A well made sales plan is a prerequisite to establishing a growing business. A sales plan helps to systematically generate leads and convert those into actual customers. It also – in the long term – helps to ensure profitability, sustainability and reliability to your business.
It also plays a critical role in improving your customer relationship, which in turn will help to establish credibility among customers and in the industry.
Now let us look at the 7 elements of a sales plan
1. Sales goals and objectives
It is essential for businesses to clearly define their sales objectives for a certain period. This will help to channel your sales team’s effort in the right direction to achieve maximum output. Sales goals and objectives could be of three types
- Financial goals: improving top line and bottom line, increasing sales from a particular product or category of products etc.
- Market goals: improving market penetration of existing market and venturing into new geographies or products
- Customer goals: improve customer satisfaction, customer retention etc.
Make sure that you have identified your objectives in each of the above areas. Your goals should be derived from your business’s strategy and vision for the period which you are creating the plan.
2. Strategy and vision
Sales goals have to align with the overall business goals to attract focus and investment from the company management. This is more evident in large businesses, when each team tries to get the largest piece of the ‘budget pie’.
For example, if the company’s vision is to expand to maximum number of geographies, then it has to be a KRA (key result area) in the sales plan. If the company aims to improve it’s bottom line, the plan needs to have cost cutting measures in place.
To ensure this happens, sales leaders need to be involved end to end in putting together the plan.
3. Setting sales target
Achieving the sales target is the most important KPI (key performance indicator) for sales people. The target set has to be logical and achievable. Setting it too high will result in the sales force not being able to perform, which can lead to churn due to unsatisfied employees. On the other hand, if it is set too low, it will hit the cost of the company in the form of sales commissions.Click to enlighten your network with this piece of knowledgeClick To Tweet
You can use the following guidelines while setting the target
- Use historical or past data
- Benchmark with industry standards or norms
- Look at total market size and the spectrum of services and products you can offer, and set the target accordingly
- Use your sales pipeline to estimate the potential business value
4. Target account/customer list
You got to have a defined list of prospects you want to target for the given period. But for sure you cannot have a laundry list of customers. You have to optimize the list to target the right set of customers based on the following factors
- Revenue/size of the prospect: large customers can give you large amount of business
- Conversion possibility: probability of acquiring the customer
- Strategic reasons: an example is if the customer belongs to a new business domain your company wants to enter
Preparing an optimized target customer list is crucial to improving overall sales performance as well.
5. Customer acquisition plan
Customer acquisition is one of the largest factors contributing to a company’s cost. Using the right channels at the right time will not only help reduce cost, but also reach your customers easily.
You could use a combination of channels such as social media, TV advertisements, paper media etc. to acquire your customers and promote your product or service. You can look at your competitors to see what channels they are using and what works in the industry the best.
Personal networking is another effective method to generate more targeted leads with high conversion rate.
6. Milestone plan
Just like a project plan, sales plan also requires a milestone based approach. It has to be created for a defined time period with expected outcomes from each quarter or period unit (or milestone).
Milestone plan will be laid out based on the sales goals and objectives defined as a part of the overall plan. The target at the end of the period can be split into smaller target units that need to be achieved in every milestone.
Say, you are preparing your sales plan for the next year. If your target is to acquire 1000 new customers over the period, you can set minimum quarterly targets as say 200. This will help you be consistent about your approach and ensure you achieve the target at the end of the period.
7. Financial plan
In your financial plan, you have to account for all your expenses, revenue forecast, cost optimization measures and implementation plan. You also need to outline the budget allocation to each activity or teams within. Further, it needs to be designed considering your business’s strategy, vision and goals.
All the seven elements are to be embedded into your sales plan to help your business grow in the long run. Execution of the plan is equally important. Optimize your processes and train your people to ensure the best possible outcome.
Please feel free to share your views on this as well in the comments section