Usually, the VP or Sales Operation staff writes a master Sales Plan. Here I am focusing on the work that a Sales Rep should do to prepare for their year. I usually provide my Reps with a PowerPoint template to use to keep things streamlined.
Many companies have a format. If you are looking for one, there are literally hundreds online. Spend some time on Google and pick the one you like. But here I will go over the areas that have been essential for me.
Modeling the Revenue
- Number of deals and Average Deal Sizes
- Believe it or not, some salespeople do not know the answers to these questions. And all they must do is look backwards. And some Salespeople are not good with numbers – it is good to know this up front.
- Customer Segments and Geographies (if there is more than one)
- There is a difference in the sales motion of prospecting for new customers and getting repeat business from existing customers. Or there may be a different sales motion by industry or geography. That should be documented.
- Direct or Channel Sales
- There is certainly a different level of deal control in a direct versus a channel sale. In some cases, a channel business is about forecasting a run rate and requires more programmatic approaches. The metrics will differ.
Modeling the Lead Funnel – Qualification Metrics
- Once the revenue streams are defined, the lead streams must also be described. This is easier for direct versus channel business.
- For Direct Sales – Enumerating the Total Sales Qualified Leads by source conversion to Total Qualified Opportunities and conversion to Total Closed Deals is essential. The ratio of Marketing Qualified Leads to Sales Qualified Leads can be discussed elsewhere (because most SQLs do not come from Marketing programs). This should be based on the CRM history (if available) and list other operating assumptions, like budgeting, discounts, promotions, programs etc.
- Channel businesses modeling would outline the baseline “stream of business” assumptions and how account management, marketing programs, and market dynamics might affect the stream over time.
The Quarterly Activity Plan
Everything up to this point can be considered is extrapolation of historical facts. The main objective has been to ensure the salesperson knows the context and has thought through the challenge ahead. In my view the activity plan is what matters most. When a rep if falling short of quota, this part of the plan is going to receive the most scrutiny. However, it is also informative if they meet or exceed their quota, because quota attainment may not always be indicative of a productive sales rep. Understanding the how and why are as important as the results. I will note that this emphasis is controversial. There is a school of thought that telling the rep how to do their job is counterproductive. And that may be true in some cases with superior reps. But it is the rep that writes the plan, and it is the manager that inspects and approves the plan. So, this need not be a “directive” exercise. A rep can either produce “results” or a “story”. Whatever the story becomes, it should be defensible with respect to the Activity Plan.
Most importantly, this is a living document. And Activity Plans should be updated quarterly.
What should it contain?
- New Market – Business Development Efforts where appropriate
- Source of leads – Marketing Programs / SDRs, Cold/Warm Outbound Calls, Referrals, etc.
- Number of account review meetings with existing (repeat) customers
- Number of new prospects to identify.
- Number of new prospect meetings
- Number of new Opportunities in the Pipeline
Ensuring Activity Performance
When I hire a rep, it is to produce results. If I am asking a rep to do prescribed activities that I feel ensures their success, that is on me. Management needs to understand that telling salespeople what to do and how to do it is not always viewed kindly. One way I manage this is by doing quarterly MBOs (Management by Objective). If the Rep updates their Activity Objectives at the beginning of the quarter, measures, reports on them at the end of the quarter, and did the activity, I pay them a bonus. The size of this bonus is about 10% of yearly variable compensation. (For a different type of rep, like a Sales/Marketing Development Rep, it may be closer to 60% to 100% of their yearly variable compensation.)
Sales planning, measurement, reporting and adjusting is an ongoing program. And it cannot just happen at the top of the organization. Sales Reps are not born with this skill set, it must be taught, encouraged, and developed. And it does not take hold overnight. You may not get your Reps to where you want them in a year, or two, or three. But it is good for them, for you and your company if you instill the discipline.
