Having a target, the RIGHT target, is critical to business growth.

What will you learn from this Article

  1. How big your Sales Pipeline Should Be.
  2. How Making sales quota is not on luck.
  3. How today’s action will yield compensation next year.
  4. By making true assessments and calculations you know exactly where you are
  5. Make necessary changes in course, as required to reach your target

Or you can read about


As sales people, we often struggle with knowing how many deals to close in order to make the numbers that the business requires from us. I will introduce you to how I manage sales people and their capabilities in order to meet the target number they require. It is very difficult as a salesperson when you are in the mud, to figure out how to get out of it. It’s much easier when you take this approach at a macro view.

First, let’s collect some numbers.

I will walk you through all of the variables that will get you to your target number for next year, or any number you wish to achieve next year.

Often, making target numbers or achieving stretch goals is dependent not on luck, but the actions that we take today to yield us the compensation that we will get next year.

WARNING: What follows is dedicated to super sales people and rainmakers. If you wish to be an order taker, you don’t need to read on, but if you want to blow your numbers and make more numbers than you ever have before, continue reading.

A: How many deals have you closed in the last 24 months?
B: How many deals is the average person closed in the last 24 months?
C: What is the average size of a deal in your company?
D: What is your quota for next year?
E: How many deals have you chased, won or lost in the last 24 months?
F: Out of those deals, how many have you closed?
If you take A and divide it by B the answer will let you know where you are in your performance index compared to your company. Therefore, if you had 10 deals and the average company was 11, you are running a 90% performance compared to the 100% average, or 10% below average of where you are.

If you take C, the average company deal size, and you divide that by your quota, you will get what size deal you are looking for.

If you take E, the number of deals you chased, divided by the number closed, you will get your closing percentage.

If you take your quota, which would be D times I, (I = F divided by E), this will give you a pipeline that you need to have this year. If D, your quota, is 10 million dollars and H, the average size of a deal is $500,000, you know that you need to win K – must win deals – 20 deals, since your closing ratio, (I times K) will give you how many deals you must chase. Therefore, if you need to chase 60 deals to win 20, how many meetings, events, rolodex clients, networking and referrals do you need?

Here is a slide presentation and examples to explain the formula

[slideshare id=15093073&doc=settingyourtargetonnextyearssalesquota-121108204808-phpapp02]

“This formula will target your Salespeople and change the career for ever, actually make them in to rainmakers for your company”… Bill Glass

“Spend some time figuring out the potential meaning behind this formula, and the conversation with the sales team will be completely different from now on”… Gary Jensen

That last piece I cannot help you with as it is very sensitive to the business that you are running. Also, understand the last variable. Depending on where you were on your performance index, letter G, which was made up of A divided by B, you will have to see how much better you want to be than the pack. For example, if G was 90%, meaning that you were 10% below the average, you will need to add that to all of you numbers to improve your performance.

By making true assessments and calculations – knowing exactly where you are at a particular point in time, you can then make necessary changes in course, as required to reach your target and go forward with confidence.

If you need help with my formula or applying it in your business let me know and we can walk thru it together…

Here is Bonus for you!

Also I am sure you your next question is “Hey, How do I get clients to convert in to deals”. So read our next article New Clients Needed! 10 Strategies for Where to Find New Customers”  will show you how….

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