Sales targets
If you find your business off course and falling short of your sales targets, then you need to take early action and change what you are doing. You cannot think that sales will just get better and that you have the time to relax and wait for the tide to turn.
Whenever your business is underachieving, act quickly and review why? Begin by making a list of every marketing activity you undertake and analyse whether they are contributing at all to your current level of sales. If they are, then the big question is how to optimise each method to achieve even more. If your activity is producing negligible or zero sales, then further investigation is required.
What are sales targets?
For most small businesses, setting sales targets is a “finger in the wind” exercise. There’s almost a glass ceiling placed on what can be achieved, with targets generally a reflection on actual performance from the previous year. Many also fail to track success throughout the year either on a monthly or weekly basis and instead look back after the year-end and wonder what happened.
It doesn’t have to be like this. Where is the excitement and ambition to strive for more, a lot more? Where is the detail in the plan to achieve so much more? What is the basis of the numbers selected?
It makes more sense to set sales targets based on a formula and then use a system to frequently monitor the numbers. This then provides clear indications whether your business remains on course to achieve its annual targets, or you need to act early (note the word early) and adjust what you are doing to get the business back on track. The key to knowing how to achieve your business targets is to understand how many sales you need each week or month.
Sales targets examples
Sales target formula
1. List the turnover/sales figure you achieved last year. Did this provide sufficient profit for you? If not, then calculate the level of sales you need to achieve to reach your profit target. Is this achievable? If so, then let’s move on. If not, then adjust the formula until you calculate a sales target that provides a level of profits you agree on and you consider your business team can deliver, albeit it’s a stretch. If the sales figure isn’t stretching, then it’s unlikely your people will grow and another year of “stagnation” sets in. If it’s beyond their believability, that they can achieve the figure, then you’ve lost them, and they won’t make the effort required to reach the target.
2. Next, list how many average sales your business would need to achieve your new annual sales target.
3. To get an approximate understanding of what your average sales figure is, let’s use this simple formula:
Combine the value of your last 20 sales, then divide the total by 20. Use the figure you are left with – it’s approximate but usually quite accurate.
4. Divide the number you wrote down in step 2 by 12 to calculate your monthly sales target.
5. Divide the number you wrote down in step 2 by 52 to calculate your weekly sales target.
As with all targets, these must be monitored frequently and if you are beating or meeting your sales target then you already know what to do…continue doing what is already working. You may also need to adjust and re-set targets if the market changes caused by an unforeseen outside influence.
7 quick tips for setting sales targets
1. Why were the activities chosen? Was it because your competitors are using this method of marketing and therefore you consider you must copy? What if this isn’t working for your competitor but they fail to analyse and understand this? This would then be seen as an unwise tactic and either requires a complete re-think or simply stop using this method of marketing.
2. What is the idea costing either in cash or labour? It may be wiser to utilise this resource elsewhere to grow what is working well. However, you shouldn’t give up on a lame duck too soon, in case you can find a way of making it work and achieve sales from it.
3. Study the possible reasons why the marketing method isn’t working. Is it aimed at the wrong audience, is it showing at the wrong times, is there insufficient circulation to reach your target audience? It could be that it isn’t seen enough to register in the mind of your prospect. Should your marketing be bigger, bolder, have a different message, different graphics? In other words, you need to test variables as you never know what works.
4. Are you asking your target market to do something they may not agree with? Depending on what you are marketing and where this is advertised, it could be that the course of action you want them to take does not sit well with them. Maybe you are asking them to telephone your office? In other words, what are the potential barriers this method of marketing is placing between the next course of action you desire and the prospect? Note the barriers and begin removing them. Think as a potential buyer rather than a seller. Buying decisions are emotional and therefore what emotional messages, good and bad, are you sending or planting in the mind of your prospect? Are these messages creating a buying barrier or removing one?
5. Are you writing those kinds of adverts where you are merely saying “Hi, we’re here. Please visit us!” There are so many adverts in magazines, the internet etc where you are merely saying your name and virtually nothing else. Have you thought of giving your reader an incredibly good reason why they should take the next step? How about making an irresistible offer that really entices them to step forward without there being too great a risk to them?
6. Are there methods of marketing you are not using that may provide a better return compared to the poor performers? Your list should help you identify what these may be. Sometimes you merely need a second stage with what you have, and it begins to work e.g. you send out a letter to prospects. No doubt the letter can be improved. A second stage could be an invitation to a hidden page on your website that is not visible without a link in your letter. This second stage could have more information, a unique offer or something that engages the prospect with your business.
7. Your marketing should be sending the same messages to your target audience. Are these messages tested? What have you done in the last six months to test other messages? You should never consider you have the most optimised marketing. This means it’s working at the highest level. There is always a tweak here and there and one word can sometimes be the difference between good and great responses. So, always test, even with marketing that appears to work well. Occasionally a good performing marketing piece can transform into a super-charged sales engine, but this can only be achieved through testing.
Unrealistic sales targets
Whenever two parties transact, one must take a risk, usually with their hard-earned money. Therefore, the buyer is cautious and looking for signals to convince them that your product or service is ideal for them. It’s got to tick so many boxes and give the buyer the feeling that you are a highly trusted business to transact with. So how are you going to achieve this? One of the ways is to ensure you create a system that provides some form of guarantee that the buyer is protected.
It would also help to provide as much confidence as possible that what you supply is reliable and that many other people, like the prospect, have already bought from you and are getting the results they desired. How do you achieve this? You use case studies and testimonials. This says so much to a potential buyer. They can read story after story to help them receive confirmation from a third party that you are a good business to buy from.
My final tip is to ensure your marketing and sales team use a systemised, formulaic approach to selling. When you systemise, it is easier to replicate. If your sales system is ad-hoc, then how on earth can you achieve consistent results? I’ve said this so many times in the numerous articles I’ve written – you must innovate, and you do this through testing. Always question your marketing and sales system and test different approaches. You never know whether your tinkering will achieve the desired results, but it is better to test or tweak everything in your sales formula, a stage at a time, rather than leaving your results to hopeful changes in the market.
How to achieve sales targets in retail
How to drive extra sales in times of low demand: 13 Tips
Every business has periods of low demand, depending on the seasons, the day of the week, and sometimes even the weather on the day. So how can you anticipate this ahead of time, and create extra demand with your marketing to top up your sales?
These 13 ideas will help you to get ahead of periods of low demand.
- Begin by looking for a pattern in your dips in demand, by reviewing sales over the last three-to-five years. When are sales typically very good, and when have you seen a dip in demand? Can you forecast when the next likely dip will be? Use this data to create a demand forecast, then develop your marketing plan to support accordingly.
- Experiment with multi-product offers such as the classic “buy one, get one free” device. This will help you to shift stagnant inventory whilst giving extra value to customers.
- Vary your PPC budget depending on likely demand – you may wish to spend more on branded keywords at times when you predict sales will be lower, to increase the likelihood of conversions, then when sales recover consider diverting more spend to non-brand keywords to increase brand awareness and grow your audience. A segment of the budget dedicated to retargeting will help you to convert those who have already visited your website. Plan your PPC campaign content accordingly – if you’re a restaurant and one of your top sellers is al fresco dining, then a campaign for this will obviously get more conversions in warmer months.
- Create a loyalty program which rewards your existing customer base and encourages additional purchasing.
- Reach out to former and existing customers via your email database, with a special offer or information about a new product or service. Existing customers are usually more likely to convert than a new audience, so in times of low demand, this is a good marketing avenue to focus on.
- Consider seasonal pricing. Varying pricing depending on the time of year works for some businesses to buoy up demand.
- Social media advertising is a targeted and cost-effective way to expand the reach of your marketing message. Within the targeting parameters, you can specifically show your ads to your competitors’ followers – a great way to reach a relevant new audience.
- Create a recurring weekly or monthly offer to top up your sales – for example, a restaurant that regularly experiences low demand during the week might like to trial offering complimentary glasses of wine with meals booked midweek.
- Create a special offer pop-up for your home page, such as a limited time discount. Not only will this increase the likelihood of your web visitors converting, but it will also help you to measure the effectiveness of your website as a conversion tool.
- Create events to drive interest and awareness, and to give you something new to talk about to your audience. Periods of lower sales are the perfect time to hold events as you and your staff will be freer to manage them operationally. You could even ticket the events and turn them into revenue drivers themselves.
- Explore local partnerships and see if you can build on these to create new offerings for your customers. Look at your typical customer profile to assess their other likes and needs – for example, shopping, beauty, cars, gaming – and use this to inform new partner outreach. For example, a bakery with a customer profile that likes events might want to look at collaborating with a nearby venue to deliver an event such as a bread-making workshop.
- Create packages that deliver extra value to your customers. Rather than relying too heavily on discounting stock to shift it, seek to add value by packaging items or services together.
- Upsell at the Point of Sale – as every little extra revenue helps.
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