How to figure out setting goals


In business, as well as in life, you need to set goals to keep your ambition and focus clearly defined with a path of action. Simple enough, right? Well if the sheer thought of setting a business goal or measuring those goals gives you a case of the "I don't wannas," don't worry. I'll break down the basics of setting goals and how to take action once those goals are set to help you get started.

First, you need to know your opportunities, appointments, or calls number, how to calculate a closing rate, and how to figure an average ticket.

  • How to calculate a closing rate: Compare how many appointments you actually went on in a week versus how many you closed in that given time.

EXAMPLE: If you ran 10 calls in one week and you got approval to do the work on three of those calls, you would divide those two numbers (Three divided by 10) to receive a 30% close ratio. 

  • How to figure an average ticket: Add up all of your sales for any given period and divide them by your calls or opportunities and that will give you an average ticket.

EXAMPLE: If you sold $10,000 in products and services and attended 10 calls in one week, your average ticket for the week is $1,000.

Next, you can start setting your goals. Start by looking at the inverse of your closing rate. If you closed three out of 10 sales that means you lost seven out of 10. Use this number in combination with your average ticket number to help you set the basis of your goals.

Then, follow my five-step process for setting goals.

  1. Understand that what gets measured gets results. For example, if you measure your sales closing ratios or average tickets, you can more accurately set goals and improve your numbers.
  2. Believe in the goal and take responsibility. How much can you sell next month? Next quarter? Next year? Create a goal that you can believe in and take ownership of it so that way the goal doesn't seem so daunting that it will be too hard to achieve.  
  3. Create an action plan.  Create a detailed plan of what you need to do on a daily, weekly, monthly, and annual basis to achieve that goal. Sales is a numbers game, so run the three main sales numbers (opportunities, closing rate, average ticket) a number of ways to get an idea of how you can achieve your goals based on those variables.
  4. Create a "how" plan. How do you plan on running the number of calls needed to hit your goal, regardless of outside factors that could be used as an excuse, like the weather or the economy? Identify training, tools, and resources you are going to need to efficiently achieve your goals. 
  5. Measure and track everything consistently. Compare the success of your week, month, or quarter to your action plan to see where you are achieving your goal and where you are falling short. Use this information to determine what your next steps are to get back on track, or to continue your success and momentum.

When it comes to setting goals, make sure you are looking in a mirror, not a window, for real accountability and ownership, instead of excuses for why your goals are not being achieved.  Also, remember that sales managers should not be setting the goals, but checking in to ensure the resources and tools are available to effectively achieve the goals of each individual.

Michael Goater is a residential HVAC installer turned sales trainer for HVAC Learning Solutions. His motto is, "no one said it would be easy, but everyone says it's worth it."


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