Why Bad Targets Do More Harm Than Good
Unrealistic targets demoralise your team and destroy trust. Targets that are too easy leave revenue on the table. The sweet spot is targets that stretch your team but remain achievable with focused effort. Getting this right is one of the most important things you can do as a sales leader.
Start With Historical Data
Look at your actual performance over the past 12 months. Account for seasonality, one off deals, and market changes. A realistic growth target for most businesses is 15 to 25% above the previous year. Anything beyond 30% needs to be backed by specific plans for how the additional revenue will be generated.
Top Down Meets Bottom Up
Start with your company revenue goal and divide it among your team members. Then validate by building up from each rep's pipeline, historical close rate, and capacity. If the top down number requires each rep to double their performance, the target is unrealistic without additional resources.
Account for Ramp Time
New hires should not carry full quotas immediately. A typical ramp schedule gives new reps 25% of quota in month one, 50% in month two, 75% in month three, and full quota from month four. Expecting full performance from day one sets everyone up for frustration.
Break It Down Into Activities
Revenue targets feel abstract. Activity targets feel actionable. If a rep needs to close $50,000 per month and their average deal size is $5,000 with a 25% close rate, they need to work 40 opportunities. Break that into weekly outreach numbers, meetings booked, and proposals sent.
Build in Accelerators
Create bonus incentives for exceeding targets. This rewards your top performers and creates upside that motivates the team. Accelerators that kick in at 110%, 125%, and 150% of target encourage reps to keep selling even after they hit their number.
Review and Adjust Quarterly
Targets should not be set in stone for the year. If market conditions change significantly, adjust accordingly. Sticking rigidly to targets that no longer reflect reality damages morale and credibility. Communication about why targets are changing is as important as the adjustment itself.
Commission Only Agents Need Targets Too
If you use commission only sales agents through platforms like Zepys, set activity and revenue benchmarks even though you are not paying a base salary. Clear expectations help agents prioritise your products and give you a basis for evaluating performance.