HARDISON’S TIPS – SEPTEMBER 7, 2021 – Out With the Old, In With the New1
Every year, it happens the same way. You check your calendar one day and realize that Q3 is nearly over. The year has flown by, and it’s already time to start setting sales goals for next year.
The task of regularly reviewing and revising your sales plan is critical. Looking ahead to next year, the routine task of creating sales goals is further complicated by a changing sales environment characterized by digital selling and rapidly changing buyer behaviors. With this in mind, should you set your sales goals to assume you’ll go back to normal? Or should you anticipate having to adjust to the new normal?
Laying Out the Framework
Under usual circumstances, this is the time of year you’d be mapping out your sales goals. You would start with questions like: “How much revenue do I want to have next year?” “How do I want that revenue broken down by customer type (new customers, existing customers, etc.)?” “How do I want that revenue broken down by customer vertical, product, geography, etc.?”
Once you decided where you wanted to go, it would be time to create a plan. You would make any changes necessary to hit those sales goals, tracking and pivoting as necessary.
The process is similar this year, but it’s vital that you consider your KPIs in light of the new sales landscape and tailor your strategies accordingly. For instance, think throughhow to adapt the composition of your sales framework and your team to support next year’s approach to revenue acquisition, compensation plans, sales strategy, and KPIs/metrics.
A Work in Progress
Sales managers must constantly think of their planning and forecasts as “working documents.” Why? A sales forecast is your data-based opinion on future revenue at that moment. Reality is rarely 100% consistent with your prediction from months or years ago, though.
Imagine that you’re forecasting future revenue before a large competitor comes into your space. You would probably assume, optimistically, that you’d retain a large percentage of your existing customers while achieving a high closing rate on new customers. Your future revenue was based on those things actually happening.
Now imagine that a large competitor has come out with a lower-cost alternative to your product. This competitor is quickly poaching your customers and making it hard for you to attract new customers. Without a fluid sales framework, you’d spend too much because you planned for your costs to align with a higher revenue level. You assumed the revenue would still come through, but you would end up judging your performance by a standard that is no longer attainable.
