How To Create A Sales Plan To Reach Your Targets

Having an annual sales target can provide direction to your sales team.

However, it’s important to make sure that your sales target is realistic. Otherwise, you might set your sales team up for disappointment. Missing the target can be demotivating!

You also need a plan for reaching your sales target. What do your salespeople need to do every day, week, and month to ensure that they stay on track throughout the year?

Today we are going to discuss how to set a realistic annual sales target, break it down to quarterly sales targets, and create a detailed plan that your team can follow.

We will also share the sales strategy that we used to grow our company from zero to $100M+ in annual revenue and explain how you can implement it in your business!

Table of Contents:

Should You Be Setting Sales Targets to Begin With?

Okay, so before we get into our main subject, we want to encourage you to ask yourself: should you be setting sales targets to begin with?

We would argue that if you are just starting out, setting sales targets not only doesn’t make sense but can also be counterproductive and stunt the growth of your business in the long run.

This may be somewhat controversial but hear us out…

Why Setting Sales Targets Doesn’t Make Sense for Early-Stage Businesses

If you just launched your business, you don’t have any historical data.

This means that you have no idea:

If your offer resonates with your target audience
How much cold outreach you can realistically do
What your conversion rates are going to be
What seasonal fluctuations you should expect
What year-on-year growth is going to look like

And that’s just the obvious stuff.

There are also the “you don’t know what you don’t know” type of issues that you cannot foresee because you lack the experience of running a business like that.

This applies to all types of businesses but it’s especially relevant to startups that have an innovative product or service.

Say, if you want to open an Italian restaurant, then you at least know that people like going to Italian restaurants, the question is how to run one at a profit.

But if you have some crazy startup idea that has never been done before then you don’t even know if there’s any demand for it to begin with.

Setting sales targets doesn’t make sense in both situations because neither the aspiring restaurantier nor the innovative entrepreneur has any historical data on which they could base their assumptions.

But it’s especially ludicrous in the latter case because the entrepreneur hasn’t even validated the basic concept behind their business.

“Setting sales targets” may sound like something that you should be doing but if you have a brand new business, it would simply mean pulling a completely arbitrary number out of thin air.

But that’s not a legitimate sales target because it’s not based on historical data. It’s a random number that you came up with because it felt right to you. It has no connection to reality, you literally just made it up. What was even the point of doing that? 🧐

How Setting Sales Targets Too Soon Can Stunt the Growth of Your Business

We would argue that you shouldn’t set sales targets until you find a product-market fit. Why?

Because setting sales targets prematurely can stunt your company’s growth in the long run.

Sure, if you have a “meh” product that people are lukewarm about but still buy, you can focus on selling it. This approach will make you more money in the short term.

But you’d be better off focusing on creating a “wow” product that people are amazed by instead instead. This approach will make you more money in the long run.

Of course, you need to generate enough revenue to keep the lights on but beyond that, it’s wise to prioritize long-term growth, even if that means leaving some money on the table for now.

What You Should Do Instead of Setting Sales Targets

If you haven’t found the product-market fit yet, your priority should be finding it.

This means iterating your product based on market feedback, talking to your customers and experimenting as much as you can.

You’ll know when you find product-market fit because the growth of your business will start rapidly accelerating.

That is when you should start setting sales targets, pursuing them aggressively, and scaling your business!

How to Analyze Your Historical Data

Let’s say that you have a ton of historical data. How can you set a realistic annual sales target?

You want to start by analyzing:

Cold outreach numbers
Conversion rates across the entire sales pipeline
Salespeople time spent at each stage of the sales pipeline
Specialist employee time spent on the average customer
Customer support time spent on the average customer
Seasonal sales patterns
Year-on-year growth

Let’s take a closer look at each of these:

Cold Outreach Numbers

How many cold calls do your salespeople make per day on average?

Conversion Rates Across the Entire Sales Pipeline

What is the:

Cold call to discovery call conversion rate?
Discovery call to product demo conversion rate?
Product demo to sale conversion rate?

Salespeople Time Spent at Each Stage of Your Sales Pipeline

How much time are your salespeople spending on:

Cold calls?
Discovery calls?
Product demos?

You want to work out the average number of hours they are spending on each of these activities daily, weekly, and monthly.

Specialist Employee Time Spent on the Average Customer

How much time do your specialist employees need to spend on each customer?

Say, if you are selling a product that requires a specialist employee to go on-site and install it, how much time does the average installation take?

(This only applies to products that require providing some sort of service as well as a part of the package.)

Customer Support Time Spent on the Average Customer

How much customer support time does the average customer require?

And how much does that work out in terms of customer support agent compensation?

Seasonal Sales Patterns

What seasonal patterns can you observe in your sales data?

Some of them may be obvious, especially if your business is seasonal in nature.

But see if there are any less obvious fluctuations that you should take into account when setting sales targets (e.g. maybe sales drop every year in July but you aren’t sure why).

Year-on-Year Growth

How has your year-on-year growth been so far?

If you have only been in business for a few years, you only have a few data points here but it can still give you some idea of the trajectory you are currently on.

How to Set a Realistic Annual Sales Target

More Cold Calls -> More Sales?

Let’s assume that your conversion rates are going to stay the same in the foreseeable future.

In theory, if your salespeople increase the number of cold calls they make every day, that should lead to a corresponding increase in sales.

More cold calls -> more discovery calls -> more product demos -> more sales.

In practice, though, it’s not that simple. You need to take resource and infrastructure constraints into account.

Resource Constraints

If your salespeople start making more cold calls…

They will also need to spend more time having discovery calls and doing product demos – Where will that time come from?
Your specialist employees will need to spend more time serving customers – Where will that time come from?
Your customer support team will need to spend more time providing customer support – Where will that time come from?

You should start addressing these resource constraints by streamlining various processes so that everyone could use their time more effectively.

It’s astonishing how much time can be saved by putting systems, automation, and standard operating procedures (SOPs) in place.

Then, you might want to consider hiring more specialists and customer support agents to help your company handle the increased workload.

Infrastructure Constraints

You also want to consider whether your business infrastructure can handle a significant increase in sales.

The exact details are going to depend on your business model but you need to make sure that your infrastructure can support the growth you are aiming for.

Play With the Numbers to Find the Right Sales Target

Ultimately, setting a realistic sales target is a math problem so you need to play with the numbers to see what’s possible.

Say, if your salespeople are currently making 100 cold calls a day, see what would happen if you increased that number by 25%, 50% or 100%.

Make sure to account for all downstream effects that you can think of.

Of course, nothing is certain, you are operating on assumptions. But if you had enough data and did a good job analyzing it, your assumptions should be pretty reasonable.

Once you explore various possibilities, choose an annual sales target that is ambitious but also realistic.

You need to be able to see a clear path from where you are now to where you want to be in a year!

How to Break Down Your Annual Sales Target Into Quarterly Sales Targets

Once you have your annual sales target, you should break it down into quarterly sales targets that you can then use as progress benchmarks throughout the year.

If you intend to increase cold outreach gradually, you should make sure that your quarterly sales target reflect that.

Also, if your business is subject to seasonal patterns, you should take that into consideration as well when setting your quarterly sales targets.

Once you have your quarterly sales targets, schedule time at the end of each quarter to review them with your sales team.

How to Set Daily, Weekly, and Monthly Cold Outreach Goals to Help Your Sales Team Meet Quarterly Sales Targets

Now that you have your quarterly sales targets, you can create an action plan designed to help your sales team meet them.

We recommend setting daily, weekly, and monthly cold outreach goals for your salespeople.

You should also schedule time every day, week, and month to review those cold outreach goals.

These reviews will help your salespeople keep themselves accountable, immediately notice if their performance is slipping, and course-correct ASAP.

When the time for a quarterly review comes, ask yourself these two questions:

Did your salespeople meet their monthly cold outreach goals?
Did your sales team meet its quarterly sales target?

If the answer to both questions is yes, that’s an indication that your strategy is working. Your sales team is on track to reaching its annual sales target.

If the answer to the first question is yes and the answer to the second question is no, you need to reassess your strategy. Why isn’t it working as you hoped it would?

Discuss this with your salespeople, analyze the data, and reassess your initial assumptions. You need to figure out what went wrong. Once you do, adjust your strategy accordingly.

It’s also worth noting that you should evaluate your salespeople’s performance by whether or not they achieve their cold outreach goals, not by whether or not the team meets its quarterly sales targets. Why?

Because the former is entirely within their control while the latter isn’t. The number of sales someone makes in a given time period can be influenced by all kinds of factors that are completely out of their hands so it would be unfair to judge them based on that.

Make it clear to your salespeople that what matters is achieving their daily, weekly, and monthly cold outreach goals and remind them that they are in complete control of how many cold calls they make each day. Success is within their reach!

How to Scale Sales With Sales Funnels

Scaling sales by scaling your sales team is possible but it’s not the best way to go about it. Why?

Because of these three reasons:

Hiring, training, and managing salespeople are all resource-intensive tasks that require a tremendous amount of time, energy, and money.
Salespeople are human – They need to sleep, eat, and have a life outside of work.

Realistically, you can expect to get eight hours of work per day from each salesperson, five days a week.

This means that you will eventually hit the work capacity limit of your current sales team and will need to hire more salespeople if you want to continue scaling sales.
Salespeople can quit at any time – This is a problem for you as a business owner considering the aforementioned investment of time, energy, and money that you need to make in order to build an effective sales team.

All that makes scaling a sales team a slow, arduous endeavor that requires a lot of trial and error.

Fortunately, there’s a better and faster way to scale sales: building a Value Ladder sales funnel and then driving traffic to it!

What is a Sales Funnel?

A sales funnel is a system designed to convert visitors into leads, leads into customers and customers into repeat customers.

The core sales funnel structure looks like this:

Top of the funnel: target audience
Middle of the funnel: leads
Bottom of the funnel: customers

Sales pipelines and sales funnels are similar concepts. So what’s the difference between them?

The former can be completely manual: you can simply pick up a phone and start calling people.

The latter is always either completely or partially automated. We will discuss this in more detail later.

The Value Ladder Sales Funnel

Our co-founder Russell Brunson created the Value Ladder sales funnel that is based on a simple idea: gradually building trust with the people in your target audience.

Here’s how it works:

You convert potential customers into leads by offering them a free product or service in exchange for their email addresses (the Bait stage).
You convert those leads into customers by pitching them an inexpensive offer designed specifically for that purpose (the Frontend stage).
You convert those customers into repeat customers by pitching them a more expensive offer (the Middle stage).
You then pitch those repeat customers your most expensive offer (the Backend stage).

This gradual progression from your least valuable and least expensive offer to your most valuable and most expensive one is the best way to structure your sales funnel because it allows you to gradually build trust over time.

And trust is what it’s all about the more someone trusts you, the easier it is to sell them your products!

For example:

Russell wrote a best-selling book about sales funnels called “DotCom Secrets” (you can get it for free by the way).

He then created a “DotCom Secrets” Value Ladder:

Free quiz – where the potential customer can do a short quiz.
Free + shipping book – where the potential customer can get a physical copy of “DotCom Secrets” for free if they agree to cover the shipping costs.
Invisible funnel webinar – where the potential customer needs to provide their credit card details upfront but can attend the webinar without paying. They pay for it only if they feel that they got enough value out of it.
Home study or event – where the customer can purchase an online course or access to a pre-recorded webinar so that they can study the material in their own time.
Inner circle membership – where the customer can join an exclusive, application-only mastermind and get access to Russell.

There’s also a subscription offer – our funnel building software – that runs through this entire Value Ladder from the Free + Shipping stage onwards.

So it all starts with a free quiz and eventually progresses to an exclusive mastermind where memberships cost between $50,000/year and $250,000/year.

The Dotcom Secrets Value Ladder diagram.

Russell is widely recognized as one of the top sales funnel experts in the world so having access to him can be incredibly valuable for entrepreneurs who want to grow their businesses using sales funnels.

But people would think that he was insane if he approached them out of the blue and said “Hey, want to join my mastermind? It’s $250k/year!”.

However, inviting potential customers to do a free quiz and then gradually building trust with them over time allows him to eventually persuade some of them to join his Inner Circle.

In fact, there’s so much interest in these masterminds that he had to restrict the $50,000/year tier to 100 people, the $150,000/year tier to 14 people, and the $250,000/year tier to just 6 people!

Do you see how powerful the Value Ladder sales funnel can be?

Completely vs. Partially Automated Sales Funnels

As we have already mentioned, sales funnels can be either completely or partially automated. What does that mean?

Completely Automated Sales Funnels

Here’s how a completely automated sales funnel works:

You drive traffic to your lead magnet landing page with various digital marketing strategies.
You convert those visitors into leads by persuading them to give you their email addresses in exchange for your lead magnet.
You convert those leads into customers and repeat customers by pitching them low-touch offers via automated email sequences.

Partially Automated Sales Funnels

Here’s how partially automated sales funnels work:

You drive traffic to your lead magnet landing page with various digital marketing strategies.
You convert those visitors into leads by persuading them to give you their email addresses in exchange for your lead magnet.
You convert those leads into customers and repeat customers in one of two ways:

a. By pitching them a low-touch offer and then following it up with a pitch for a high-touch offer where you encourage them to book a free consultation with you.
b. By pitching them the high-touch offer right out of the gate and encouraging them to book a free consultation with you.

Should You Build a Completely or Partially Automated Sales Funnel for Your Business?

There’s no right or wrong answer here:

Completely automated sales funnels are easier to scale but you may not be able to sell high-end products and services that way.

Realistically, $2,000-3,000 will probably be the upper limit of what you can charge for low-touch offers. You can still make a LOT of money that way, though!

Partially automated sales funnels are harder to scale but they can help you sell high-end products and services.

Also, in some industries, complete automation may not make sense so that’s something to take into consideration as well.

Our Story: How We Used Sales Funnels to Grow Our Business From Zero to $100M+ in Annual Revenue

When Russell and his co-founder Todd launched ClickFunnels back in 2014, they knew that they had to figure out how to grow their business fast. Why?

Because they bootstrapped it with their own money without taking any outside investments.

This meant that they didn’t have a pile of venture capital that they could burn while meandering their way into profitably. They needed to start generating profit ASAP!

Fortunately, this wasn’t their first rodeo: they both had over a decade of experience selling products online with sales funnels.

Rusell built a Value Ladder sales funnel for their new business and started driving traffic to it by promoting their software at industry conferences and through webinars.

At the time, he aimed to do 2-3 webinars per week. Sometimes, he would end up doing that many in a single day.

This strategy worked. In that first year, ClickFunnels grew from zero to $10M+ in annual revenue. Now, a decade later, it’s at $100M+!

Since then, Russell has taught thousands of other entrepreneurs how to use sales funnels to grow their businesses. Want to learn from him?

You can start by joining our Five Day Lead Challenge…

Build Your First Sales Funnel in Just Five Days!

Russell created our 5 Day Lead Challenge to help you build your first sales funnel.

In this super practical, hands-on online workshop you will:

Learn more about funnels
Create your lead magnet
Build your sales funnel
Set up a welcome sequence
Launch your funnel

…in just five days!

Russell and his special guests will walk you through everything step-by-step.

All he asks is that you commit to showing up every day, watching the main lesson and then completing the homework assignment.

If you can do that then you can have a fully functional sales funnel five days from now. So what are you waiting for?

Join Our Five Day Lead Challenge Today!

P.S. This challenge is completely FREE!