Knowing the number of leads you need to achieve your revenue goal helps you determine what your lead generation strategy needs to be, too. It’ll be easy for you to figure out what you need to do every week, month and quarter to stay on track. The key to making it work, though, is taking your time on each step in being realistic in your estimations.
The end of one year and beginning of a new one is a great opportunity to examine your successes from the previous year, determine what you want to replicate, what you want to change and then set some goals for the new one.
Because setting attainable sales goals can be a lot more tricky, and stressful, then people tend to think, I’d like to offer a step-by-step guide to help you set and reach your target.
1. Start with revenue. Some sellers, and particularly business owners who think in terms of profits, like to start with margins or other metrics when setting their sales objectives. But whether you’re setting your own goals, or assigning them to a sales team, I encourage you to begin with revenue. Customers buy based on revenue. They don’t agree to pay you a certain profitability margin. If they knew your margin, they’d surely negotiate for deeper discounts! Revenue makes sales objectives a lot more concrete for sellers. (Of course margin is a critical metric, but you need a revenue goal, too.)
2. Make it your own. There’s no law that says you have to be satisfied selling at the revenue level your company needs, or the amount assigned to you. Find the figure that will allow you to reach your personal goals for the year and use it as your real quota goal. It might seem tougher at first, but it’s also a lot more motivating!
3. Don’t get overwhelmed. When you first see your quota or personal goal, it can seem like an enormous number, especially if it’s significantly higher than last year. Push those thoughts aside. Concentrate on seeing the goal as a figure that will shrink as you move through your planning process.
4. Figure out how much you’ve identified already. Look at your sales pipeline. Examine what you already know, or have a strong suspicion, will close. Often you can see opportunities you anticipate will close through the first quarter. Depending what you sell, you may even have annual services contracts you can count on already. Subtract this number from your revenue goal.
5. Look for growth in existing accounts. Of course, the easiest sales opportunities are to existing clients, so look at them next. Where are there solutions you could be offering to customers you already have? Are some clients not taking advantage of all the services you provide? Are there other contacts or departments you could be selling to? Find a realistic amount of growth you can expect in your current accounts, and then subtract that number from your existing total, too. By now, your quota goal has probably shrunk considerably!
6. Uncover accounts, or revenue at risk. While you may see significant growth in many of your clients, sadly, the opposite is true as well. No matter how great you are, some small percentage of your existing customers is likely to leave, merge, or take their business elsewhere. Try to figure out which of your clients might be most vulnerable. You can subtract a percentage of that revenue now, for planning purposes, while making a note to yourself to pay special attention to them this year.
7. Leave yourself some wiggle room. Whatever number is remaining in your revenue goal, add 20% to it. Why? In the event that you unexpectedly lose a large account, a big deal doesn’t close, or some of your plans don’t work out the way you had anticipated, you’ll still be right on track to achieve your revenue goal!
8. Establish your lead generation strategy. Once you’ve taken these steps, now comes the fun part. Look at your remaining revenue goal – the amount you still have to generate after you’ve figured in your visible pipeline, existing customers, and the small percentage of accounts you might lose – and start to break it down into activity goals. How many new accounts do you need to meet your remaining revenue goal? How many new leads will it take based on your past closing ratio? What kind of lead generation campaigns should you do to find those leads?
The second year in one of my most memorable territories I had no existing customers and little carried over in the sales pipeline. (You can see why it was memorable!) I ran lead generation events every quarter and email campaigns every two weeks. Knowing the number of leads you need to achieve your revenue goal helps you determine what your lead generation strategy needs to be, too. It’ll be easy for you to figure out what you need to do every week, month and quarter to stay on track. The key to making it work, though, is taking your time on each step in being realistic in your estimations.
Lots of sellers fail to accomplish what they’d hoped from year to year because they never really bother to figure out exactly what they have to do to reach their goals – so take this template and use it to create a stellar year.
About the author
Kendra Lee is a top IT seller, sales advisor and business owner who knows…