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First Steps for Effective 2016 Sales Planning

The new fiscal year is fast approaching. Therefore I like to copy this message to you. It is written by James N. Touchstone, Director at Sales Performance International in the USA. The reason why I copy this to you, is because when helping sales organizations, I notice the difficulties these organizations have planning revenues, I notice that they very quickly lose focus and from the 2nd month of the year all good intentions that existed before the start of the year have evaporated.

This is an especially challenging time of the year for sales leaders – even more so for those in companies with a December 31st fiscal year-end. For them, in addition to working to surpass goals for this year, it’s also time to begin planning for success in 2016, as well.
When it comes to sales planning, most organizations begin with a top-down budgeting exercise - a new sales target is given to the sales leader, who then has to figure out how to reach it. Often, top-down goals present a difficult challenge, especially if they include high expectations for new business.

Bottom-up Pipeline Analysis
To help rationalize a top-down assigned goal, we recommend that sales leaders also conduct a thorough bottom-up analysis. Start by calculating the value of current opportunities and quantifying the expected recurring business that will carry over into next year. We’ve prepared a simplified Pipeline Analysis Worksheet tool to help you get started (please ask me a copy).

This analysis provides a clear picture of the value of opportunities still in play in the new year, and also what additional business the team needs to create in order to achieve the new growth targets. The question then becomes: how to fill the identified sales gap?
Practically, there are four things that sales leaders can do to achieve sales growth targets:

1. Retain and grow existing accounts.
Existing accounts are usually the most profitable source of revenue. Look at the biggest and most strategic accounts and perform a white space analysis on each. Determine the degree to which the sales team has penetrated each account, and consider the value of any additional capabilities that solve customer problems and thereby generate new opportunities.

2. Find more new account opportunities.
It’s well known that landing new accounts is typically harder, slower, and more expensive than growing existing accounts. Nevertheless, few sales teams can achieve their growth targets by relying on current customers only – they must also find new clients. A pipeline analysis will calculate the number of new opportunities needed, based on their average size. Plan to equip the sales team to be effective micro-marketers to stimulate the curiosity of targeted prospects. Collaborate with the marketing team to invest in demand generation activities that will support sales objectives.

3. Increase average opportunity size.
Simply selling more of the solution portfolio, in both existing and new accounts, always helps achievement of sales growth targets. Enable the sales team to cross-sell and upsell effectively by increasing their situational fluency. If a new product launch is anticipated, the sales team must be prepared to position and sell that new capability. Increasing prices can also help, but this may be viable only if market conditions permit. Regardless, equipping the sales team to better capture and communicate the value of solutions to customers will reduce concessions and discounts, and expand the size of each sale.

4. Win more opportunities in the pipeline.
Simply put, be more competitive. Analyze the current win rate – the number of opportunities won compared to total opportunities in the pipeline – and seek ways to improve it. This is probably the most challenging of the four options, as it requires investment in improving sales team competencies, providing sales enablement tools for knowledge and insight, and sales process execution discipline. However, these kinds of investments in improving sales team quality generally provide the longest-lasting and most sustainable improvements in productivity.

Fact-Based Sales Planning
After determining the realistic value of the aggregated pipeline, the sales leader can then more easily determine the ideal mix of actions to fill identified gaps and achieve top-down sales targets. This mix will drive identification of the resources required to support execution of a practical sales plan.
In a future blog post, we will provide a more detailed sales planning guide that assists in identifying the right tactics and resources for optimizing sales growth. But sales leaders can start now by doing the math, analyzing current pipelines, and identifying the principal sales growth actions that make the most sense for their organization. As a first step, a bottom-up pipeline analysis provides a clear understanding of the real numbers needed to succeed after New Year’s Day.

Ask me for the simplified Pipeline Analysis Worksheet to begin planning for a successful 2016.
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"It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change."
Charles Darwin
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