How does your organization develop your revenue plan? If it is like most of corporate America, you follow these steps.
- Step 1- You get the announcement from corporate. Forecast time! It goes on telling you to forecast by territory and rep. Detailing instructions about filling excel cells in yellow and not touching the red ones. This takes you days if not weeks to put together. Finally when completed you have a stretch goal of 5% YOY growth.
- Step 2- You submit your spreadsheet. Weeks go by and you know it went into the black hole.
- Step 3- Corporate reemerges. They let you know that you are short of your number. Corporate has assigned you a new target of 13%.
- Step 4- You scratch your head wondering if there is an opportunity to talk this over.
- Step 5- No chance, your number is 13%. You ask yourself what was the point of the exercise in the first place.
This is often the case for many sales managers across organizations. This common theme repeats itself during the annual planning process. You can avoid this problem.
This post is about building a realistic revenue plan. Review SBI’s Annual Research Report here. In the report you learn to define the plan to achieve your revenue goal. Let us review the problem and solution.
Without a revenue plan, your reps work disjointedly, and the probability of success plummets. Done incorrectly, you risk the chance of having a demoralized sales team. Here are the critical factors missed when thinking about your revenue plan.
- Nurture Factors– These are key drivers you would know from 1-2 interactions with your customers. Examples would be access to buyers or number of buyers involved.
- Data Factors– These are key drivers you would know prior to meeting with a customer. This data is either available internally or through a 3rd party.
- Not Getting Your Boss Involved Early– You need to share trends with your boss. What are you seeing in the market, accounts, and buyers that impact your results? If you do this through the year, you can get by.
- Not Leveraging the Data– Gather historical data to begin building a predictive model.
You need to control your own destiny for defining your revenue plan. The plan allows for great execution around your team. There are three major components you need to have in your plan. Review SBI’s Annual Research Report for a comprehensive approach. Below is how you get your boss’s attention.
- The Road Map- You need to understand what market, accounts, and customers will generate the most revenue. Furthermore, this needs to be broken down by product, service or solution.
- Metrics- What are the key metrics you will measure? And how will you keep track of them? There are several out there but keeping it simple for your team is important.
- Accountability- Building a plan is not enough. You need to include an execution plan in pursuit of the revenue goal. You should be able to break this down by rep and/or territory. Make each person on your team accountable to the team success. Don’t be lazy and spread the number evenly across your team. Remember not all territories are created equal.
For most organizations revenue planning for next year might have already occurred. There are two reasons why this exercise is still important. First, is to understand how you will achieve the number next year. Secondly, you will be ready for next year. This will help you establish a number your team can actually hit.