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Sales targets: Challenging but achievable !

Target setting is mostly a negotiation process across sales managers; often subjective with little data involved. However, adjustments to individual territory targets are not allowed and there are no clear rules and no clear ownership of the target setting process. Target setting process is too time-consuming process and deadlines are missed frequently. Sales target are not well managed and create perception of mid way game changing. Target setting process is a black box. Sales representatives do not understand how their targets are calculated and that is the major challenge.

Target setting process should be:

  • Simple and painless
  • Formula Driven
  • Not time consuming
  • Be inclusive and participative
  • Be open and transparent
  • Make the most of the data available in the LOC

Setting of sales target should be to

  • Motivate individual performance
  • Set expectations
  • Engage the sales force
  • Offer similar earnings across sales representatives
  • Support brand priorities and business objectives that drive results
  • Minimize financial risk
  • Minimize attrition rates

The typical target setting process has three steps

  1. Define annual national sales team target by adding a level of stretch to the LOC budget
  2. Use a formula to split annual national sales team target into individual territory targets
  3. Use historical data to split annual targets into monthly target


Incentives are intended to motivate for additional effort: if targets are being smashed sales representatives relax and if targets are too high sales representatives give up. So it is important to allow for mid way adjustment. Flexibility is important to our business and we, as a company, reserve the right to amend, update and revise the sales targets.

For more information, please contact [email protected]

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