In sales, goals are everything.
They motivate sellers and hold them accountable. They create benchmarks and set standards for what success should look like.
Additionally, sales goals keep managers and reps focused on objectives that align with the big-picture plan.
While goals play a crucial role in the sales strategy, defining measurable objectives that drive wins isn’t exactly easy.
According to the Harvard Business Review, most goals are missed because there’s a problem with the goals. By contrast, only about 10-20% of missed goals were missed because of the salesperson.
SMART (an acronym for Specific, Measurable, Achievable, Realistic and Timebound) is a goal-setting framework for setting quantifiable goals. It not only defines the target outcome, but it also tells you how you’re supposed to get there.
In this article, I’ll explain how (and why) to use SMART goals for sales.
What are SMART goals?
In sales, SMART represents a series of steps designed to guide the goal-setting process, much like how lead qualification methodologies like BANT or MEDDIC help sellers determine whether a prospect is the right fit.
Instead of qualifying leads, SMART essentially helps you “qualify” goals so that you stay focused on tasks that move the needle in the right direction.
Each letter in “SMART” represents a step in the goal-setting process. I’ll explain each of them in these next few sections.
Goals must be clear, with no room for ambiguity.
For example, if a sales goal contains words like “more” or “less,” it’s not specific. As such, goals like “increase revenue” or “make more calls” won’t cut it by a long shot.
Instead, set goals by working through the “five W’s.”
- What do you want to accomplish?
- Why does this goal matter?
- Where is it located?
- Who is involved?
- Which resources are required?
Failing to set specific goals makes it difficult to achieve desired outcomes and can cause sellers to become frustrated or lose momentum. This first step helps teams avoid wasting time chasing vague objectives that don’t mean anything.
Sales SMART goals must also be “measurable,” which means that you can quantify and track progress using tangible numbers. As such, something like “increase average deal size” alone isn’t a SMART goal, because you don’t have enough information to measure that increase.
Measurement can be used as a tool for outlining objectives by requiring you to answer the following questions:
- Where’s the starting point?
- What’s your desired outcome?
- How much?
- How will you know when you hit your target?
Being able to measure sales processes and results is essential for making consistent progress and not stagnating. In the modern age of digital sales, that calls for tools that can make sense of the large variety and quantity of data that even small organizations generate. Take Revenue Grid, for example, which turns your sales teams’ activity with opportunities and accounts into easy to understand charts and graphs for quick reporting.
SMART goals are also realistic.
A few things to keep in mind:
- Goals should be challenging but not impossible. If you set the bar too high, your reps are likely to get frustrated or ignore goals altogether. On the other hand, you don’t want to set goals that are too easy.
- Set goals based on data, using factors like rep performance and the numbers you need to hit in order to break even, and what needs to happen in order to grow.
- Stick to what you can control—meaning, goals should focus on actions over results. Focusing too much on outcomes can actually hinder rep performance, and by extension, hurt the bottom line. For example, instead of telling reps that they need to close 15 deals this quarter, tell them they need to make 20 calls this week or send 30 emails.
It’s worth mentioning that “stretch goals,” a term used to describe the ambitious targets companies set for solving “moonshot-level” challenges belong in a different category.
According to HBR, stretch goals are often misused by sales leaders who view them as a way to challenge and energize salespeople. The article states that missing stretch goals can create a culture of fear and helplessness that can undermine performance and incentivize unethical behavior a la Wells Fargo’s 2013 fraudulent cross-selling scandal.
When used appropriately, stretch goals can drive innovation. However, by definition, they go beyond existing capabilities, meaning they’re not realistic.
The next thing you’ll want to look at is relevance.
Focus on goals that make sense for both your reps and align with the big-picture business strategy. SMART goals for sales should always focus on moving the organization toward a vision of the future.
Even if you’re setting short-term goals, you’ll want to make sure that you do so with the long-term plan in mind.
Check for relevance by working through the following questions:
- Does this goal support organization-wide objectives?
- Does it align with other initiatives in progress?
- Does this seem worthwhile?
- Is now the right time?
- Are there other areas we should be focusing on instead?
- Does it make sense based on the current state of the market?
Finally, every goal should have a definitive deadline attached. Setting a timeline makes it easier to report your progress and allows you to set smaller milestones to hit along the way to ensure you’re moving in the right direction.
Setting SMART goals for sales is about more than establishing one final deadline, it also helps teams prioritize tasks and get more done—plus it adds an element of urgency.
You can use time to understand when and where to break down steps within each goal by answering the following questions:
- When does this need to be done?
- What can sellers do today?
- Where should we be in a month?
- In six months?
While deadlines will vary by project length and complexity, the aim here is to determine what can be accomplished within a specific timeframe. With longer projects, it’s useful to define expectations at key milestones.
SMART action plan for sales: how to get started
Now that we’ve covered the basics of the SMART goals, here are some tips to help you implement this strategy right.
Focus on “activity goals”
Activity goals are often considered the most actionable SMART goals because you can control the main variable. While you can’t control conversion rates or revenue, activity goals tend to be an effective way to increase sales numbers.
For example, you might set: “run five guided demos per week” as a goal. Although that number might change based on the persona or segment, the target number remains directly connected to a measurable desired outcome.
- Are there any limitations you need to consider?
- What is the result of achieving this goal?
- What happens if we don’t reach this goal?
From there, you’ll want to determine which goals have the biggest impact on the bottom line and progress toward high-level objectives. Set those “high-impact goals” as your top priority and use them to set team-level targets.
Find the best way to incentivize individual reps
Sales goals aren’t just about revenue.
You’ll also want to take individuals’ professional goals into account, and use them to inform your coaching strategy.
Establish sales goals that will inspire your team to challenge themselves and improve.
Talk to each of your reps on an individual level about their strengths, weaknesses and professional goals. What do they hope to improve?
While development might not have a direct impact on the bottom line in the near-term, investing in your reps can boost retention and drive major performance gains.
Define how you’ll measure success
If you’re focusing on improving sales productivity with activity-based goals, you’ll want to track KPIs that quantify what reps are doing all day including:
- Win rates
- Time-spent prospecting
- Calls made
- Emails sent
- Demos hosted
- Meetings booked
To measure the impact of your efforts, you can work backward to arrive at the goal.
Let’s say a rep needs one more sale per week to hit quota. You might then focus on increasing the number of calls they make each day.
So, if that rep averages one sale every 15 calls, they’ll need to make three more calls a day to get that extra deal.
From there, you can update that individual’s targets to reflect that change and see if things improve. If they’re still struggling, you can build phone sales tactics into that person’s coaching sessions.
Develop a plan for failed goals
Sadly, a lot of goals fail.
Make sure that your strategy makes room for learning from failures so that you don’t repeat past mistakes and helps you get up and running with a new and improved plan.
“Specific,” “measurable” goals allow you to evaluate failed objectives and pinpoint what went wrong. Ideally, you’ll be able to look at your numbers and answer the following questions:
- What roadblocks did the team encounter?
- Did the sales team have the resources needed to achieve target objectives?
- Did reps have the right experience/capabilities to take this on?
Make sure sellers have the tools they need
According to Forrester Research, B2B sellers are up against a long list of roadblocks as they work toward key milestones. If sellers are struggling to hit targets, there might be a problem with your sales enablement strategy.
Consider the following as you evaluate your team’s ability to hit goals:
- Do sellers have access to the data they need to personalize customer experiences?
- Can they find sales collateral?
- Are there internal silos that prevent sellers from accessing critical information?
- Are marketing & sales teams in alignment?
Without well-defined goals to work toward, sales reps can get frustrated and lose steam, which in turn, can have a negative impact on sales performance and revenue.
SMART goals offer sales leaders a system for setting objectives that contribute to the organization’s success and help them figure out exactly what it takes to hit those targets.
Ultimately, sales SMART goals ensure that your sales team has something to strive for, and helps leaders benchmark performance, measure progress and determine what’s working and what isn’t.