Ask sales leaders what gets them most excited this time of year, and chances are it won’t be annual planning. Heading into Q4, sales leaders are laser-focused on hitting their year-end numbers. They want to spend time with customers and motivate reps to close deals. Most sales leaders recognize that annual planning is important but might find it hard to give it the amount of attention it deserves.
But here’s the thing: If you don’t give annual planning proper attention, you won’t come up with an achievable number for the coming year. And that will have enormous consequences for sales leaders, sales teams, and the company.
It’s not just conducting annual planning that’s important — how you go about it matters, too. Here are three key points to keep in mind.
Effective Sales Planning Starts With Alignment
Before you dive into sales-specific planning, it’s critical to align with other revenue engine leaders (i.e., marketing, product, and customer success) on overall business objectives for the coming year and to prioritize growth strategies for achieving them. The importance of this step cannot be overstated. Without it, sales, marketing, and product leaders each risk going it alone, trying to reach goals without support from the other revenue engine functions.
During this alignment phase, initial revenue goals for the coming year are established across go-to-market segments and route-to-market channels. These goals are communicated across the revenue functions so that everyone has a common understanding of what needs to be achieved in the coming year. (Clients can get a closer look at aligned revenue planning in our report, Introducing The Aligned Revenue Planning Process.)
Alignment efforts pay off: Forrester data shows that organizations that are aligned across the revenue engine grow 19% faster and are 15% more profitable than their peers.
Bring Data To The Discussion
Sales leaders should prepare for these alignment discussions to ensure goals are achievable. Work with the sales operations leader to gain a thorough understanding of current sales performance and capabilities, using inputs including:
- A sales performance analysis that details current-year sales performance, along with forecasts through the end of the year. The analysis should identify key trends and performance highlights and lowlights broken out by dimensions such as geography and vertical.
- Sales capacity/productivity modeling based on budgeted and actual headcount. Start with a model from the previous year’s planning cycle and modify it with any new assumptions about headcount and productivity changes.
Begin Your Planning Now
It can be difficult to balance the sales planning process with the demands of closing the current fiscal year, but doing so sets you up for success. Completing the annual planning process on time and delivering the sales compensation plan, quotas, and sales territories helps keep the sales force focused and productive. Forrester’s survey data shows that getting complete compensation packages to the sales force before the end of the first month of the fiscal year yields 4% higher quota attainment than delivering them later. If you haven’t begun the process (beginning with aligning with your marketing and product peers), don’t wait.
Having the right inputs and the right foundation will enable you to set an achievable number, keep the sales force motivated, and set the company up for success. For more insights and guidance on building and executing an effective sales annual plan, join me and my colleagues Robert Muñoz and Anne Slough for a fast-paced and engaging LinkedIn Live session on Tuesday, October 12. Learn more.