If you believe your 2019 forecasting and budgeting is complete, here is the chance to see how your planning process measures up against fast-growing companies. SBI researched thousands of companies and developed the Critical Four elements needed to ensure success.

“Hello 2019, we’ll be right with you!”

 

Most of my clients have been in non-stop planning meetings since mid-August and earlier.  Long days of adjusting and readjusting budgets and expectations.  New tools make the process easier, however the resource allocation decisions and never get easier.  For many, this can be the most aggravating time of year because it is the most critical.  So here is how you can nearly triple your chances of hitting your 2019 number.

 

 

Does it answer these three questions?

 

  1. How do I go after accounts that are going to spend heavily in 2019 and avoid those that are not?

     

  2. How much of my number should be new bookings vs growing the base?

     

  3. How much should I be spending to make my growth number?

     

The Revenue Plan is the first pillar to the Critical Four elements market leaders use to grow faster than their peers and their industries.  Many companies outsource the development of their Revenue Plan for speed, objectivity and to allow their sales teams to focus on a strong finish to the fiscal year.  To insure your plan is complete, check it against the 5 core components using this structure.  For a more complete description, click here for SBI’s Q3 Research Report.

 

Now you have a revenue plan!  Let’s move forward with what best-in-class sales leaders think about next.

 

 

Can you answer these three questions?

 

  1. How do I properly cover the sales addressable market with the right mix of direct/indirect resources and in what structure?

     

  2. Are we deploying the right resources to cover the market properly?

     

  3. Where do I have pockets of high growth that I can exploit?

     

About a year ago, SBI began offering an online diagnostic tool, free to whomever chose to diagnose potential issues with making their revenue growth number.  (You can access that tool here)  Since launching this, thousands of people have plotted where they feel they rank.  CEOs and CROs alike score their Coverage Model as one of the most concerning issues threatening their ability to make their revenue targets!  Why? There are as many stories that go into answering this question as there are participants but customizing your plan for your needs is the key.

 

A CASE STUDY IN THE COVERAGE DILEMMA: Work with one client recently can underscore the complexity; This company was witnessing explosive growth in every product line they were selling directly in APAC.  The issue was that the distributor they had been using for 10 years for several of their lines had flat sales despite years of efforts to mutually grow.  Find a new distributor? Take the business direct?  All would risk the base of business in the region.

 

In the end this client showed boldness; making a big bet by staffing up his teams throughout the region and cancelling his agreement with the distributor.  This was not a knee-jerk reaction to yet another quarterly review, it was the product of over a year’s worth of planning and integration into the larger corporate planning process.

 

 

Can you answer these three questions?

 

  1. How do I set appropriate quotas that are tied to territory potential?

     

  2. Do I have a rep compensation plan that is market competitive?

     

  3. Is our sales compensation plan incenting the desired behavior?

     

In an ideal state, 60% of your reps will attain +100% of their quota for the year.  If more are achieving at this level, chances are you are not demanding enough from your representatives and allowing C-players to proliferate your organization.  If you are below the 60%, it is a sign of a deeper-rooted issue (perhaps over-goaling or insufficient marketing efforts).  Either way moving into 2019 without first considering, at the rep/territory level, what is being produced today and what is possible tomorrow is a definite warning sign of future revenue gaps.  Download SBI’s Q3 research report here to see the 18 tests we use to evaluate a quota and comp plan.

 

A CASE STUDY IN POOR PLANNING FOR COMP & QUOTA: On the first day of a scheduled 13 week project my team ran the compensation numbers.  It was only July and yet this client had already spent more in 2017 than all of 2016 on incentive compensation.  Contests, lowered quotas, spiffs everywhere – yet revenue was flat.  My team looked at each other; what-the-heck?  Not surprisingly, this client’s turnover had nearly stopped.  Mediocrity in everything they did or tried to do became part of their culture.

 

The head of sales was replaced, and the new leader was strapped with two problems; setting a new quota and comp plan AND getting rid of a ton of dead weight.

 

 

Can you answer these three questions?

 

  1. Do I hire to an ‘A’ player scorecard with defined competencies and accountabilities by role?

     

  2. Are my Sales Managers and VPs ‘A’ players when compared against a peer group?

     

  3. Do I have a field operating system that drives weekly execution?

     

Most of the leaders that manage large sales organizations can think back to a time and a team they were a part of that had consistent outstanding results.  They never say, “we had a kick-ass CRM” or “the Marketing was awesome.”  They tell stories a team of individual contributors that possessed incredible talent; A-players. 

 

As the head of sales, whether you know it or not, your CEO thinks your talent level is an issue.  Your CFO thinks they are way overpaid and your CMO is disappointed with your team’s inability to convert great leads.  In fact, you are 13% more confident in your team’s ability to make the revenue target than the other functional leaders.  Our research show that you are overconfident.

 

Periodically you need to perform and assessment.  Managers and Reps alike must be evaluated against an objective set of competencies and accountabilities as well as intangibles like EQ and field presence.  The goal is not only to make your number but to identify who will play a critical role in determining your future.

 

Summing it up: “Great planning is the ability to translate strategy into execution.”

 

The significant difference we found, after over 4300 executive interviews, in a company’s ability to make their number was the effort they put into their planning process.  The alignment of their organizations and clarity of their message became the guiding light to successful year.   To achieve revenue growth above your competition and your industry none of these steps can be ignored.

 

See below for our “5 Must Haves for a Revenue Plan.”

 

 

“Hello 2019, we’re ready for you!”

 


 

Additional Resources

 

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ABOUT THE AUTHOR

John Auer

Sales and Marketing is a Science, not an Art. It can be perfected and success can be repeated.

John’s has a rich background in a variety of sales, marketing, and senior management positions which provide a unique perspective to solving his clients’ growth challenges.  He has a passion to find the root causes preventing sustainable revenue, market share, and market penetration goals.  His focus is to put in place the operational efficiency, effective infrastructures and emerging best-practices needed to drive revenues faster than his client’s competitors and industries.

 

Prior to SBI John was a Division Vice President at incentive supplier ITA Group. In 2016 his team drove a 137% y/y growth rate that accounted for over 70% of that company’s new business.  This is the “results focus” he used to succeed as a GM at Cintas and as a growth leader at Maritz and BI Worldwide.

 

His mantra; Sales and Marketing is a Science, not an Art.  It can be perfected and success can be repeated.

 

John’s primary expertise is in technology industry.  He has worked with nearly every major technology OEM, Distributors and many of the secondary manufacturers to design go-to-market programs that increase sales and capture mind share.

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