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Using Your Annual Planning Process to Ensure Great Sales Results in 2018

One of the biggest deficiencies that we see in many sales forces is a lack of alignment among corporate goals, sales objectives, and sales force behaviors. The three are frequently allowed to operate independently with the tacit (and often faulty) assumption that they are all in alignment and working toward a common end. At no time of the year is this independence more pronounced than in fiscal Q4, when senior executives, sales leaders, and salespeople are busy with their own respective annual sales planning tasks.

In Search of Organizational Alignment

In the final few months of the year, executive teams are busy with annual planning and budgeting processes — looking into the future, setting strategic goals, allocating resources, and attending to other corporate tasks. Heads of sales are busy with their own set of activities — redesigning compensation plans, setting training agendas, restructuring their organizations, and other things essential to their area of concern. Front-line salespeople and their managers are, of course, busy trying to accomplish a single goal — close enough deals before year-end to make their quotas.  

As this flurry of exhausting activity gives way to a new year, there will undoubtedly be fresh plans, budgets, and targets for everyone. All the pieces will be in place for the next fiscal year. But will the pieces be integrated and aligned? Will they will work in concert from day one to achieve the overall corporate objectives? Will the top, middle, and bottom layers of the organization really perform as one?

Engineering Success Through Annual Sales Planning

One of the keys to aligning an organization from top to bottom is to align the metrics that each level uses to measure success. If you follow Vantage Point’s research, you know we contend that there are three distinct levels of metrics that can (and should) be used to measure and manage a sales force.

First, there are business results. These are measures such as revenue, market share, or customer satisfaction that are viewed at the company level and used to report the overall health of the organization. These are the outcomes senior executives want to achieve.

Second, there are sales objectives. These are metrics such as customer retention, new product sales, deal win rates, and other benchmarks that constitute the sales force’s success at achieving specific goals. These are the stepping stones put in place by sales leaders that lead to business results.

Finally, there are sales activities. These are measures such as the volume of sales calls made, number of customers assigned to each seller, percentage of salespeople using CRM tools, or the amount of training provided to the sales force. These are the activities sales managers and salespeople actually do to fulfill business objectives and attain business results.

Establishing formal linkages among business results, sales objectives, and sales activities is the key to ensuring focused execution in the field that will lead directly to the achievement of the company's overall goals. These linkages are the only means executives, sales leaders, and people on the ground have to connect company strategy with reality. Align these metrics as part of your annual sales planning process, and your company’s sales force will be on the path to success.

Bringing the Plan to Life…or Not

Now back to the annual planning exercise. Invariably, this is a top-down effort: Decide what you want to achieve at the top of the organization, and then cascade those goals down into the company. However, our observation is that many annual planning exercises never leave the top. Walk into any sales department and ask someone at random what their sales objectives are for the year, and their response will most likely be “to make my quota.” While this answer is in some ways unassailable, it is also highly problematic.

This response reveals that that annual planning process probably never moved beyond the top layer of metrics — business results. This is not an uncommon scenario, incidentally, where the corporate revenue target for the year is broken into progressively smaller chunks (first by country, then by region, then by district, and so on) until every salesperson has a revenue number stamped on their foreheads. However, assigning a revenue target to a salesperson is not sufficient to ensure they achieve it.

An effective annual planning process does not stop with the dissection of business results. It proceeds to identifying the sales objectives that will lead to those results. For instance, if you intend to grow your revenues by 10% next year, you should identify how you will achieve that growth. Your new sales objective could become to acquire 10% more customers next year. Or sell 10% more products to your existing customers. Or even raise your average purchase price by 10%. Whatever your plan of attack, you must put a deliberately conceived path in place.

Once you have identified the sales objectives, you then must determine what changes in your sales activities will lead to realizing those objectives. For instance, if you decide that your preferred objective is to acquire 10% more customers, then you will need to make tactical changes in the sales force’s behavior, or else your objectives will never come to be. Whatever your new objectives, selling activities must change accordingly or else you are simply asking for results and hoping for the best.

One of the keys to aligning an organization from top to bottom is to align the metrics that each level uses to measure success.”

Jason Jordan | Partner, Vantage Point Performance

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