's Capacity

It's tempting to set ambitious goals, but it's important to be realistic about your team's capabilities. Consider these factors:

• Team size and experience: A seasoned sales team with a proven track record can likely handle more aggressive objectives compared to a newer team.
• Workloads and resources: Don't overload your team with unrealistic goals on top of their existing workload. Factor in the time and resources available to achieve the objectives.
• Historical performance: Analyze past sales data to get a sense of your team's baseline performance. Use this data as a benchmark when setting new objectives, ensuring they're challenging but achievable.

2. Set Objectives Around Selling Products

Every product is unique, and the same goes for sales objectives. Tailoring your objectives to the specific products you're selling ensures you're focusing on the right metrics. Here are some considerations:

• The complexity of the product: Complex products with longer sales cycles might require different objectives than simpler, faster-selling products.
• Product margins: For high-profit margin products, you might focus on acquiring fewer, high-value clients. For lower-margin products, you might target a higher sales volume.
• Product launch vs. established product: Launching a new product requires objectives focused on brand awareness and lead generation. Established products might benefit more from upselling and cross-selling objectives.

By tailoring objectives to your product mix, you ensure your sales team is focusing on the most relevant metrics for driving success for each product line.

3. Consider Your Sales Team's Capabilities

Every sales team has its own unique strengths and weaknesses. Understanding your team's capabilities allows you to set objectives that leverage their strengths and address any weaknesses. Here's why it matters:

• Plays to their strengths: When objectives align with your team's skills, they can excel and achieve impressive results.
• Identifies areas for improvement: Using objectives can expose weaknesses, allowing you to provide targeted training and development opportunities.
• Fosters a culture of continuous learning: By addressing weaknesses, you create a culture where learning and improvement are encouraged.

4. Customer Retention Strategies

The best sales strategy goes beyond just acquiring new customers. This is because of the following reasons:

• Customer lifetime value: Existing customers are more likely to repurchase and spend more over time compared to new customers.
• Reduced churn rate: Losing customers hurts your bottom line. Set objectives focused on building long-term relationships and reducing churn.
• Brand advocacy: Happy customers become brand advocates, promoting your company through word-of-mouth and online reviews.

By incorporating customer retention strategies into your sales objectives, you create a holistic approach that ensures sustainable growth for your company.

Sales Objectives Examples

So, you've familiarized yourself with the various sales objectives and how to tailor them to your team. Now, let's get into some specific examples to illustrate their practical application:

To Conclude

When creating your sales objectives, think about the bigger picture of what your sales team needs to accomplish with the sales strategy and sales goals. You'll want your sales objectives to direct your sales team down the road for success to those bigger goals.

And, to keep objectives practical and realistic, remember our six tips:

1. Divide your sales goals into their most minor parts
2. Look to the past
3. Understand the sales budget
4. Use your sales team's strengths
5. Find ways to motivate your sales team
6. Use a CRM

And make sure to consider:

• The capabilities of your team
• The resources available to you
• And the number of changes being implemented.

If you're able to keep all this in mind, you'll create achievable, realistic sales objectives for your team, no matter the types you choose to implement.

To make setting and achieving those goals even easier, you'll need a CRM like Ringy. If you want to know more about what Ringy could do for you, request a demo.