How To Set Sales Target In Marketing

How To Set Sales Target In Marketing
How To Set Sales Target In Marketing
Sales targets are goals for the sales team (which may include you) to achieve. There are many ways to set
targets:
• Based on last year’s sales, plus ‘a bit’.
• Based on last year’s sales, plus contributions from new products or services that have been introduced.
How To Set Sales Target In Marketing
• Based on a vision the company has to seriously grow the business.
Sales targets can be any number you like, but they need to be realistic and achievable. When you have decided
the total sales target for the year:
• Take the total sales target and divide by 10. Although there are 12 months in the year, it’s better to focus
on 10 as some months can be slower, depending on your market sector. This is your monthly target.
• Work out your average order value. This may vary, so pick an average. If you don’t know, work out the
lowest sale you would be happy to accept.
• Take your monthly target and divide by the average order value. This is the number of sales you need
every month to meet your target.
How To Set Sales Target In Marketing
• How many repeat sales do you get every month from existing customers?
• How many existing customers might be lost in the next 12 months?
• How many new customers do you need?
Add the details to a spreadsheet like the one on the next page and share it with the sales team:
Area Example Your Company
What is your sales target for the year? $1,000,000
Divided by 10, this is the monthly target $100,000
What is your average order value? $5,000
How many average orders are needed to meet the monthly sales target? 20
How many orders will be from existing customers? 2
How many new customers do you need? 18
Further refinements may be needed to adjust the targets, as some months may be quiet and others will be busy.
Looking at last year’s sales is a useful place to start.
See also:
How To Set Sales Target In Marketing
Q14 How do we work out the sales leads needed to achieve our sales targets?
Q15 What’s in a sales plan?
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