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Salesplan
1. The Concept
There are many factors that influence an annual sales quota; previous year’s achievement, historic growth or decline in a given sales territory, vertical market health, new products and services, competitive landscape etc.
Here is an example of a Salesplan:
As the illustration above outlines, you start with the Assigned Quota minus the forecasted revenue from Existing Accounts, thus calculating the New Business Gap.
Determine the Average Deal Size. When signing on a new account, what is the first year’s revenue likely to be, or better yet, using historical data, what has it been? This will tell us how many new deals/customers we need to achieve the new business target.
Next, think about the Pipeline. What is each salesperson’s Interested to Closed Ratio? Interested is defined as a prospect willing to meet with you. Closed is defined as ink on a contract or an actual deal. How many interested prospects are needed to result in one new deal, given the fact that many will not make it all the way through? We then take the number of New Deals Required to achieve the new business target and multiply it by the Interested to Closed ratio or the number of new, first meetings required to close one deal.
This answer is the total number of meetings required annually. Divide it by 12 for 12 months, or 10, if there are a few dead months in the year, depending on what you sell, and we will see how many meetings each salesperson will require to do his or her new business target.
When the salesperson books a new meeting and enters a new Opportunity into “interested,” they then reduce the monthly meeting goal by one, and so on until they have reached their monthly goal. This meeting goal should be set back to the total amount monthly. This will put a measurement on one of the key activities for success.
The next measurable element of the personal sales plan is account management. In our example, we noted that from the $80,000 annual sales quota, $67,000 should come from existing customers. How, you ask? Certainly not by waiting for them to call us”
We need to proactively manage the accounts on a regularly scheduled basis. We now need to calculate how many customers will contribute to the total over-achievement hunting goal of the $30,000. In most cases there are a few customers who drive the largest portion of the number. In this example, let’s say we have 4 customers that will account for $50,000, and the other $17,000 will come from 6 other customers.
2. Step-by-Step
a) Assigned Quota = Assigned Quarterly Sales Target (1)
b) Existing Accounts = Expected revenue from current Client/Organizations (2)
c) The difference remaining = New Business Gap. The amount the salesperson will actively need to seek.
d) Stretch Amount = The revenue figure the salesperson can be expected to overachieve in the quarter (3)
e) Adding Stretch Amount value to the New Business Gap will give the TOTAL Hunt Amount the salesperson will actively need to seek.
f) The TOTAL Target/Quarter is displayed which includes the value detailed for Existing Accounts.
g) Average Deal Size = The average revenue value of each deal over the quarterly period (4)
h) The TOTAL Hunt Amount is divided by the Average Deal Size to obtain the New Deals Required value.
i) Interested to Closed Ratio = The number of Opportunities required to reach one Closed deal (5)
j) New Meetings per Quarter = The New Deals Required value multiplied by the Interested to Closed Ratio.
k) Selling Months = The number of months the salesperson will actively sell during the quarter. As an example, Q3 may only be 2 months due to summer vacation time (6)
l) New Meetings Monthly = New Meetings per Quarter divided by Selling Months.
m) On completion of ALL Quarters the Annual sales targets will be available (7)
3. Salesplan Dashboard
Now that you have understood the concept of the Salesplan your most critical numbers for Sales Revenue are displayed at the top of Saleslook. This can be switched between the Financial Year and the current Quarter.
4. Salesplan Menu
The menu for Salesplan enables you to set your Fiscal Year Start (Jan 1 by default).
Your Report period can be switched at any time between Year and Quarter. As mentioned previously this will also be reflected in the Salesplan Dashboard.
The Quick Start Target is used if you simply wish to set a target sales quota for the year if you do not have the necessary information to fill in the various sections of the Saleslplan. Entering a number in this box and clicking Apply will override all other numbers.