The Elements of a Successful Sales Plan
Q: I'm developing a sales plan for my business. What elements should I include?
A: OK, my sales plan...Let's see, it's around here somewhere...Is it the first week of March already? It's the first week of the last month of the first quarter, and I don't have my sales plan written! Oh, thank you for giving me a wake-up call. I totally forgot to write my 2004 sales plan!
How about you and I create our battle plan together? I guarantee that by the end of this article, you'll know the "who, where, why, when and how" that will drive your sales work so you'll exceed your quota for this year.
A Sales Plan Defined
Our sales plan should be short, simple and to the point. It's basically our strategic and tactical plan for acquiring new business, growing our existing book of business and making and/or exceeding our sales quota within our sales territory. Typically, a healthy mix would include 75 percent of your sales quota from new business and 25 percent of your quota from add-on business from your existing customers.
There are four basic parts of a sales plan:
- New business acquisition strategies
- New business acquisition tactics
- Existing business growth strategies
- Existing business growth tactics
Before you start, you need to get a handle on some
- Sales quota: This critical element of your plan sets the tempo of your efforts throughout the year and provides quarterly, monthly, weekly and even daily sub-goals for you to achieve.
- Sales territory: Refers to the geographic area, list of named accounts or specific market niche you have been assigned to in which you are to sell your products, services and solutions.
- Strategies: The plan necessary to accomplish your goal.
- Tactics: The steps necessary to carry out the plan.
New Business Acquisition Strategies and Tactics
Include the following four strategies in your sales plan. Remember, these strategies are all designed to capture new customers and new market share. Important note: The strategies are numbered and the tactics are italicized.
1. Exceed my quota.
- Send no less than 50 letters of introduction to new prospects each week.
- Make no less than 50 cold calls of introduction to new prospects each week.
- Make no less than 20 face-to-face contacts with new prospects each week.
- Create no less than 10 proposals each week.
- Make no less than five presentations each week.
Important note: Your numbers will, of course, vary. What's important here is that you calculate exactly how many contacts you'll need to make in order to achieve your sales quota.
2. Increase awareness in the marketplace of my products, services and solutions.
- Join and participate in no less than three professional associations and organizations that my best prospects and customers belong to.
- Attend any and all trade shows and conventions that my best prospects and customers attend.
- Purchase the mailing list of these associations and organizations and send either a postcard or a letter of introduction.
- On a regular basis, contribute articles and white papers that address the interests and concerns of this population.
3. Increase awareness in the community of my products,
services and solutions.
- Attend all Chamber of Commerce networking events.
- Volunteer to speak at no less than 12 various organizations in my territory that have an interest in my product, service and solutions.
- Volunteer my time at three nonprofit organizations.
- Join and participate in no less than three networking groups, such as Le Tip or Business Networking International.
4. Obtain referrals from all my new customers.
- Within 30 days of delivering my product, service or solution, I will ask each of my new customers for at least three names and phone numbers of someone they personally know who may have a use for my products, services and solutions.
Existing Customer Business Strategies and Tactics
Include the following two strategies in your sales plan. Remember, these strategies are designed to capture high-margin, add-on business from your existing customers. Important note: Here again, the strategies are numbered and the tactics are italicized.
1. Create a touch-point program.
- Contact each of my existing customers no less than once per month with a new idea they cannot get from anyone else.
- Create a noteworthy monthly newsletter.
- Create a user-group within my existing customer base.
- Create some sort of web-based seminar series for my existing customers.
- Take at least three existing customers to lunch each month and invite a new prospect to join us.
2. Prospect within my existing customer base.
- Knock on no less than three new doors, departments and divisions within each of my existing customers' businesses.
- Ask each of my existing customer contacts to introduce me to one other person within their organization.
- Personally meet the top executive at each of my existing customers' businesses.
The Time Is Now
The final part of your sales plan must detail the timeline for implementation of each of the tactics in your sales plan. It's best to show a week-to-week schedule.
Once you've created your sales plan, don't file it away! Keep it handy and revisit it and revise it on a regular basis. Stay on track with your plan, and you'll stay on quota.
If you have a sales or marketing question that you'd like to ask me in person, you can call me toll-free during my live Internet radio talk show on Entrepreneur Radio. Visit www.wsRadio.com every Friday between 9 and 10 a.m. PDT.
Calculating Your Prospect Ratio
Step One: Targets
Monitor your own sales work for one month (or whatever period is appropriate in your industry) and answer these questions:
A. If you contacted 100 suspects (via phone calls, mailings,
in-person meetings or a combination of these), how many prospects
would result? _________
B. How many of the prospects you identified in A. would turn into hot leads? _________
C. How many of the hot leads you identified in B. would you turn into actual sales? _________
Step Two: Ratio
Divide the number on line C by 100. The result is your ratio. _________
Step Three: Goals
1. What is your yearly quota or sales goal, in dollars? _________
2. What are your projected sales totals, in dollars, from current customers? _________
3. Subtract item 2 from item 1 to yield the amount of new sales dollars needed this year. _________
4. Enter the dollar amount of your average sale. _________
5 Divide item 3 by item 5 to yield the number of new sales needed this year. _________
Step Four: Your Bottom Line
Divide the number in item 5 by the ratio you calculated in Step Two. _________
Bingo! You're a CPA! Well, maybe not, but this is the number of new suspects you'll need to contact in the coming year to reach your yearly target. Now divide that number by 52 (unless you plan on taking a week or two of vacation), and you'll know how many suspects you must contact each week to make your quota.
Note: Aim high! I always shoot for 125 percent of quota if I want to hit 110 percent.
Tony Parinello is the author of the bestselling book Selling to VITO, the Very Important Top Officer. For additional information on his speeches and his newest book, Secrets of VITO, call (800) 777-VITO or visit www.sellingtovito.com.
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.