Sales Tip of the Week from Mike Leeds – Pro Sales Coaching
Chunking Down Your Sales Quota
January is almost over, and December seems so far away.
There are two major areas of concern when looking at annual quotas and goals on a yearly basis. First, the number can seem impossibly large and unattainable. Second, the large number of months remaining can reduce the sense of urgency for immediate success. Please consider that as of next Monday, will still have 92% of 2016 to go.
Below are three simple ways to consider "chunking down" an annual sales target to improve short-term success.
1. The Football Technique. Divide your annual sales target into four quarters like a football game. For example, a $1,000,000 annual sales quota for 2016 translates into a quarterly sales goal of $250,000 by March 31.
2. The Baseball Technique. Divide your annual sales target into twelve "innings" (yes, a slight modification from baseball's nine innings). For example, a $1,000,000 annual sales quota for 2016 translates into a monthly sales quota of $83,334 per month.
3. The Year-Over-Year Technique. This method takes into account any seasonal impacts for your business, and directly compares a month of the current year with the same month last year. For example, we have a $1,000,000 annual sales quota for 2016. Last year's sales results were $800,000. Specifically, last February's sales results were $128,000 which was 16% of 2015 total sales. For 2016, we would assign February's sales quota at 16% of $1,000,000 which translates $160,000. This methodology is the repeated for each month going forward.
Using any of the above techniques, you can apply a quota shortfall from January, 2016 (if any) to the total months remaining, so you stay on track. Additionally, you can "over assign" these smaller sales quotas into less months, or assign a higher number to cover vacation and holiday times. This enhances your chances to blow through your sales quota, and maximize your sales commission earnings potential.
There are many other techniques available to calculate smaller sales quotas into shorter timeframes (including calculating to a weekly or daily basis). Facts to consider when establishing these "chunked down" numbers are the size of the average sales order, the length of the sales cycle, and the number of sales activities required to close a sales.
The next blog topic will offer tips for "chunking down" sales activities to ensure sales success.
Have a great sales week!