The SMART Targets in Pipeline Management

The Seven Steps of Pipeline Management #1:

How to set your sales target correctly

A sales pipeline is a summary of all sales opportunities that a sales person, business unit or company is pursuing with the aim of closing deals. A more detailed definition of the pipeline and a classification of its meaning can be found in this blog.

You can also read here which information you list in the pipeline and how you can identify the relevant opportunities based on the probability of success.

So now you know the basics and understand that pipeline management is important for your business. In the current blog series, we look at implementation in seven concrete steps.

The first step concerns the target setting. Carrying out all efforts in a goal-oriented manner and having a plan from the beginning increases efficiency enormously and also enables you to better self-reflect and learn more.

So the first task is: Know your sales target.

The SMART formula is widely used for this purpose and has meanwhile established itself in the definition of targets. The letters of the acronym each represent a characteristic that perfect target must have.

  • Specific
  • Measurable
  • Achievable
  • Relevant / Reasonable
  • Time Bound

You can consistently include the specified, time-related measurability in the development and definition of your target.

This means that you do not simply want to "sell more and optimise cold calling", but rather, for example, aim for a 20% increase in customer volume. Or you can specify the goal of "better relationship management", which you then measure in terms of sales per existing customer. In this context, you set concrete time frames (e.g. one fiscal year, one quarter, etc.).

There is disagreement about the letter R, so two meanings are attributed to it. The reasonable and justifiable choice of targets should promote motivation. At the same time the relevance for your company and your corporate strategy is decisive. Pursuing goals only makes sense if they also move you forward.

The last factor, accessibility, however, also depends on several external circumstances. You do not have full influence here and can only estimate the accessibility as accurately as possible. Decisive factors can include the following:

  • Market relevance + position of your product
  • Maturity + market saturation (timing)
  • Intensity of competition
  • Cost structure of your company + suppliers (dependencies)
  • Your CEO's ambitions

Therefore, when setting goals, include external factors that may influence you.

However, do not set your goals too low, otherwise you will miss opportunities and growth potential! An optimistic approach usually pays off. However, think realistically and leave room for probable external circumstances and hurdles.

In addition to acquiring new customers, exploiting your existing relationships is a promising approach to optimize your business, expand your business and thus increase your profits.

You can already find various tips for your relationship management. For this, consider the characteristics of an ideal account manager and follow the 10 commandments I have already described in the communication with your clients. You will also learn in my blog how to maintain your account properly and stay up to date. Furthermore, you will learn the difference between Price Clients and Relationship Clients and how to convince with articulated or implied knowledge.