How to measure sales correctly – do you use lead or lag targets?

Do you know when a sales goal has gone off course?

For many people it’s too late when they discover this. They realize that they are not going to make their figures when it’s too late to do anything about it. They find out that it’s all gone wrong at the end of their sales period.

It should not be difficult to work out that things are going wrong. The signs are often visible at an early point in the sales process. The trouble is that many sales people just do not have the tools to see that they are running into problems.

Many sales goals go off-course because they are only measured by lag targets

How do you make sure that you achieve your sales goals?

How do you make sure that you achieve your sales goals?

A lag measurement determines the success of a project once it has happened. In sales terms, a lag target is the final figure that a sales person brings in. Typically, it is their year-end figure. But, by the time there is a fair indication of this figure, most people can’t do anything to change it.

Lag targets are an important part of a sales structure – they measure the success of a sales person at the end of the sales period. However, it’s much easier to keep track of sales figures by using lead targets. That’s where a lot of sales measurement falls down.

Sales people who use lead targets have much better control over their sales activities. As a result they have a much better chance of achieving their sales objectives.

Sales people who use lag targets are less likely to achieve what they need to. They won’t be able to realistically measure their sales activity until it’s too late.

What is a lead target?

A lead target focuses on the activity needed to achieve a target, rather than the end result. In other words, you decide what you need to do to achieve a sales goal and then you measure the activity. If you carry out the right activity, you will achieve the end result.

It is much easier to measure your activity on a daily, weekly or monthly basis. This means that you have a much earlier indicator of whether you will achieve your targets. If you are carrying out the right activity, you should get the right results. If you are diverted from these activities, you are unlikely to be on target at the end of the sales period.

In addition, this measurement is carried out much earlier during the project. Problems can be highlighted much sooner. So if you are carrying out your planned activities and not seeing the expected results, you can change what you are doing.

Here’s an example of using lead targets for a sales project

Earlier this year, I tasked myself with winning more mentoring clients. I set myself an number of daily contacts to potential targets. Because I focused on this above other sales activity, I now only have one mentoring place left to fill. I am actually ahead of my target.

(If you want to find out more about my mentoring services, please contact me for a copy of my mentoring brochure.)

However, I was measuring what was happening as a result of these contacts. If I hadn’t been getting the right results from this sales activity I could have reviewed what I was doing. I could have either made more contacts or changed the type of contact I was making.

Here’s how to put lead targets into practice

  1. Set yourself a goal (I find it best to set myself a goal that I will achieve in 12 weeks rather than a year)
  2. Set lead targets around this goal: what actual activities do you have to carry out in order to achieve your goal?
  3. Measure your activity on a regular basis. Are you carrying out the right actions every week? And are you getting the right results from them?

If you carry out these three activities, you are much less likely to find out that you are not achieving what you set out to do. You highlight challenges much earlier on. You are far less likely to see that your sales goal has gone off course.
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