This is an especially challenging time of the year for sales leaders â€“ 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, itâ€™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 the 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. Weâ€™ve prepared a simplified Pipeline Analysis Worksheet tool to help you get started.
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:
- 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.
- Find more new account opportunities.
Itâ€™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.
- Increase average opportunity size.
Simply selling more of the solution portfolio, in both existing and new accounts, always helps the 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.
- Win more opportunities in the pipeline.
Simply put, be more competitive. Analyze the current win rate â€“ the number of opportunities won compared to total opportunities in the pipeline.Â Seek ways to improve it. This is probably the most challenging of the four options. 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 real 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 the 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 Yearâ€™s Day.
Download the simplified Pipeline Analysis Worksheet to begin planning for a successful 2016.