What is Sales Planning? How to Create a Sales Plan [Full Guide]

Sales planning is the process of creating a comprehensive plan to achieve a company's sales goals and objectives. An effective sales plan is crucial for guiding business growth, acquiring new customers, and increasing revenue and profits.

Sales planning involves analyzing past sales performance, setting realistic targets, identifying the right markets and customer segments, determining sales strategies, building the sales team, and monitoring progress. The end result is a detailed roadmap focused on profitably growing sales.

Creating a thoughtful sales plan brings many benefits:

• Provides clarity on sales objectives and how to achieve them
• Allows the sales team to focus their efforts in the right areas
• Helps forecast and predict future sales more accurately
• Reveals market opportunities to target
• Ensures the sales process is optimized for success
• Keeps the sales team motivated and on track
• Enables the business to allocate resources effectively

In short, sales planning is a strategic process that directly impacts revenue growth. It allows companies to gain a competitive edge and fully capitalize on sales opportunities. With a solid sales plan in place, businesses can pursue their growth ambitions in a focused, purposeful manner.

Steps for Creating a Sales Plan

A strategic sales plan follows a step-by-step process to ensure it aligns with the company's overall business goals. Here are the key steps:

• Set sales goals and objectives - Begin by defining specific, measurable goals for revenue, profit, market share, new accounts etc. Consider short and long-term timeframes.
• Analyze current sales performance - Review sales data, metrics and KPIs to understand what's working and what needs improvement. Look at sales by product, channel, geography and other segments.
• Identify target markets and customers - Define your ideal customer profiles and target markets with the greatest opportunities for growth and profitability. Use market research and customer data.
• Forecast sales - Make educated projections for future sales based on historical performance, growth trends, industry outlook and goals. Build different revenue scenarios.
• Develop strategies and tactics - Determine the strategies around product, pricing, promotion, distribution and selling approach to achieve the sales goals. Define specific programs and tactical plans.
• Build the sales team - Assess capabilities of the sales team and make necessary changes to structure, roles, responsibilities and headcount to support the sales plan.
• Manage and monitor the plan - Track progress versus goals, adjust strategies as needed and document learnings to refine the next planning cycle. Maintain a living sales plan.

Setting Sales Goals and Objectives

Setting clear sales goals and objectives is a critical first step when developing your sales plan. Goals provide direction, motivation, and a way to measure success. When setting goals, follow the S.M.A.R.T. framework:

Specific - Goals should be detailed and clearly defined. Avoid vague goals like "increase sales." Instead, set specific targets like "increase sales in the Northeast region by 10%."

Measurable - Goals must be quantifiable so you can track progress. Set measurable goals like "acquire 50 new customers" or "generate $500k in recurring revenue."

Achievable - Goals should be challenging but attainable. Set realistic goals based on current sales capabilities and capacity. Stretch goals motivate teams, while impossible goals demoralize.

Relevant - Goals must align with overall business objectives and strategies. Sales goals should support overarching targets like profitability, market share, etc.

Time-bound - Goals need deadlines. This creates urgency and prompts action. Set timeframes like "increase market share by 2% over the next 6 months."

In addition to broad revenue and growth goals, identify key sales objectives like:

• Acquiring new customers in target segments
• Increasing sales from existing accounts
• Improving customer retention rates
• Growing share of wallet with current clients
• Enhancing sales efficiency and productivity
• Expanding into new markets and geographies
• Launching new products and services

Setting aligned sales goals and objectives provides focus for your sales plan and clarity on what success looks like.

Analyzing Current Sales Performance

Before setting sales goals and making plans for the future, it's important to take stock of your current sales performance. This involves thoroughly reviewing past sales data to identify strengths and opportunities for improvement.

• Gather data on past sales revenue, volume, conversions, average order value, and other key metrics. Break this down by product, service, channel, sales rep, territory, customer segment, or other dimensions.
• Compare sales numbers against targets and prior periods to spot positive and negative trends. Look at both year-over-year growth and sequential growth month-to-month or quarter-to-quarter.
• Analyze win/loss rates for deals and identify common reasons proposals are accepted vs. rejected. Review customer feedback and survey data.
• Look at lead sources to see which channels generate the most prospects. Track lead-to-customer conversion rates.
• Review customer lifetime value data to identify your most valuable customers. Look at retention and churn rates.
• Identify which products or services drive the most revenue and margin. Look for upsell opportunities.
• See where top sales reps excel and what approaches, skills, or techniques help them achieve quotas. Identify areas of weakness.
• Look for patterns, insights, or areas for improvement across all sales data. What’s working and what needs fixing?

This analysis provides an honest assessment of sales performance and helps pinpoint priorities for improvement. The data directly feeds into setting attainable sales goals and plans.

Identifying Target Markets and Customers

A key part of sales planning is identifying who you want to sell to. This involves analyzing your target markets and ideal customer profiles.

Customer Profiling

Develop detailed profiles of your ideal customers. Look at demographics, behaviors, needs and motivations. Ask questions like:

• What are their pain points and needs?
• What value can we provide them?
• What are their buying habits?
• What are their objections we need to overcome?

Create hypothetical customer personas that represent your target segments. Give them names, backgrounds, goals and challenges.

Market Segmentation

Divide your total addressable market into distinct segments. Segment by factors like:

• Demographics - age, income, geography, gender
• Firmographics - industry, size, technologies used
• Behaviors - usage rate, loyalty, benefits sought
• Psychographics - attitudes, interests, values

Prioritize the segments with the highest growth potential and fit with your offerings. Focus your sales and marketing efforts on your core target segments.

Analyze the market size, growth rates and concentration of each segment. Assess the competitive landscape as well. Identify underserved segments you can capture.

Forecasting Sales

Accurately forecasting sales is a critical component of the sales planning process. Sales forecasts estimate future sales volumes and revenues and help set realistic performance goals. There are several methods companies can use to forecast sales:

• Historical performance analysis - Analyzing past sales data and trends provides a baseline for future projections. Looking at seasonal fluctuations, product life cycles, and changes in past performance helps inform forecasts.
• Market analysis - Researching overall market size and growth, customer demand, competitive factors, and economic conditions provides context for sales predictions. Stronger markets and opportunities signal higher potential sales.
• Sales force estimates - Your sales team has direct customer insights. Seeking input from sales reps on their pipelines and projections taps into valuable knowledge. Combine with historical data.
• Executive opinions - Leadership may have strategic insights into expected performance. However, executive estimates alone are less reliable than data-driven forecasts.
• Predictive analytics - Statistical modeling and AI tools can analyze multiple data points and detect hard-to-see patterns. This enables more sophisticated predictive sales forecasts.

To convert sales goals into a forecast, break objectives down into monthly and quarterly targets. Apply forecasting methods to estimate volumes by product line, customer segment, sales region - whatever aligns with your reporting structure. Compare forecasts to stretch goals and historical trends. Adjust projections as needed to create an ambitious but grounded sales forecast. Update forecasts regularly as new data comes in.

Developing Strategies and Tactics

A sales plan should outline the strategies and tactics your sales team will use to achieve its goals and objectives. This section of the plan focuses on the "how" - how you will actually execute the plan. Some key elements to include in this section:

Pricing

Determine appropriate pricing for your products or services. Consider your costs, customer demand, competitive landscape, and pricing elasticity. Set standard prices or dynamic pricing models. Establish discounts and promotions. Outline the rationale behind your pricing approach.

Promotions

Plan promotional activities to boost sales. This may include advertising, email marketing, social media campaigns, trade shows, sales contests, customer loyalty programs, and more. Promotions help raise brand awareness and incentivize purchases. Coordinate promotions with seasonal peaks, new product launches, or low sales periods.

Sales Process

Map out the end-to-end sales process your team will follow to convert prospects into customers. Include steps for lead generation, initial outreach, needs assessment, presentations/demos, handling objections, closing the sale, and customer onboarding. Define sales workflows and standard operating procedures.

Learn 7 CRM Best Practices For Every Business

Partnerships

Pursue strategic partnerships with other companies to expand your reach. Partner with companies that have an overlapping or complementary audience to yours. Co-marketing partnerships can help promote your brand to new segments. Referral partnerships drive new leads and customers. Channel partnerships get your product distributed by resellers.

Building the Sales Team

A successful sales plan requires having the right sales team in place. This involves recruiting top sales talent, providing ongoing training, setting compensation, and developing an optimal sales organization structure.

Recruiting

Recruiting exceptional salespeople is crucial. Look for candidates with the following attributes:

• Proven sales track record and ability to meet/exceed targets
• In-depth knowledge of your products/services and industry
• Strong communication and interpersonal skills
• Tenacity and motivation to succeed
• Experience managing complex sales cycles
• Familiarity with your target customer profiles

Conduct interviews to assess sales capabilities and fit with your company culture. Check references to confirm past sales success.

Training

Provide comprehensive onboarding and ongoing sales training to equip your team with the skills to effectively execute the sales plan. Training may cover:

• Your company's products, services, and competitive advantages
• Industry knowledge
• Ideal customer profiles
• Consultative selling techniques and objection handling
• Negotiation strategies
• Sales technology such as Glyph AI to transcribe sales call and extract insights/CRM proficiency

Role playing and sales simulations can be used to hone selling skills. Experienced sales reps can mentor newer hires.

Compensation

The compensation structure should incentivize salespeople to achieve goals and exceed targets. Common formats include:

• Base salary plus commission on sales
• Commission only compensation
• Performance bonuses for hitting certain targets

Compensation should be competitive to attract and retain top sales talent. Non-monetary rewards like recognition programs also help motivate the sales team.

Structure

Consider the optimal sales organization structure, which may include:

• Geographic-based regions with account executives owning relationships
• Product specialists focused on selling specific offerings
• Inside sales vs field sales roles
• Sales management hierarchy

The structure should align to your sales objectives and how you go to market. Adjustments may be required as the business scales.

Having the right sales team and organization in place is critical for sales plan execution and performance. Invest in building a high-caliber sales organization.

Managing and Monitoring the Sales Plan

Once the sales plan is in place, it's important to actively manage and monitor it to track progress and make adjustments as needed. Here are some tips for overseeing the plan:

• Set up a system to track key performance metrics like leads generated, sales closed, and revenue against goals. Use CRM software or create a simple spreadsheet to monitor the numbers.
• Schedule regular reviews of the sales pipeline to ensure deals are progressing. Identify any bottlenecks or problem areas.
• Analyze win/loss ratios to understand why some deals close while others stall. Look for patterns and insights to improve close rates.
• Review activity levels of salespeople to ensure they are executing planned tactics and strategies. Provide coaching to help them meet objectives.
• Monitor market conditions and competitive landscape for changes that may impact the sales plan. Adjust strategies as needed.
• Create a monthly or quarterly reporting process to update leadership on sales plan progress. Highlight wins and shortcomings.
• Make adjustments to the sales plan as needed. Shift resources or strategies to capitalize on new opportunities or address issues.
• Provide feedback, training, and motivation to the sales team to keep them focused on hitting goals. Celebrate wins when goals are met.
• Revisit longer-term goals at least quarterly. Make revisions to the plan if the overall sales environment shifts significantly.

Actively managing and monitoring the sales plan is critical for ensuring its success. With regular oversight, issues can be quickly addressed while wins provide insight into what's working that can be replicated. This increases the likelihood of achieving the sales goals originally set.

Tips for Creating an Effective Sales Plan

An effective sales plan provides a roadmap to help your sales team achieve its goals. Here are some tips for creating a plan that works:

Set realistic, measurable goals. Your sales goals should be challenging but attainable based on past performance, market conditions, and competitive analysis. Break major goals down into smaller objectives.

Conduct thorough market research. Analyze your target customers, competitors, pricing, and positioning. Look for gaps, opportunities, and threats. Use this data to inform your strategies.

Map out detailed strategies and tactics. Outline the specific actions, campaigns, and initiatives you'll implement to hit your targets. Get granular on timelines, budgets, resources, and responsibilities.

Build a strong sales team. Assess your current sales talent and structure. Determine if you need more reps, different skills, specialized roles, training, etc. Invest in your team's growth.

Leverage templates and tools. Use a sales plan template to ensure you cover all the key sections. Build projections and forecasts using spreadsheets. Automate where possible.

Monitor progress frequently. Set regular check-ins to review metrics versus goals. Make quick adjustments to underperforming strategies. Celebrate wins and learnings.

Overcommunicate the plan. Ensure all stakeholders understand the sales plan goals, strategies, and their role. Lack of buy-in can undermine execution.

Learn from experience. Review what worked and didn't work each sales cycle. Feed lessons learned back into the next planning process to improve over time.

With thoughtful preparation, realistic targets, operational details, and adaptability, your sales plan can successfully guide revenue growth.

‍

Learn How to Reschedule Meetings Respectfully