How to Meet Sales Goals in Retail?
Find out how to meet retail sales goals in this post.
When a salesperson falls short of their targets, it is not only because they didn’t make enough money. The whole process can be difficult and time-consuming with all the different tasks that need to be done.
If you’re a salesperson and have hit your target but want to find ways of exceeding it, some things may help.
The point of this post is to help you and your sales associates hit or exceed their retail sales goals. We know how important it is for retailers, so we’ve compiled several pointers that will hopefully be helpful.
Check them out below.
Figure out which retail sales goals work best for your business
There are no hard and fast rules for setting your sales goals. Your company is different from the next, so you have to determine what works best for you.
Here are some factors to consider when setting retail sales goals:
- Historical sales data
- Sales initiatives and events throughout the year
- The capacity of your sales team
- Employee input
1. Set targets that are challenging but realistic
Setting goals can be tricky. You need to set challenging but not too complicated, so they’re realistic.
So, when you’re setting goals for your team members, make sure they’re not too easy or too difficult to hit.
Kevin Graff, a retail store owner in Southern California, offers excellent advice on finding that perfect balance. He recommends setting your goals at 70% commission and 30% base pay so you can motivate your employees without costing yourself too much money.
“Goals should be achieved at least 70% of the time. If not, they’re too high and risk de-motivating your staff,”
“By the same token, if goals are achieved 90% or more of the time, they’re too low and aren’t pushing your staff.”
2. Have sales quota to increase productivity
When you plan your sales targets, start with the number of annual revenue goals and break that down into quarterly or monthly. But when it comes to communicating these numbers to your team, try breaking them down even further — say weekly or daily.
Frequent sales quotas can give your associates continuous motivation. As the Harvard Business Review put it:
“Under a monthly plan, salespeople who started off the month poorly might become less motivated after realizing they weren’t going to make their quota for that month — in essence giving up in the current month. Daily quotas would theoretically help prevent such behavior.”
The researchers conducted a study at Sweden’s largest retailers and compared monthly versus daily quotas to test this theory.
Harvard Business Review found that having quotas can be a great way to increase productivity. Percentages are most effective for the lowest-performing salespeople, with bottom quartile experience improving by 18%.
Why is this the case?
The article mentions that low performers often struggle with maintaining a consistent work pace, but daily quotas seem to help them stay motivated and focused.
That said, the study did find that while daily quotas increased sales volume, frequent allocations seemed to motivate salespeople “to sell more quantities of low-ticket items, probably a result of shifting their mindset toward the smaller daily goals.”
One consequence of this approach was that sales associates started to push the low-margin items. This, in turn, led to lower profitability.
If your employees are not making the big bucks, try incentivizing them with frequent sales quotas. You can also use creative ways to promote high-margin products, so they become more of a priority.
3. Set SMART goals to boost productivity
One of the worst mistakes people make regarding goal setting is not having a specific target. For example, simply saying you want “increase sales” will never cut it.
For a practical goal, make sure that you are setting SMART goals. i.e.
You need to set clear goals and measure your progress to get more done. The purpose should be specific so that it is measurable attainable. There’s a good chance of achieving it in the time allotted for its completion, relevant to what matters most right now, and time-based with an expiration date.
Sales goals examples include:
- Gaining ten new customers every day is the only way to succeed.
- Your sales will increase by 20% in the next month.
- By the end of this quarter, increase your basket size by 15%.
How do you communicate your sales targets?
Your employees are as invested in your business goals as you are. They should be the first to know about them.
That’s a good start, but if you want to keep those goals in the future and not let them fade away into nothingness, you must communicate with your employees about what they need to do.
To fix this, try to do the following:
4. Constantly talk about sales goals and performance
One of the best ways to get your sales team motivated is by praising them for their progress. Tell people about it in the morning, ask how they are doing at lunchtime and tell them again when you’re getting ready to leave.
You need to constantly talk about retail sales goals and performance for your employees not to forget what they’re trying to achieve.
One of the most common mistakes managers make is assuming that a paycheck will motivate their employees. The truth is, they also need to know what those targets are and how well they’re doing.
5. Keep sales goals and achievements visible
One way to motivate your sales team is by setting goals and having them visible on the POS system. If you have a point of sale solution, check it out for this feature.
When tracking the numbers, figure out how to make them visible.
Vend provides a valuable dashboard that helps you see how your employees perform. For example, the Home screen shows what targets each employee has reached, and it can be used to find top performers or identify goals for different teams.
Once the user has set their targets, they will monitor them from the home screen. “Your Sales” section shows how close you are getting to your sales target.
A graph also lets you see your sales history throughout your choice.
Find new ways to motivate your staff.
You have to think of new ways to motivate your staff because goals are not enough. Here’s how you can do it.
6. Keep your team abreast with the store’s sales goals
To incentivize employees, many companies offer commissions and bonuses. But it’s important not to make this a win-lose situation because the goal is for everyone in the company – from top executives down through all levels of management – to work together as a team.
Recently, Bob Phibbs from Retail Doctor shared a clever way to help your sales team. He recommended setting goals for the store and then rewarding those who hit their quotas.
However, this is not the case. If an employee hits their target but doesn’t meet store goals, they don’t get a bonus. It’s just like when you play Mario Kart and have to finish in the first place without getting knocked out.
As Bob put it,
“you’re sharing the rewards as well as the risk, and that seems to motivate people well.”
The author talks about the importance of incentivizing employees with a video below. He discusses it at 19:30.
7. Host regular games to gamifying the process
In addition to providing a paycheck, also offer prizes and contests as incentives. Cara Wood claims that her team’s performance improved drastically when hosting regular games.
“Running contests to encourage harder work was something the retailer I worked for was very good at. They regularly ran all kinds of contests, with excellent results from their teams,”
Ideas for you? Here are some ideas:
A commonly favorite contest is to give out gift cards was when store credit cardholders got a $5-$10 gift card just by opening their account.
“I was always good at opening cards, but I was extra good during these contests. I typically opened one per shift, but during one of these contests, I opened 14 cards in three shifts, netting myself $70 in gift cards to the store.”
The company Cara worked for, for example, had pizza parties to celebrate the store that did best on average transactions.
One idea comes from Ray Riley, CEO at People in Progress Global. He suggests that running contests to encourage certain behaviors could also work.
“Borrowing from our retail education products, I’d focus on exceptional greetings this holiday season with a game: Pass the Buck,”
“Whoever creates eye contact, squares their body to the customer, and genuinely greets them into their store within an acceptable period gets a dollar. The next sales professional to do the same get the same dollar, and the objective is to hold onto that dollar the most throughout their shift.”
Have a raffle. Have an attractive prize up for grabs, and the more people who participate, the better their chances of winning it.
Salespeople who sell more also have a better chance of winning the competition.
Train your employees regularly
Employees not meeting their sales targets? Perhaps it’s time to invest in some training. The retail industry is constantly changing, and you need your staff members to be up-to-date on what they’re selling as well as how best to deal with it.
One of the first things that managers do is train employees. It’s so important to teach them and give them an opportunity for growth.
Don’t expect results without doing your due diligence. Teach them what they need to know to have the best sales team possible.
8. Familiarize your employees with the store’s products
You want to make sure that you spend some time explaining the ins and outs of every product so they can know their stuff.
Former retail associate Reese Evans says that one way to sell is by giving the customer a good rundown of features, advantages, and benefits.
You’ll find that using the app is a great way to develop new ways of talking to your customers and shoppers.
A feature is the product’s characteristic, while an advantage can be what that specific quality does. The benefit, which is most important to customers and businesses alike, describes how they will get something out of this particular aspect.
To get the best results, you should offer a personalized service to your customers.
“Let’s say you’re selling a jacket. A feature could be that it has a pocket on the inside of the garment. The advantage could be that the pocket is ‘hidden’ inside the jacket and could be opened and closed using a nifty zipper. And then the benefit could be that the customer can use it to subtly store small but important items like extra cash or their IDs.”
It’s always fun to see new products arrive in the store, but it can be challenging for everyone on staff to take a look at them. Make sure you have some time set aside for unboxing sessions where your team gets together and opens up all of the latest arrivals.
Elevator, a Toronto-based boutique that sells accessories and jewelry, is doing this.
“Having a well-informed sales team is essential for the sales experience and driving more sales. The aesthetics of a particular product is essential, but people will always want to know what something’s made of, or a little bit about the designer,”
Says store owner Niko Downie.
“Whenever new designers arrive at the store, we sit down with the product in front of us, look at it thoroughly, talk about the materials that it’s made from, who the designer is, what’s particularly unique about this product, and how to demonstrate it. We tend to do that as new items, new designers, and new collections arrive in the store.”
9. Make your employees learn the art (and science) of sales
Build an environment that’s favorable for increased retail sales
If you want your sales team to hit the goals, make sure they have a few things going for them. Here’s what to do.
10. Get people into your store with promotions
The best way to get your employees motivated is by making sure that they have customers to sell their products and services. This will be difficult if there are no visitors in the store.
You can add some extra pizzazz to the displays and events to get more people in your store. Throw in a promotion or two if that sounds like something that might work for you.
11. Have the right products
You can’t just throw a product out there and hope that it will sell; you need to know the wants and needs of your customers.
It’s essential to speak with your customers and find out what they want from a store. It would help if you kept up-to-date on the latest trends to better cater to their needs.
After you know that, use it to influence your purchasing decisions.
If you have the right products, it’s essential to keep them well-displayed. This is something that can be done strategically.
Identify the key areas of your retail sales goals and be refreshing and in terms of products, as much as possible. It would help if you also focused on areas that get a lot of traffic or have high-profit margins.