With Thanksgiving over and January fast approaching, sales leaders and teams are pivoting their focus to next year. As you set your sales team strategy for the upcoming year, it’s important to keep the current year in context. After all, when you’re driving to a vacation destination, you can’t plan how far you want to drive tomorrow if you don’t know where you will end up today.
While it’s tempting to project the current trend in your reps’ performance onto the new calendar year, that assumes there will be no changes in the general economic and competitive environments your organization currently faces. Sticking with the vacation metaphor, that would be like getting in the car and just driving – not knowing where you are going, when you want to get there, or how you are going to get there.
Planning for next year requires you to consider not just how much revenue you will receive, but also how much of that lands in certain buckets: revenue per product, revenue per customer type (such as new and existing customers), and revenue per channel (such as subscriptions and one-time sales).
Numbers Don’t Lie
A few years ago, one of our clients was in the enviable position of being the majority player in its vertical. That naturally drew a series of new competitors to the space. Because we recommend that our clients review their revenue sources annually and focus on key metrics, we picked up signs that the client’s competitors were undercutting it in price.
Our client wouldn’t be the default choice just because it was there first, so we needed to help the company differentiate itself, which required new strategy tactics. Proactive planning was key to setting the company up for success.
There are specific metrics you should focus on to assess the current year. These information points inform your objectives and determine your sales team strategy for the year ahead:
- Annual sales vs. quota: This ratio not only lets you know whether your team is hitting its goals, but it’s also an indication of whether your business is growing or regressing. Looking at the ratio over longer periods also helps you determine whether goals and quotas are being accurately projected.
- Sales by product type: This determines which products are growing and which ones are struggling. By tracking this, your team will be able to identify which products are more profitable. This also helps determine how best to support and price each product.
- Sales by customer segment: Analyzing this percentage helps inform your advertising strategy. This will help you understand which demographics are more profitable and whether competitors are impacting sales to certain customers.
- Conversion rates: Establishing these key performance indicators at different stages of the sales cycle helps you spot friction points that need addressing. Where conversion rates are declining, more “at-bats” will be needed to get to the same sales level.
5 Strategic Steps for Planning Your Course of Action
Armed with the right metrics and a clearer idea of how the current year is playing out, your sales team will be ready to start preparing for the year ahead.
1. Go through the sales planning and forecasting process. Before year-end, and certainly before heading into the next sales reporting period, develop a tactical sales plan that is executable and realistic given the business conditions you face, and anticipate the environment in the year ahead.
2. Revisit your lead generation activities. Review your customer relationship management system to learn where last year’s clients came from, and consider adjusting your strategy, if needed, to be present wherever they are looking for products and services. While developing personal relationships remains critical to many industries, a strong digital presence and experience are equally important to the effectiveness of your lead generation activities.
3. Align your selling process with your buyers’ processes. With the change in buyers’ behavior across industries, understanding the different ways a buyer can reach you requires you to understand buyers’ patterns. For example, customers are relying more on their own research. Identifying ways to assist your customers in research ensures you will still receive consideration in your prospects’ decision-making process. This new reality has made mapping customer journeys even more critical to your team’s success.
4. Determine where you should be spending your time. It’s long been asserted in business that 80% of your business comes from 20% of your clients. Given that business now moves at the speed of the internet, time management practices – spending the right amount with each prospect or customer based on the revenue you hope to realize – are essential to your sales reps’ success and to your bottom line. Look for ways to help them make better use of their time by examining your internal processes.
5. Prep your team for what’s to come. Debrief your salespeople to understand what they were hearing and seeing out in the field. Also, have each rep go through an individual sales planning and forecasting process. Review it with the rep, and have him or her revise it as needed. Then, share the information with your team to ensure you are all working toward arriving at the same destination, in the same way, and on the same schedule.
Measure, Plan, Repeat
When everyone knows where he or she is headed and is properly equipped for getting there, you’ll find that it’s much easier to navigate your way through current and changing business conditions. Also, you and your sales team are more likely to experience a smoother ride while still meeting your firm’s goals.
Mark Thacker is the president of Sales Xceleration, a firm specializing in sales strategy, sales process, and sales execution. Mark has a 33-year history of sales leadership and success in diverse industries.
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