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Issue #12 · created by jack edison


How to Set Sales Targets for Your SDRs & Determine Your Return on Investment

I recently had a conversation with the BDR Manager and she said something that the entire Inside Sales team is feeling right now: the game is evolving rapidly, and it's a challenge to keep up. [I'll stop now before you stop nodding your head.] Although you have to evolve your style to stay in the game, the basics don't change. As far as basics go, we advocate a very simple approach to mastering sales: mindset, method, and skill. Master these, and you are the sales equivalent of a four black belt. When we talk about method , an essential component is the activity level. that is, your team

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you have to maintain a certain level of activity to give yourself the best chance of success.
This allows for rapid skill development, constant feedback loops for instruction and improvement, and more opportunities to succeed. In other words, the right level of activity means you have a chance of how to achieve sales, revenue, profit, or return on investment goals .
In the words of the great basketball coach, John Wooden:

In my training , I tell every player under my supervision that the outcome of a game was simply a by-product of the effort we made to prepare. They understood that our destination was a successful journey – that is, total, complete, and detailed preparation.

There's one more thing you should know about activities: they're tangible. Your SDRs may not know how to direct $950,000 of additional revenue, but they definitely know how to make 50 calls and send 50 emails every day.
Your SDRs don't act on revenue or meetings, but they can take coordinated and constant actions in daily activities. In this context, how to establish sales goals?
You need to translate your goals into activities. There are three main ways you can approach this, and each one answers a slightly different question.

How To Set Sales Goals: The 3 Questions You Must Answer

Defining daily and weekly activities for SDRs

Question: How many daily activities do my SDRs need to meet their meeting goals, and for me to meet my revenue goals?
This is one way on how to set sales goals.
By the way, this is a gold standard. Going back to the “method” part of the sales domain, setting daily and weekly goals is something your SDRs really can do and follow without help. There is no mystery.
Serena Williams had a big goal in mind – to win Winbledon, or the US Open – but she couldn't do just that. To become the best tennis player who was ever born, she had to train first. And she couldn't train by winning a big championship.
Instead, she practiced right, left, and drop shots. She practiced foot movement and serve. She trained her reaction time to serve opponents, and she improved her conditioning. She understood the skills and activities needed to stand a chance of winning Wimbledon.
Your SDRs are no different. There is no way to reach sales goals without daily and weekly activities.
Using the activity-based approach, she tells them what they must do to succeed, and tells them what they must do to make a million dollars (they can dream, right?). Defining activities also allows you to take care and monitor your critical metrics such as margins, “reply rates”, and care necessary to achieve a yes/no on a proposal.
Here's how to set sales goals using this approach:
This calculation is a little tricky, but it pays off. You can get a copy of our calculator here if you want to respond within 30 seconds. Here's a sample of what it's like:
Description: How to set sales goals

· Define the number of daily and weekly activities you need from your team. You have to do it! Without this, there is no way to meet sales targets.

· Grab your free calculator – email not required – and enter your numbers to find out how many activities your team needs to perform.

· Check your activity numbers against the indicators so you don't demand too much or too little from your SDRs. Julianne Sweat the Outreach.io suggests around 140 activities for d ia , spread over 50 calls, 65 emails, and 25 other activities as "social selling."

· Choose activities daily and weekly. We prefer to define “street” activities, added numbers of proposals weekly, and monthly meeting quotas.

what not to do

· Don't treat your activity numbers as “set it and forget it”. Make a guess about where to set your activity goals, and then check back once a month to see how your team is doing. Make adjustments.

· Don't make daily and weekly activity quotas without an explanation, and don't set unrealistic goals. It's demoralizing if your team fails to achieve its goals.

· Sin by over-setting goals too low. That way you have more room to move forward while building morale and small wins .

Determining ROI by SDR

Question: Based on today's quota, what is the payoff from your SDR acquisition efforts ?
In this approach to setting sales targets, rather than backtracking to a quota, you might be wondering what the payoff is on the quota you've set for your SDRs.
All you need to know to figure this out is your current share, the full cost of your SDR, LTV, gross margin, and the conversion rate from opening meetings to closed opportunities.
Here is an example of how you can configure it:
Description: How to set sales goals

What to do

· Use the Return on Investment by SDR calculation if you are interested in measuring the financial return of your SDR team.

· Put the best numbers you have into gross margin, “LTV”, and kickoff meeting to close (only including past data from your SDR team, no data in progress or from other sources).

· Understand that you will have some inaccuracy in your data, but the tool can help you make realistic “ benchmark ” decisions for your team. This includes the best placed , worst placed, or even providing data on both expanding and hiring your team.

what not to do

· Return on investment is not a good calculation if you are in quick purchase mode. If your strategic mandate is acquiring as many customers as possible, ROI may not be the right calculation for you.

Meetings for the performance goal

Question: How many meetings does an SDR need to have to pay for it, or create a 100% or 500% return?
If you're looking for specific feedback, you may be wondering how many meetings your SDRs need to achieve that. The advantage of this approach is that you can quickly see what it takes to get your SDRs to pay for themselves, and it's also a great tool for hiring decisions.
The limitation of this approach is that it doesn't consider how realistic meeting goals are, so you have to use your opinion here.
Here is a sample of how we set up our calculator:
Description: How to set sales goals

What to do

· Use this calculator if you're not sure where to set your meeting quota, and you want to set a specific return.

what not to do

· As tempting as it is, don't just pick the largest number and make it a must. Your quota should be based on what is realistic so that your SDRs have the best chance of succeeding.

being imprecise is ok

The first time you go through this exercise in setting sales goals, you will be inaccurate. That doesn't mean you're wrong. The opposite - you will have a lot more information than when you started the exercise.
Most importantly, accuracy requires calibration. Start with the best information you have at hand, then check back monthly to see how things are progressing. It's normal to update as you go along, and you might even learn that your Inside Sales team is rocking so hard that you should double your cash in the next 6 months. Amazing!
And you don't want to go to the trouble of putting this calculator together - it's painful, I can guarantee you - feel free to grab a copy of our calculator. Just make a copy of the document and enter your own data to get answers on how to set sales goals.
And remember:

1. Your SDRs cannot act on revenue goals or get meetings, but they can perform daily and weekly activity levels.

2. Define and monitor your activity levels based on your target revenue or desired return. Check monthly to see if they need to be adjusted.

3. Compare your activity goals to performance industry benchmarks to keep them realistic.

4. Practice makes perfect – or at least close to it. Starting with activities ensures an adequate and consistent level of practice on your team.

5. Monitor your performance metrics – conversion rates, “reply and open” rates, “LTV” – so you can be more and more accurate with your activity levels and your income.

Now that you know how to set sales goals, good hunting (and growing)!

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