You know what your sales were last year.

You know how much you want to grow.

You multiply last year’s revenue by your desired growth rate.

Voila! Next year’s sales targets are set and you communicate the target to your team.

Is this you? If so, keep reading…

We’ve seen many emerging B2B companies set sales targets this way. Unfortunately, gut feelings and high hopes aren’t a great way to create predictable revenue streams. You need educated estimates and existing data.

Having a predictable revenue stream means you know what to expect sales to deliver quarter over quarter – and they deliver exactly what you expect. You also know when your leading indicators are off – in time to react.

To achieve predictable revenue, you need to set the right metrics and know which activities, and how much of each, are required.

A revenue target is not a strategy, but setting metrics at each stage of your sales cycle is.

Setting the right metrics and monitoring them will uncover

• What marketing and sales activity and investment it’ll take to hit a big sales goal
• How much revenue to expect given current activity levels
• Where opportunities are dying in the sales process

When you aren’t hitting your numbers, it’s easy to jump to conclusions. Maybe you’ll think the problem is that you don’t have enough leads. But maybe that’s not the problem at all. The real problem may be sales’ ability to close the leads you already have, meaning you should focus on better sales enablement instead.

Setting and monitoring metrics allows you to predict your revenue, first and foremost. You’ll also feel confident that sales and marketing are aligned, you can better leverage marketing to drive sales efforts, ensure goals are achievable, and know immediately when there’s an issue.

For more on this topic, check out our Metrics page or watch the video.