How to Set Sales Targets in Uncertain TimesArticle by Colleen Francis, November 30, 2020
Salespeople, business leaders, and shareholders thrive on having reliable and realistic sales targets. Without them, you can’t possibly gauge performance. Setting those sales targets, more importantly, hinges on being able to consistently anticipate the future.
So, what do you do when the future is uncertain?
I recently encountered two cases where each business and its sales pros were struggling with that very question, but for very different reasons. In the first case, a reader of my newsletter reached out to me looking for advice. They were selling in a market that had been hit very hard by the effects of the global pandemic. For them, the problem was: how do you set targets when revenues are down sharply?
The second case involved a client of mine whose results this year were equally unexpected. But, in their case, revenues had spiked up by an astonishing 120%. For them, the problem was: how do you set targets when you can’t be sure your current blow-out performance was a blip and not a trend?
What I’m illustrating with these two extremes is that uncertainty is a spectrum. It’s different for everyone, but we all tackle it best with a specific solution. No matter where you find yourself on the range of consequences brought on by uncertain times, everyone must set realistic and reliable targets for the road ahead. That means sticking to a repeatable process—one that’s designed to troubleshoot and bring meaningful answers to the unique questions you’re posing about the direction of your business right now.
Look carefully at your specific industry. It’s a mistake to assume that what’s true for one is true for all—especially during uncertain times. If you’re working in or selling to the hospitality industry, for example, it’s reasonable to conclude that things will be down for the foreseeable future and might not ever look the way they did in 2019. And yet, that’s not the case for those in the online retail sector, for example, where consumer and B2B activity remains strong and is still growing. Your assumptions that go into sales targeting must be informed by what’s happening close to home. So, stay focused!
Now is the time when you find untapped potential. Periods of great change are precisely when you make unexpected discoveries in your market—ones you’d have previously overlooked because you were super busy. If you’ve been selling to customers in the automotive sector, for instance, it’s only due to a period of adversity that you begin to discover your product (or a variation of it) is also in-demand in the agricultural sector. Go look now for that untapped potential.
Don’t set your targets based only on who’s currently buying from you. This is a mistake I see at both ends of the uncertainty spectrum. If your sales exceed expectations this quarter, you’re setting yourself up for disappointment if you blindly set similarly high targets for future quarters without doing some digging first. You must first know the real potential that exists in the markets you’re serving. A client of mine in the toolmaking business experienced this. For years, they had slow, steady growth selling only to aerospace customers. Then, one day, Amazon came calling. It turned out my client’s products were mission-critical for conveyor belts used in large distribution centers. Always ask: who else needs this thing we make and sell?
Be realistic. Whether you’re dealing with an unexpectedly tough market or better-than-expected growth in your business right now, the last thing you need to be doing is shooting for the moon with your sales targets. There’s nothing wrong with setting a modest sales target right now. Better to meet and exceed one of those than to set an 80% growth target that no one meets and everyone resents. You can revise your targets upwards as the market improves. In the meantime, give yourself permission to be realistic based on the facts you know about the state of your specific industry right now. Many of my clients are using 2020 Q2 and Q3 results as the basis for their 2021 targets. That’s smart planning.
Have honest conversations. Your customers are in the same marketplace as you are. They have their own set of problems brought on by uncertain times. They have budgets to set and revise based on what they’re seeing and dealing with currently. Talk to them about that. Ask them: what kind of budget are you putting in place next year for purchasing our product?
No matter where you find yourself on the uncertainty spectrum, your sales team needs a pathway to success. They get there by having reliable sales targets. Even when it’s hard to tell where things might be going, you owe it to yourself and to them to have a solid plan!