How Working Backward Helps You Achieve Sales Goals
Learn why working backward can help you develop a sales strategy that is sure to meet your goals.
January 31, 2014
Did you know that January 31st is backward day? There are no instructions for backward day, so you can celebrate it however you want.
You can wear your shirt backward (probably not comfortable), drive to work in reverse (probably not legal) or start each conversation by saying goodbye (probably not bright).
Perhaps a better way for sales professionals to celebrate backward day is to think of it in terms of sales goals. Now sure, the New Year is already upon us and you probably solidified your 2014 sales strategy months ago. But now is a perfect time to stop, take an in-depth look at what you’re doing, analyze what’s working and create a plan based on the insight you unearth to ensure you exceed your sales goals this year.
You’re no doubt busy, so why do this now? Your sales goals are too important to simply work blind and hope.
Here are three steps you can take right now to develop a sales strategy you can believe in.
1. Start by determining your ultimate goal
This is the easy part, since you probably already know your annual sales goal.
For example, my sales goal is $385,000.
Now work backwards. What will it take to get there? i.e. 100 sales at $3,850.
What was your average sale last year? If it’s higher, then you need less. If it’s lower, you'll need more.
By breaking down the larger goal into smaller pieces you can outline an approach and track success on a week-to-week basis, allowing for course corrections if you get off track.
2. Determine your closing ratio
Once you have your ultimate sales goal in mind, look at historical conversion ratios to determine how to reach it. Be sure to take your pipeline coverage ratio into account as well. This is how much you traditionally need in the pipeline at the outset of each month to reach quota.
The industry standard is a 3x sales pipeline-to-quota ratio, however yours may vary. If you haven’t tracked this ratio, you’ll love tracking it going forward because it’s vital to understanding how to achieve your goals. When you focus on your pipeline coverage ratio, you will also naturally focus on maintaining an accurate, realistic pipeline.
Again, your specific situation will vary but the bottom line is this: you need to have an accurate assessment of what your pipeline needs to look like at the outset of each month in order to exceed quota.
3. Take a detailed look at your sales activity
Generating this report will tell you how efficient your activities are, or how your activities are converting. This will help you in two ways:
- You will know which activities you should dedicate more time to.
- You will know how many of these activities you need to perform to reach your goals.
Let’s assume that, on average:
- For every two qualified prospects in your pipeline, you close one.
- For every two meetings scheduled, you get one qualified prospect in your pipeline.
- For every two connection requests, you schedule one meeting.
This means that, on average, making eight connection requests will get your four meetings, which will yield two qualified prospects and one sale. Do the same math for all your sales activities.
Now you have the information you need to review your sales strategy and ensure you are moving forward toward success. All you have to do from here is follow the advice of Vince Lombardi and “plan your work and work your plan.”
Learn how LinkedIn Sales Navigator can provide you with the high-value prospects and planning tools that add credibility to any sales strategy.