Failing to plan is planning to fail.
This well-known cliché definitely holds true in sales. It may only be October, but it’s never too early to plan for 2015. As the new Sales VP at InsightSquared, I’m putting the final touches to my sales plan for next year. As a high-growth, VC-backed business, we have some very aggressive sales goals to hit next year. Success doesn’t happen by accident, so planning early is crucial. Plans evolve and need input from many stakeholders, so the earlier you start, the more time you have to iterate and ultimately agree on a solid plan.
To attract capital from investors, you must demonstrate how you will create value and invest for long-term growth. Typically, a solid three-year plan is submitted to investors from the beginning. This plan includes top-line growth with capital allocation, but the devil is really in the details. As sales leaders, it is our responsibility to put some ‘meat on the bone’ – translating company goals into a solid, actionable sales plan.
How do you translate a top-down revenue goal into a realistic, bottom-up sales plan to achieve those goals? Here are some ideas.
Analyze Available Resources
The first step in achieving your 2015 goals is taking a close look at the resources at your disposal. If, on average, your reps close $50K of business per month and you have ten reps, you net about $500K per month. But if the plan is to increase that revenue to $1M per month, something needs to change. You may need:
- To hire more sales reps
- Reps to close more deals
- Reps to close bigger deals
- Reps to improve their skill level
- All of the above
No matter what you decide to change on your team, you have to create a plan. If your team needs to grow, it’s important to start the recruiting process far in advance so you can find the best candidates and get them fully ramped. Do not underestimate the time-to-productivity for new employees. Most organizations have aggressive ramp periods and are disappointed when reps take longer to start delivering. There is nothing worse than a quota ticking away against a rep named …..TBH (to be hired). Recruit early!
If you need your reps to close more deals, assess what the true capacity is for each rep and take a close look at your pipeline. As much as having too few opportunities is a problem, too many can be a bigger problem. Opportunities cost money to generate, so if a rep is not able to give each opportunity their full attention, you run the risk of opportunity leakage. Make sure your reps can handle the number of opportunities in their pipeline. If they are underserviced by opportunities, you will need to look further up the supply chain. Analyze sales cycle times and conversion ratios from the top to the bottom of the funnel. This will give you a good indicator of what is required. Marketing and the Business Development teams are key stakeholders in this conversation. The numbers don’t lie!
An inhibitor to success is sometimes having too many opportunities. Increasing your average deal size requires focus. Doing the same things will inevitably yield the same results, so if you want a different result, you need to do things differently. A starting point to increasing the average deals size is simply to decide to do it! Set a goal and focus on a segment of the market that will allow you to achieve this goal and build an execution plan. Carve out a team to focus on bigger deals and accounts, with clear objective and boundaries and support them in their quest.
Ramping for Growth
Once your targets are locked in and you know your staffing needs, you can start recruiting, training and enabling your reps as soon as possible. It is important for reps to have the right technical skills for the job. I like to create a set of Gold Standards required to sell. These include:
- Product knowledge – Do they know it well enough?
- Product demonstration – Can they showcase effectively?
- Solution or Challenger Selling techniques – How do these skills manifest inside the CRM solution?
- Competitive landscape – Why we are different/better?
- Customer context – It’s not about us, it’s about them.
Skill development is a continuum and requires constant attention and work. All reps need a combination of Leadership, Management and Coaching. Striking the balance is the key. Sales reps and leaders have an insatiable appetite for more and better (leads that is). But we have a responsibility to execute with precision every time. It’s the job of sales leaders to hone your team’s skills to ensure that every opportunity is fully optimized.
Define Sales Performance Metrics
Once you have defined your Gold Standard, you have to hold reps accountable for their individual execution. As a sales leader, you should monitor their performance and ensure the reps are hitting their goals. Key metrics to monitor include:
- Forecasting accuracy – How often is the rep on-target with goals?
- Activity levels – Does the rep make enough calls / meetings or create enough opportunities?
- Conversion ratios – When are opps lost in the sales cycle? How does this compare to the rest of the team?
- Sales cycle – How long does each opportunity stay in each stage before closing? What is the speed as an opportunity moves through the funnel?
- Discounting trends – How do people compare against one another on retaining value?
Measuring these performance metrics and comparing team members gives key insights into your training and development needs. Make adjustments as you go, and always keep an eye on the big picture. Executing on the plan is a team effort, so communication is key. A plan is worthless if you don’t have buy in, so socialize some of your thinking early. No one likes a surprise, especially if it means a quota increase or change in territory. Most sales plans have cross-functional dependencies (marketing, business development and perhaps channel). You need to ensure everyone is on plan, on message and in agreement for the 2015 plan.
You need to create a strategic sales plan for 2015 today, before it’s too late. As I said earlier; if you fail to plan, you plan to fail. If you analyze your resources, ramp up growth and track your metrics correctly, you’ll be able to build a powerful sales machine that will drive your business into the future. Good luck.