{"id":9498,"date":"2020-10-14T15:10:03","date_gmt":"2020-10-14T13:10:03","guid":{"rendered":"https:\/\/woodpecker.co\/blog\/?p=9498"},"modified":"2025-01-21T10:16:32","modified_gmt":"2025-01-21T09:16:32","slug":"how-to-set-achievable-sales-targets-for-an-outbound-sales-team","status":"publish","type":"post","link":"https:\/\/woodpecker.co\/blog\/how-to-set-achievable-sales-targets-for-an-outbound-sales-team\/","title":{"rendered":"How to Set Achievable Sales Targets for an Outbound Sales Team"},"content":{"rendered":"

It\u2019s no secret that outbound sales are a numbers game. Prospecting tactics and strategies are important, but not setting clear and achievable sales targets is like jumping in a taxi with no destination in mind; it\u2019s not so smart and it’s simply a waste of money.<\/span><\/p>\n

Today on our blog, we give the stage to Thibaut Souyris, the CEO and Founder of SalesLabs<\/a>, who will tell you how to set your sales goals so they’re ambitious, but achievable.<\/span><\/p>\n

Why is it important to set sales targets for an outbound sales team<\/span><\/h2>\n

If you\u2019ve been in sales for a while, you know that this job is mostly about numbers. From sales targets to commissions, every successful sales organization relies on a set of metrics and specific targets for each one of them. In an outbound sales organization, setting sales targets is crucial as it gives a clear definition of success or failure. If you miss it, you failed, if you reached it, you succeeded. Below is my approach to setting clear, achievable sales targets for an outbound team.<\/span><\/p>\n

Step 1: Clarify your end goal<\/span><\/h2>\n

When I work with customers, I always ask the following question: \u201cHow much do you need to close this year?\u201d And surprisingly enough, most sales leaders or individual contributors come up with a different number. What\u2019s the reason? Well, the metrics that matter to each individual are often different. Here\u2019s an explanation.<\/span><\/p>\n

Booking, ARR, MRR, Revenue; which one should you pick?<\/span><\/h3>\n

The first thing to clarify is the actual company target. Revenue targets are defined at the top of the organization. Shareholders define them yearly, typically based on historical data. These targets represent the expected recognized revenue for the organization on a clear time-period.<\/span><\/p>\n

Once the revenue target is identified, it is passed to the VP\/Head of Sales. That\u2019s where it needs to be converted into bookings, Annual Recurring Revenue, or Monthly Recurring Revenue.<\/span><\/p>\n

Bookings represent the total contract value. They are not always equal to revenues. For example, if you close a \u20ac100.000 contract in December 2020, but this contract starts in February 2021 of the following year, no revenue will be recognized before 2021.<\/span><\/p>\n

Monthly Recurring Revenue is a metric measuring an income a business can count on receiving every single month. If you close a \u20ac100 monthly subscription, you add \u20ac100 of MRR.<\/span><\/p>\n

Annual Recurring Revenue is a metric measuring an income a business can count on receiving every single year. It\u2019s often calculated by multiplying MRR by 12.<\/span><\/p>\n

Now that you know what all these terms mean, which one should you choose?<\/span><\/p>\n

If you\u2019re selling a subscription (typically seen in SaaS), I recommend setting targets in MRR. You will then have a clear understanding of the revenue you add (or remove) every month. If you’re trying to lock customers in multi-year contracts, then ARR makes a lot of sense.<\/span><\/p>\n

Bookings should be used when you\u2019re selling project-based contracts or deals without recurring aspects. Finally, revenues should be used if your reps are responsible for collections (which I recommend not doing).<\/span><\/p>\n

How do you generate opportunities?<\/span><\/h3>\n

A second important point is to list the channels used to generate opportunities. Most organizations rely on a mix, using inbound marketing, outbound sales, and referral, to name a few. Below is a list of typical channels used to generate opportunities:<\/span><\/p>\n