Sales Planning during Economic Crisis
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Free Download - Are You Doing the Moon Walk --- Going Backwards While Moving Forward By Dr. Rick Johnson |
A formal sales plan for 2010 is probably the most important activity that you should engage in during the economic challenges we are facing now and throughout the year. I am not talking about the typical DREF, (Delusional Rectal Exaggerated Forecast) that many of us have become accustomed to. I am talking about a realistic, documented plan that lists the specific activities required to accomplish the objectives set for targeted accounts with identified growth potential... A sales plan is a schedule of events and responsibilities that details the actions to be taken in order to accomplish the goals and objectives necessary to be successful during these turbulent times. The plan ensures everyone knows what needs to get done, coordinates their efforts and keeps close track of progress.
Sales plans must define the objectives, timeline and resources required to meet the growth objectives of the business unit, department, branch or specific territory. It should also detail how the company will achieve growth, profit and product objectives.
The market, like most markets, has not avoided transition. Business planning is an essential offensive strategy recognizing market transition in creating competitive advantage. But, the overall business planning alone is not enough. Sales drive the company's success. Consequently, a sales plan must become mandatory if you are to succeed in this economic environment.
Analysis of opportunities is useless if it doesn't degenerate into work. Sales planning, by definition, results in action plans for individual territories outlining specific target accounts with defined goals and initiatives.
Territory PlanningThe individual territory may find that its success in their own market depends upon the business segments they service and their willingness to compete within these segments. This segmentation is often defined by the buying habits and the individual needs of its members. A critical factor in developing the individual territory sales plan is understanding and differentiating activity based on this market segmentation. Understanding local market segmentation starts with profiling your customer base. Demographics and customers "Rules of Engagement" are typical criteria.
ForecastingForecasting is an important part of the planning process as it becomes the platform for developing target account action plans. Historical data is essential to predictability but forecasting is exactly what the term suggests, predicting what is going to happen over the course of the next 12 months. This is a critical function of the planning process that is often taken much too lightly. Using the Pareto Rule, 20% of your customers will account for 80% of your business, is a good starting point. That 20% must be looked at closely. True potential must be examined at every account that makes up the 20%. The initial forecast starts with the sales representative but it is up to Branch Management or ownership to demand documented reasons for the numbers at each of the accounts that make up 80% of the business. This is not an email communication or a passing conversation; this is a detailed territory review with every sales rep. This is critical during tough economic times.
This review includes gross margin forecast discussions. A clearly defined action plan aimed at achieving specific results at each targeted customer should be documented.
These action plans should include:
- Clearly defined objectives by product, by segment
- Clearly defined rules and responsibilities of all employees involved in accomplishing the defined objectives
- Identified risks and opportunities
- A scorecard for achievement listing key indicators of success should be developed
- Regular monthly plan review meetings must be established
Margin Impact
Margin management is not rocket science. Improving gross margin is simple. You must either raise prices or reduce cost of goods sold. But, there is a little more to it than that when you consider net profit. There may be a lot of hidden profits waiting for you to find them lurking within your pricing system itself. The good news is that this can produce tremendous gain with little pain. Go look at what you are doing and how you are doing it. Also, take advantage of opportunities on the buy side that are a result of the current economic conditions.
Margin Implications
- Small changes in margin have large changes in the sales breakeven point.
- Sales Reps tend to get afraid of raising prices in soft markets. Some fear is real; most of it is chasing ghosts.
- They don't realize the consequences of failure, i.e. layoffs, lower service levels.
Margin Actions
- Is every customer buying off of the current price sheets?
- Are you charging freight out and other fees to the small accounts?
- Do all the inside and outside sales reps know that charging the last price paid is easy but wrong? It ignores small price increase opportunities.
There are three important attributes to a good sales plan:
- An appropriate level of detail - enough to guide the work, but not so much that it becomes overwhelming, confusing or unnecessarily constrains creativity
- A format that allows for periodic reports on progress toward the specific goals and objectives
- A structure that coincides with the company plan (whether it is strategic or a contingency plan)- the goal statements for the company plan and the sales plan are one in the same
Just as monthly financial statements often present a budget for revenues and expenses and then report actual figures for a given time period, so should sales plans allow for the same type of comparison: the plan declares the "forecasted revenue" work in terms of goals and objectives for each targeted account and reports the actual progress on a monthly or, perhaps, quarterly basis. This budget-to-actual report gives a clear reading on how the territory is performing.
Sales Planning during Economic Crisis - To learn more about this author, visit Dr. Rick Johnson's Website.
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David AchesonDavid Acheson is the founder of DCJA Consultancy. DCJA Consultancy is a management consultancy business specialising in B2B sales consultancy. They offer bespoke and packaged sales consultancy including Sales Optimisation Review, Interim Sales Management, Sales & Marketing Review, 1:1 Sales & Management Staff Analysis, Management Training, Solution Sales Training, Creation of New Pay Plan, KPI's, run Customer Feedback Campaigns, assist with Recruitment, Coaching, Appraisals and set up Strategic Marketing Campaigns. David spent his early career in accountancy and then moved into sales in 1982, working in Office Equipment, IT, Advertising, Training, Outsourcing and Consultancy. He has held many Senior Positions in SMBs and Global Organisations including Head of Sales Operations & Head of Business Development. His knowledge, skills and great experience of the Sales Industry has led to David making keynote speeches and running educational sessions to key businesses through organisations including The Chamber of Commerce and Business Link. - Visit David Acheson's Website |
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Dave KurlanDave Kurlan is the founder and CEO of Objective Management Group, Inc., the industry leader in sales assessments and sales force evaluations, and the CEO of David Kurlan & Associates, Inc., a consulting firm specializing in sales force development. Dave has been a top rated speaker at Inc. Magazine's Conference on Growing the Company, the Sales & Marketing Management Conference and the Gazelles Sales & Marketing Summit. He has been featured on radio and TV, including World Business Review with General Norman Schwarzkopf, in Inc. Magazine, Selling Power Magazine, Sales & Marketing Management Magazine and Incentive Magazine. He is the author of Mindless Selling and Baseline Selling – How to Become a Sales Superstar by Using What You Already Know about the Game of Baseball. He created and wrote STAR, a proprietary recruiting process for hiring great salespeople, and he writes Understanding the Sales Force, a popular business Blog and is a contributing author to The Death of 20th Century Selling and 101 Great Ways to Improve Your Life, Volume 2. - Visit Dave Kurlan's Website |
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Leanne Hoagland-SmithAre your sales where you want them to be? Will you be one of the few who achieves sales or business success or one of the many who have failed to change? Are you tired of being told you are like everyone else? Then you may find my first book on sales of interest. Be the Red Jacket in the Sea of Gray Suits, The Keys to Unlocking Sales available at Amazon or at http://www.processspecialist.com/red-jacket.htm. This book is a reflection of my no-nonsense approach to improving sales to overall business results. If you are truly committed to making sustainable changes, then I can help you secure a positive return on your investment because I focus on executable solutions not telling you the problems you already know you have. From training to corporate (group) coaching to executive one on one coaching, my approach is to assess, create awareness, build a goal driven action plan and then execute. The bottom line question is "Not do you or your employees know it, but do you or they want to do it?" Please call for a free strategy session at 219.759.5601. - Visit Leanne Hoagland-Smith's Website |
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Linda RichardsonLinda Richardson is the Founder and Executive Chairwoman of Richardson, a global sales training and performance improvement company. As a recognized leader in the industry, she has won the coveted Stevie Award for Lifetime Achievement in Sales Excellence and she was identified by Training Industry, Inc. as one of the “Top 20 Most Influential Training Professionals.” Ms. Richardson is credited with the movement to Consultative Selling and is the author of ten books on selling and sales management, including Sales Coaching — Making the Great Leap from Sales Manager to Sales Coach, and Stop Telling, Start Selling. She teaches sales and management at the Wharton Graduate School of the University of Pennsylvania and the Wharton Executive Development Center. Linda is a frequent speaker at industry and client conferences, has been published extensively in industry and training journals, and has been featured in numerous publications, including The Wall Street Journal, Forbes, Nation’s Business, Selling Power, Success, and The Conference Board Magazine. Learn more about Richardson's sales training and performance improvement solutions at http://www.richardson.com web - Visit Linda Richardson's Website |
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John BrennanJohn Brennan Ed.D. Dr. Brennan is President of Interpersonal Development, LLC, a training and development firm. Interpersonal Development has provided sales training and coaching to more than 3,000 sales reps from over 100 companies. A native of Australia, Dr. Brennan received his doctorate from the University of Rochester. His dissertation researched the effectiveness of Behavioral Modeling Technology in training people in interpersonal skills. While he has spent most of his career designing or delivering training, he was also a Vice-President of Sales of a training and development franchise with operations in 25 markets. Dr. Brennan has designed and delivered sales training in North America, Asia, Europe, Australia and the Middle East. He has been a guest speaker at numerous national and regional professional conferences. When Microsoft wanted Best Practices articles on sales for their web site, they called Dr. Brennan. The results are at http://office.microsoft.com/en-us/FX011387391033.aspx His firm’s clients have included Volvo, The Prudential, Merrill Lynch, Eastman Kodak, Gannett, Equifax Europe, the Economist Group and countless small businesses. - Visit John Brennan's Website |
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George LudwigGeorge Ludwig is a recognized authority on sales strategy and peak performance psychology. An international speaker, trainer, and corporate consultant, he helps clients like Johnson & Johnson, Abbott Laboratories, Northwestern Mutual, CIGNA, and numerous others improve sales force effectiveness and performance. Though it's George's strategies and processes that help corporations increase productivity and performance, it's his tremendous energy and dynamism that spark the transformation. Again and again, clients remark on his amazing ability to unleash human capacity and inspire men and women to break out of their comfort zones. The result is a whole new type of salesperson. His customized presentations teach achievers to make stunning advances in their lives. From helping salespeople realize cherished dreams to helping corporations exponentially accelerate revenue streams, George Ludwig leaves audiences and individuals empowered, emboldened, and clamoring for more. George is the best-selling author of Power Selling: Seven Strategies for Cracking the Sales Code and Wise Moves: 60 Quick Tips to Improve Your Position in Life & Business. - Visit George Ludwig's Website |
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Anne BarrAnne Barr has over 26 years experience in sales and marketing, six years as a franchisee. She has assisted over 367 business owners and purchasers to achieve their goals in career change, transition and exit strategy. She holds the designation of Certified Franchise Executive from the International Franchise Association, Certified Business Intermediary from the International Business Brokers Association and Board Certified Broker from the Texas Association of Business Brokers. Anne is active in professional organizations, networking groups and volunteers for non-profit entities. As owner/operator of four successful businesses, Anne has proven people skills and enjoys helping clients find the right "fit" in business ownership. Visit www.FranchiseOpportunitySpecialist.com for more information about me and my company. - Visit Anne Barr's Website |
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