This is the Time to Re-design Your Sales Planning Process

Right now is the most important time of the year for a sales leader. Its the time when you not only are trying to support your teams to meet their annual quotas, but also supposedly need to be in the planning mode to make decisions on the sales quotas for the subsequent years.

If you are like most sales leaders that I have known, you are finding it difficult to maintain a balance among both these activities. And in most cases, the closure of the year takes more precedence than planning for the next year, which would be best to avoid by better planning at the start of the year.

So, how do you decide what sales figures you want to aspire for and how do you allocate the sales quotas?

Do you decide on a % increase on the current year sales figures as the aspiration? Say 15% year-on-year growth in top-line. Is this handed down to you by the CEO or the board of directors? Do you then add some cushion and divide this among your direct reports based on the markets and volumes that they currently run, who in turn do the same to their direct reports and this continues till you have reached the sales executive and communicated his quotas. There is always some negotiation at every level. Since both the parties know that this is a given, it loses its validity and people plan for these push-backs in the original quotas being suggested.

Now the sales executives are left to create a sales plan that can help them achieve their quotas. Smart sales executives create a plan for atleast 40% more revenue to ensure that there are no surprises at the end of the year and starts executing the plan with his set of accounts.

Now imagine that you also do the following exercise at the start of the year:

In November, you get your sales teams to take a day or two off and block it for planning. You could get the entire sales team do this on the same day or spread this out for different days for different teams. You inform all your sales executives to look at the accounts that they manage and come up with sales plays with each of these accounts. Then they identify the potential revenue from each of these sales plays. They create 3 estimates – Best case, Worst Case and Probable case. Based on the sales play, current macro conditions and the relationship with the customer, also estimate where they are in their buying process. Repeat this process with all their customers. Then you add the revenue potential for all the three scenarios from all the sales executives and also know the stage in which each account is in the sales process. This gives you a good idea of your pipeline from your existing customers/prospects. You also ask each one of your sales executives to come up with a list of 10-15 accounts in their market whom they would like to do business with and what would be the potential sales plays for those accounts, if they could come up with one. You would need to then take this list to your marketing teams and get them to create a plan on how they could support your team to get these customers interested in your products and services. You then set the quotas of the sales executives based on the worst case scenario and if you have to set sales quotas for the sales managers, set them based on the most probable or best case scenarios. Alternately, you could set the sales quotas of your sales executives based on the most probable scenario and measure your sales manages based on the % of their direct reports who achieve their quotas.

If your organization is like most organizations that I have come across, you would find that the revenue potential is much higher than any percentage increase in revenue that you had originally planned to achieve. In addition to that, you now also have a sales play defined for each one of your existing customers and the prospects already in the pipeline.

Now, it is very important for you as a sales leader to do this exercise in the last quarter of the year so that the entire team realizes that the planning process is as important as the sales closure for the quarter. This is the cultural shift that you could effect. Also, this ensures that the entire team is involved in the planning process and not just the sales leaders. This entire process will also ensure that you hit the ground running when the year starts. This process also ensures that your sales executives will not just concentrate on customers where there are current deals being planned but also continue to build his relationship with all his customers.

These are my thoughts. What do you think? Is this level of planning achievable? Do share your thoughts by commenting below or by tweeting your thoughts to me at @rmukeshgupta.