Not sure how to hit your 2011 sales goal? Read on.

I don’t know about you but for me (as a sales professional), starting a new sales year represents challenges, hope, energy, and inspiration all wrapped in one. I love kicking off a new year thinking about all of things I want to accomplish and then implementing the sales strategy and underlying sales plan that will get me there. I suspect all of you have established your sales goals (personal and/or sales quota) to hit this year. If you haven’t than I suggest you figure that out sooner rather than later. But the more important question is, do you have a plan to hit your goal? And do you understand the scope of effort required to reach your goal? Have you thought through what it’s going to take to buy that country club membership, put the down payment on that new house or save $$ for your kids college tuition? Below are few ideas that should help you understand exactly what you will need to in order to have a successful 2011. Assuming you established your sales goal….here is what you need to be thinking about to ensure you will be celebrating your sales goal on December 31, 2011.

  1. What is your current run rate? How much GP (gross profit) are you generating today on a weekly basis? When do those contracts come up for renewal or end? You should know if a contract is going to end at least 30 days prior in order to have an accurate sales forecast and so you can understand when and how your personal book of business will be impacted. The point here is you need to determine how much of your current book of business is going to get you to your 2011 goal. Will your current run rate make up 10% or 30% of your 2011 goal? Once you determine the delta (how much new business you need to develop in 2011 to make up the difference from your run rate) you can move on to step two.
  2. What is your average deal size? This is easy to figure out. Count up the number of consultants you have on billing and look at the hourly GP margins for each. Add them all up and divide by the total. This is your average hourly GP margin. Next, determine the average number of hours in a contract. Multiply that number by your average hourly GP number. This is your average deal size in Gross Profit dollars.
  3. What is your closure rate? Look at the total number of job orders put into your system in 2010 and divide by the number of job orders you filled. This is your sales closure rate. Industry average is around 30% or 3 fills out of 10 job orders.

Let me stop for a second. Let’s assume my goal is to generate $500K in GP-All from New Business Development. My average deal size is $28,650 in GP dollars. And I close 1 out of every 6 job orders. What this means is I will need to close 17.5 deals in 2011 in order to reach my goal. Sales Activity Planning Remember the delta I mentioned above…the difference between your current run rate (book of business) and the amount you of business you will need to generate from new business? Determine your delta and apply the following Determine how much sales activity you will need to generate in 2011 in order to make up that delta. The good news is I have done the work for you. Here is what I have found from my 15 years of selling in this industry.

  1. For every 35 phone calls (cold calls) we make, we reach one hiring manager who we speak with for at least 5 minutes and properly qualify and add to our CRM system(this is important, so be honest with yourself)
  2. For every 6 new prospects we add to our CRM system, we receive 1 new job order (if you do better than this, great. But again, be honest with yourself)

Back to My Fictional Scenario. Based on my sales closure rate (1 out of 6), I need 100 new job orders in order to close 17.5 new deals. Based on my averages above this means I will need to add 600 new prospects to my CRM system. And in order to add three new qualified prospects to my CRM system (600 for the year) each day that means I will have to make 105 calls per day (1 qualified manager for every 35 dials). Here’s the kicker…..I need the $500K in GP to be RECOGNIZED REVENUE in 2011. This means I need my consultants billing ASAP, in order for their billings to hit the books. And don’t forget to factor in the length of your average sales cycle which probably in the neighborhood of 10-23 business days. Know Your Ratios. Your ratios (closure rate, call-to-connect rate, etc) may differ from what I have outlined here.

The point is that you need to know your ratios. I can assure you that Tiger Woods knows how many greens he hits in regulation and that A-Rod knows his on base % and slugging %. Sales professionals are no different. Know your ratios! If you are anything like me, you will find that doing this work and figuring this stuff out is actually liberating. It feels good to know exactly what you need to do on a daily basis in order to reach your goal. Going through this exercise actually allows you to hold yourself accountable. That is a powerful thing. And if you don’t think this exercise -figuring out your goals and having a plan to hit your goal- is worth the time than you might need to consider whether sales is the right profession for you. Best of luck in 2011!

This Bullhorn Blog post was written by Dan Fisher, Managing Director of Menemsha Group, a Boston sales training and consulting organization. To learn more visit or email 

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