Why you need to set clear goals for your sales team

23 June 2022
I continuously talk to many hotels about how to attract more guests and customers and how to sell more to each guest. Hotel owners and top management struggle with setting the right goals for their sales teams to maximize productivity in bringing in revenue.
People without goals have no idea where they are headed and what is expected in their jobs. Goals aim to align the team toward the same vision, clarify the expectations, and engage groups and individuals. Here are some ideas for setting goals that lead to higher revenue.
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What is a goal?

A goal is a desire for something in the future. The goal clarifies what you want to achieve some time in the future. If you do not have any dreams or wishes to create your future, there is no need to set goals. Instead, make the best of your day, sell as much as possible, and fill the rooms with guests. Every day will be the same, and you will go with the flow, especially in a downturn where a lack of strategy and goals will hurt the hotel harder. However, dreams will make a difference in where you could be in the future. Companies like Google that work with the goal-setting method OKRs are hugely successful.

Goals for hotel sales teams

Hotels want to become financially successful long-term. Revenue is key to making a sustainable profit over time. Therefore, all revenue-generating activities are essential for hotels to succeed, which motivates hotels to have roles in marketing, sales, and revenue management.

Align the team

Traditionally, marketing, sales, and revenue management have been working in silos to generate revenue, often with conflicting goals and reporting directly to the general manager. Unfortunately, conflicting goals within any organization are probably more harmful than not having any goals.
 
Hotels want to increase or maintain the total revenue, so a goal based on total revenue will align the commercial team. The plan can be to reach a specific level of total revenue or increase total revenue in percent. All other goals should point in the direction of increasing total revenue.

Supporting goals

Every team member, such as marketing, sales, and revenue management, should have goals that support increasing total revenue. There are only two ways of increasing revenue in a hotel. The first is to attract more guests (B2C) and customers (B2B). The second is to sell more to every guest and customer. To reach a higher total revenue, hotels need to set goals for the number of guests and customers and the average spend per guest and customer.

Refined goals

Keep goals simple and focus on the activities to reach the goals. When a hotel reaches the maximum total revenue (based on the market and capacity), there is a need for goals that focus on maximizing the contribution to profit. Customer Acquisition Cost (CAC) and Customer Lifetime Value (CLV) will be more important to refine the financial success of a hotel.

Example of goals

Overall goal:
Increase total revenue by 10 % by 2023 compared to 2019.
 
Supporting goals:
  • Increase the number of guests by 5 %
  • Increase the number of customers by 8 %
  • Increase the average spend per guest by 15 %
  • Increase the average contract value per customer by 5 %
 
Refined goals:
  • Decrease CAC to 18 % of total revenue
  • Increase CLV by 5 %