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What Is A Sales Target, And How to Track It?
Blog / Sales Management / Sep 27, 2013 / Posted by Nikolaus Kimla / 27013 

What Is A Sales Target, And How to Track It?

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What is a sales target? A sales target is a goal set for a salesperson or sales department measured in revenue or units sold for a specific time. Here is the complete definition of a sales target as found on Business Dictionary.com. Setting up sales targets help keep you and your sales team focused on achieving your goals. Do you know that you can use many different sales target types to better forecast your revenues in real-time? Find out below.

Understanding Sales Target Definition

Nowadays, many sales organizations are using powerful sales pipeline management methodology in order to track their sales process. A sales pipeline is as a visual representation of your sales process where all your potential customers are displayed and neatly 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. Therefore the simple target definition could look like this:

A sales target is a sales tool that enables you to easily measure and estimate your opportunity contribution to your sales goal.

Most of the companies are tracking only one target type i.e. the real target or the final revenue. However, pipeline management methodology allows you to monitor your sales effort in real-time and gives you an interactive forecast tool. Here are 5 essential sales targets that will help you to better forecast and analysis your sales progress.

5 Essential Sales Target Types For Your Sales Success

The sales target examples below calculate and forecast your sales revenues based on the opportunity value and the following additional set of conditions:

  • Sales stage probability of closure – the likelihood of winning the opportunity for that particular sales step.
  • Opportunity ranking – the personal likelihood of winning the opportunity.
  • Opportunity pipeline position – the current position of the opportunity in the sales pipeline.
  • Opportunity status – the status of the sales opportunity i.e. either it is an open opportunity or won opportunity.

Here are the 5 target examples that you can use to forecast your revenues:

#1: Unweighted Sales Target

This is the most liberal target. The unweighted target is the sum of all opportunity values in the pipeline, but is an inaccurate view of the actual business coming in. The view does not take into consideration any potential deals that are lost during the process. This view would mean that you have a 100% closing rate for all of your opportunities.

The powerful concept behind the sales pipeline methodology is that you can simply set the probability of closure for each sales step in your sales process. It’s measured in percentage and it enables you to “weigh your pipeline” using the weighted target.

#2: Weighted Sales Target

The dynamic target calculating the weighted value i.e. the sum of all opportunities values according to the position in sales pipeline, it’s sales step probability of closure and the target date period definition. Here is another target definition by David Brock“The weighted target is equal to the sum of the total opportunity values in each sales step multiplied by the probability of closure for that step”.

It’s the most objective target that takes into consideration the opportunities you lost during the process.

#3: Ranked Sales Target

The ranked target is the sum of all opportunities values according to the subjective ranking of the opportunity itself by sales rep and to the target date period definition. The ranked target is the estimate of each individual sales rep as to their chances of winning a specific opportunity. The weighted percentages for each sales step are not included in this target view.

This is a personal-based target and it’s related to the individual sales rep preferences and experiences with the customer. Who knows the most about the customer? Yes, it’s a sales rep.

#4: Balanced Sales Target

This is the most conservative target type. A target calculating balanced value i.e the sum of all opportunities values according to the position in sales pipeline, to the subjective ranking of the opportunity itself and the target date period definition.

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 i.e. target calculating the real value i.e. 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.

By tracking the details of every sales opportunity you can stay on top of your sales progress and ensure your sales team hits their sales targets. Get your free trial of Pipeliner CRM now.

How to Efficiently Track Sales Targets

ll these sales targets let you effectively track your sales pipeline opportunities through many different conditions. 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. Whether you track your sales forecast or quota, we’ve made it easy for you to track any type of custom goal, all in real-time and always in front of you.

I hope you can now quickly find the answer to the question “what is a sales target“? For a more detailed look into sales target tracking and pipeline management CRM software take a look at Pipeliner CRM.

    About Author

    A 30-year veteran of the computer industry, Nikolaus has founded and run several software companies. He and his company uptime iTechnology are the developers of World-Check, a risk intelligence platform eventually sold to Thomson Reuters for $520 million. He is currently the founder and CEO of Pipeliner Sales, Inc., developer and publisher of Pipeliner CRM, the first CRM application aimed squarely at actually empowering salespeople. Also a prolific writer, Nikolaus has authored over 100 ebooks, articles and white papers addressing the subjects of sales management, leadership and sales itself.

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