A goal without a plan is just a wish- the quote can’t be any truer when it comes to the annual sales planning. Sales planning is an umbrella term that includes various activities such as setting attainable quotas, deploying apt sales commission plans considering disparate territory coverage, facilitating seamless buyer and customer experience, to name a few. The end goal is to align the sales efforts with the organizational revenue goals or any other targets. It’s an activity the most established companies adhere to for making educated guesses towards reaching the defined targets.
The pandemic, however, has made it arduous to do sales planning for the year 2022 since the recovery is in abeyance and the ever-changing buyer and seller’s experience combined with digital selling has exacerbated the same. But, why is it important to have an annual sales plan?
The main objective behind annual sales planning is to:
- Effectively communicate the company’s vision to the sales teams.
- Provide a direction for the sales teams to follow.
- Scrutinize the sales team’s progress against organizational goals.
- Meeting the estimated revenue using the allocated budget.
What’s required for the annual sales planning?
A prerequisite activity for sales planning is to get data-driven insights and alignment with the revenue goals of the organization. This can be done by extrapolating sales forecasting analytics using last year’s historical data, sales performance analysis, sales capacity or productivity modelling, and other factors that may weigh in depending on various organizations. That said, an annual sales plan must follow SMART goals- it should be Simple, Measurable, Achievable, Realistic, and Timely.
What are the advantages of an annual sales plan?
Sales managers design a precise sales strategy, which includes identifying strengths, weaknesses, opportunities, and risks (SWOT-analysis in business parlance).
In terms of sales activity, having a sales strategy might assist. The following is a list of advantages that a firm would receive if it had a well-structured sales plan:
- Detailed knowledge of the firm's strengths and limitations:- Your sales force should be trained to highlight your company's strengths as part of your sales plan. To focus on your product strengths, including competitive battle cards and SWOT analysis in your sales plan.
- The ability to keep track of progress:- Rethink the sales technique or give further sales training if an employee fails to fulfil established sales targets.
- Patience and discipline:- When an employee understands he has to close five agreements per month, for example, he becomes more task-oriented.
- Clear objectives and income targets must be met within a specific time frame:- Every team member knows what they need to contribute to the success of your company when you have a well-organized sales plan in place. Your sales target, for example, may be to leverage $5,000 in five new agreements in a month.
- Specific methods for attaining the goal:- A sales strategy spells out the techniques that will be used to meet sales goals. Define your sales plan's target audience, marketing tools, and strategies. Some businesses, for example, use guerrilla marketing to meet ambitious sales objectives.
Is there a template that one can follow?
There are myriads of templates available for sales plans over the internet namely the 30-60-90 days plan, budget plan, territory sales plan, sales training plan, sales tactics plan, and specific sales plan. However, none of it can be used as a panacea for all the existing problems. It is advisable to consider various factors and assumptions along with the plan that may come in handy if things go awry, as in the case of an unprecedented pandemic.
To understand when sales leaders usually start their annual planning, I conducted a poll on LinkedIn and was surprised to see that some leaders do this activity after Q4. From my personal experience of working with sales operations leaders, I’d recommend getting done with this activity at least before the end of Q4. Furthermore, Forrester’s survey data posits that getting complete compensation packages to the sales force before the end of the first month of the fiscal year yields 4% higher quota attainment than delivering them later.
Should I even do the annual sales planning?
While there is a school of thought that advises against making annual sales planning- since many plans are subject to changes once the year progresses, it’s a matter that can be best suited to each their own. If you ask me personally, I’d vote in favour of doing annual sales planning since it gives a path to follow.
Think of it in this way, the annual sales plans give a direction to tread on while planning for a long journey. Once you start walking, you can change your direction to traverse through the most optimal path rather than wandering aimlessly or spending too much time figuring out the most optimal path before even starting the journey- this may lead to making decisions in haste and under immense pressure, which furthermore aggravates the final plan and defies the whole purpose of doing this activity. I’ve seen companies waiting for too long to decide on their annual sales plans so much so that this analogy appears to be the exact catastrophic reflection that I spoke about.
Top suggestions for creating a successful annual sales strategy
Sales strategies are like diets. When you decide to lose weight, you commit to a set of rules. The rules are strict at first, but eventually, they become part of your normal routine. You stop thinking of them as rules and just think of them as ways to stay fit. A sales strategy works the same way. It requires discipline, but the benefits soon become obvious.
Every year, most businesses begin the year with the objective of exceeding their sales targets. Then they make the typical mistakes: attempting to anticipate individual sales, which is futile anyhow; making promises they can't meet; and beginning the year with a budget that isn't spent. Unfortunately, these ill-conceived strategies typically lead to low morale, increased attrition, and, as a result, poor economic results. Whatever commands come down from on high must be turned into a plan that can support the intended expansion. The key to long-term success is to have a strong sales plan to back it up. Here are a few suggestions that I propose for developing a plan of this nature.
- Obtain marketing's opinion. The synchronization of your marketing and sales efforts is crucial to the success of your sales strategy. The more marketing feedback you have, the better your lead generation, prospecting, and nurturing activities will be aligned.
- To better understand your sales reps' difficulties, speak with them. It's easy to become lost in the data and projections. However, it's critical to understand your sales professionals' day-to-day activities in order to determine what will and will not be productive or possible.
- Complete a thorough study of your competitors. You must understand what the competition is doing successfully to design a strategy that steers your organization in the right direction.
- Hard facts and statistics should be used to back up your budget suggestion. If you're making a budget as part of your strategy, back it up with historical performance data and sales projections.
- Make separate plans for each team. You may be even more precise and particular in your goals and KPIs if you build a sales strategy for business development, inbound sales, outbound sales, field sales, and so on.
Conclusion: Make a sales strategy that grows with your company
There is no such thing as a one-size-fits-all sales strategy. The only way to use a sales strategy incorrectly is to draft it at the beginning of the year or quarter and then abandon it. To stay focused and on track, you should evaluate and revise your plan on a regular basis. You can ensure that your firm generates income more successfully than it has in the past by constantly updating your plan and to know more Book a demo today.