Your Sales Strategy

4. Sales Planning

4.1 Together with your sales employees, prepare your sales forecast.

This is a detailed breakdown of the sales you plan to achieve by month, by customer and by product.

• Base forecasts on sales achieved over the last year. Take into account information about major new orders, changes to customers' buying habits, and other factors, such as pricing and marketing activities.
• State the likelihood of achieving sales, using a percentage figure, and set out when you expect to close them.
• Agree how many leads are needed to achieve the forecasted growth. Set out how many leads should come from new and existing customers.
• Identify customers by name, or by the number you expect to sell to.
• Define the number of sales you expect from a set number of visits, calls or other contacts (your sales 'conversion' rate).
• Determine the frequency and levels of sales activity needed to achieve targets. For example, allocate the amount of time to be spent on each account. Remember to include the whole range of activities needed to complete a sale.
• Decide how many sales people you need to achieve your sales targets, and allocate territories or accounts (see 5.3).
• Take into account your sales costs, including promotional materials, salaries and equipment (see 6.1). Plan sales costs in proportion to the returns you expect to make.

4.2 Prepare your annual sales budget.

This is a summary of the sales forecast. It does not change, and acts as a benchmark that you can compare your updated forecasts with.

• Prepare pessimistic, realistic and optimistic versions of your budget, and plan what you will do in each case.

4.3 Revise your sales forecasts quarterly or annually, using past performance as a guide.

• Compare sales achieved with your sales budget (see 4.2).
• If there is a significant difference between the two figures, find out why.You may need to plan new sales initiatives or adjust your sales expenditure.

4.4 Be aware of sales cycles. The total amount of time taken to complete a sale can have a critical impact on your cashflow.

• If you have a new, untested product or service, it may take longer to make sales.
• Work with customers' decision-making habits. For example, large organisations may be slower to reach decisions.
• Time sales drives and product launches well. For example, suppliers to the retail industry are geared to making sales at exhibitions at the beginning of each year.

4.5 Co-ordinate sales with your other business activities.

For example, do not plan for sales that your production processes cannot fulfil.

• Plan sales campaigns to support promotional efforts (eg new product launches).
• When you have defined your sales strategy, you may need to adjust your marketing plan accordingly.For example, your sales people may identify a new customer group to target.