Understanding Sales Target Definition
Many sales organizations are using sales pipeline methodology to track their sales process. Sales pipeline is a visual representation of your sales process where all your potential customers are displayed and arranged according to their phase in your sales cycle.
Each sales opportunity or sales deal has its own unit value that is calculated into the target. A sales target is a sales tool that enables you to easily measure and estimate your opportunity contribution to your sales goal.
5 Essential Sales Target Types
#1. Unweighted Sales Target
The unweighted target is the sum of all opportunity values in the pipeline, but is an inaccurate view of the actual business. It does not take into consideration any potential deals that are lost during the process. Meaning you would need a 100% closing rate for all of your opportunities.
#2. Weighted Sales Target
The dynamic target calculating the weighted value—the sum of all opportunity values according to its sales step probability of closure. It’s the most objective target that takes into consideration the opportunities you lost during the process.
#3. Ranked Sales Target
This is a personal-based target and it’s related to the individual sales rep preferences and experiences with the customer. The ranked target is the estimate of each individual sales rep as to their chances of winning a specific opportunity.
#4. Balanced Sales Target
This is the most conservative target type. A target calculating the sum of all opportunities values according to the sales step probability of closure, and the subjective ranking of the opportunity itself. It does take into the consideration the lost opportunities and your sales reps individual preference toward the deals. This is the target you should be focusing on.
#5. Real Target or Revenue
Or achieved target calculating the sum of all won opportunity values within a given target range. This is actually the revenue your sales team achieved over specific period of time.
How to Efficiently Track Sales Targets
sales targets let you effectively track your sales pipeline opportunities. However, at the beginning you need set your sales goal, right! One thing is to understand the “weight” of your pipeline and second one is to achieve your goal target.
A sales goal is a special freely modifiable time-based value towards which sales force is headed. Once, you setup your goal and start filling your sales pipeline with potential customers, you can easily track your goals at all times.