How to Predictably Hit Your Sales Target in 2024
Sales goals almost always go up with the coming of a new year. And most of the time, the new goal is no layup—it will take the collective best effort of the entire team to succeed.
Planning will begin to identify and quantify predictable revenue sources. Gaps will be identified, strategies developed, programs launched, and quotas assigned to ensure success. Yet, according to FactSet, 38% of S&P 500 companies fail to hit their target.* An astounding four out of ten companies fail, which sounds surprising as these sales organizations are staffed and led by intelligent and talented people. So, what’s the deal?
Why do so many companies fail to hit their target?
The simple reason is because the strategies to close the gaps fail. New products or services, pricing actions, incentives, and other bets aren’t enough. Often, we find the root cause is that sales teams needed to do something different or better, and they and their leaders didn’t have an effective way to make that leap. Human behavior is difficult to change. The good news is that there are proven ways to lead and achieve the desired behavior change, and FranklinCovey has one of the best.
What does it take to succeed?
A repeatable system to close the gaps. We define the “system” as a framework/approach with supporting technology that enables you to turn sporadic sales performance into consistent, predictable results.
There are two parts to the system:
- Identifying the gap and measuring what behavior needs to change to close it.
- Improving the skill/quality with which the new behavior is done.
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Let’s describe the first part. Our 4 Disciplines of Execution® system helps leaders identify the gap, set an X to Y by When goal , establish the lead measures that lead to achieving the goal, set up scoreboards to track progress, and implement a cadence of accountability so everyone knows where they are and what they need to do next to win.
Here is an example. Imagine that the team is responsible for $500 million in annual sales and works together to determine that the run rate of the business will produce 60% of the sales target and some new strategies will add another 25%, leaving a 15% gap. The gap is $75 million. Leadership decides the best strategy to close the gap is selling more to existing customers. Current customers do $225 million. Using the X to Y by When formula, we state the goal: We will increase sales to existing customers from $225 million (X) to $300 million (Y) by the end of 2024 (by When).
Now, on to lead measures, the main leverage point of the system. Frontline leaders decide that a good lead measure is for each salesperson to pitch a new product to each existing customer they manage. A scoreboard can then be developed, and sales managers would meet with team members to review the previous week’s commitments and set new commitments for progress on the lead measure for the upcoming week. This might sound easy. And, like many things, easier said than done.
The second part of the system is often overlooked. And that’s because leaders often think that everyone knows the plan, so go do it. In this case, the plan is to pitch a new product to every existing customer. And here is the tricky part. Some salespeople do that well and succeed, and others do it poorly and fail. So, it is the skill and quality with which somebody presents the new product, not simply the fact that it was presented.
The second part of the system is identifying and improving the skills necessary to pitch the new product and win new business. A successful salesperson would need the skills to:
- Uncover the underlying problems or results that would create interest and motivate the customer to talk further.
- Craft a relevant, distinct, and memorable pitch.
- Close the business and sign the deal.
When these two parts of the system come together, the probability of success in closing the gap and hitting the sales target is greatly improved.
Is your team looking to achieve their sales goal this year?
We’re here to help! Contact your client partner or implementation strategist to get started today.
* Butters, John. “Earnings Insight.” FactSet, November 17, 2023.