It is not unusual for professional sales people to focus on just the sales they make. As a sales professional, you have probably set a long-term goal for each part of the sales process. From the number of cold calls you make to the number of closings, you have a number that you want to hit. But, it is also important to take your goal setting one step further. You need to set and achieve revenue goals as well. As you look to set and achieve revenue goals, there are a few steps that you need to incorporate into your strategic planning and sales process.
- Most sales people do not sell just one product or service. You probably have several different products or services that you can offer to your potential clients. The first thing you need to do is to figure out what the average sales price is for your products. If you are aiming for a particular end of year dollar sales goal, you need to divide your dollar sales goal by the average price. To make it simple, if your goal for the year $100,000 and the average sales price is $100, then you can figure out that to achieve revenue goals you will need to sell 1,000 units.
- As part of determining what it will take to achieve revenue goals, you also need to figure out the number of sales that you need to make, how many will be first time sales and how many will be repeat sales. You may have a product or service that clients use once a year or it may be once a month. You need to determine what the number is so that you can plan for and achieve revenue goals. Establishing this number is important for several reasons. First, as you realize the time it takes before repeat sales can be expected, you can plan your sales calls far in advance. This type of planning keeps you in view of the customer, helps you to not miss sales opportunities, and helps to achieve revenue goals through preplanning of sales calls.
- Another important factor in determining how to achieve revenue goals is to calculate your closing ratio. Again, to make this work to help achieve revenue goals, it will require planning and good record keeping. You will need to keep track of all of the sales calls you make. You will also need to keep track of all of the sales that you closed. For example, if you made 300 sales calls throughout the year, and you closed 100 of them you have a sales closing ratio of about 30 percent.
- The reason that it is important to calculate your sales closing ratio when you are working to establish a way to achieve revenue goals, is so that you can determine the number of actual sales calls that you will need to make to achieve your goal. If you know that you are closing about 30 percent of all sales, and you know that you need to sell 1,000 units to achieve revenue goals, then you need to figure out how many sales calls you need to make to reach that goal. If you sell one unit per sale then you would need to make about 3,330 sales calls, i.e. 1,000 sales divided by .3 (30 percent).
Obviously, this is just a simple exercise to show you how to do the math to determine the ratios needed to achieve revenue goals. The math is solid as long as you have kept good records and are aware of your average sale price, the number of sales you made, your closing ratio, and the number of sales calls you will need to make. You will find that this is a very useful strategy in helping you to achieve revenue goals.