Sales Target

Posted in Marketing and Strategy Terms, Total Reads: 2335

Definition: Sales Target

A sales target is a company-specified amount of sales that is set in order to achieve or exceed within a time deadline. The goals are generally set on the basis of the popular S.M.A.R.T goal setting approach where S- Specific, M- Measurable, A- Attainable, R- Realistic and T- Time-bound.

These targets are apportioned among various units of sales like salespersons, distributors, franchisees, agents etc.

There are different kinds of Sales Targets:

• Sales Targets by Product: Product sales targets are generally a list of the number of products one needs to sell, at a specified average price in order to earn a budgeted profit. It also keeps in mind business information such as inventory and warehousing.

• Sales Targets by Market Segments: The Pareto principle says, “80% of a company’s profits are generally derived from 20% of the company’s customers”. Market segmentation is an important parameter on which the sales targets by market segments are set. A market is often segmented on the basis of geography, demographics (age, gender, income, occupation, education, socio-economic status) and psychographics (personality, lifestyle, attitude, value system).

• Sales Targets by Region: Businesses spread over regions/ areas set sales targets for their Area Sales Managers for a given region/ area. This is an effective method of setting sales targets for businesses as it shaves off the daily headaches of setting and monitoring individual targets for a large number of products. These are ‘big picture’ targets as they cover a large number of customers.

Hence, this concludes the definition of Sales Target along with its overview.


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