What High-Attaining Sales Executives Do This Time of Year
Sales executives who routinely attain or out-perform their goals – especially those in recurring Revenue businesses – take steps in Q4 of the previous year or early in Q1 of the new year, to maximize their chances of getting a strong start to the year.
These steps are in addition to generating enough motivational energy to light up a team twice the size of what they actually have, and being sure to augment firmness with sympathetic humor and the comradery of group challenge.
Review the Previous Year and Learn
Use the data and experience from the previous year to see how to improve and to better predict what might happen in the new one. This includes:
Deals won versus deals lost. Why did we win what we won? Can we leverage that, can we improve on it? Why did we lose what we lost? If we lost none on price, we were probably priced too low. If we lost all on price, we were either priced too high, or we need to improve on our ability to express value in ways the prospects and clients can feel.
Batting average. What was our close percentage, as a team and individually? Do we need more “at bats” or a higher “batting average,” or both?
Numerical performance. How did the Sales (and Marketing if reporting to the Sales executive) team and individuals perform against the team’s budget, and the individual plans and quotas? Did we make our budget but most individuals not make their goals? Then we’re probably setting goals too high, possibly because we have low confidence in the team’s ability to attain our budget. Did most people make their goals but we didn’t hit budget? Then we’re budgeting too high or making individual goals too easy. (Note: Marketing should have numerical goals and accountability, just as does Sales.)
Review Key Performance Indicators (KPIs). Review the KPIs you used in the previous year, from two points of view. First, performance: How did the team and individuals do against the KPI goals? Second, utility: Do we have the right KPIs, and were they set correctly? If not, adjust the goals or choose different KPIs.
Sales funnel review. This is the most important thing to do. Discipline around the Sales funnel is critical all year, but especially so as you go into the new year is critical: Are all the deals real, are they set to realistic values and likelihoods, is there fluff? On the other hand, are some Sales people being too conservative, and only putting in what they know will close? The funnel must reflect the actual inventory of Sales opportunities – their size, content and timing – the company has in hand, from 10% to 90%, in order to successfully win and fulfill its fair share of business. Selling and delivering – especially Services but also product – is a team sport and the funnel is a key tool in ensuring good communication and coordination not just within the Sales group but the entire team across the company – Services, Finance, Operations and leadership.
In addition, how did we do as a Sales team and individually in optimizing not only our own efficiency and effectiveness but setting the broader team up for success:
What proportion of our Sales were accurately forecasted versus “surprises” that were not in the funnel? How can we improve this ratio so we have more Sales but fewer surprises?
What was our average Sales cycle time, by Line of Business? How can we improve this?
What proportion of our new accounts:
Had a paid assessment as part of the Sales cycle, and if not 100%, why not?
Were within our Target Customer Profile, and if not 100%, why not?
Bought our full range of offerings, and if not 100%, why not?
We brought rapidly onto our standards, and if not 100% why not?
What proportion of our existing accounts:
Had four (not 3, 2, 1 or 0) Quarterly Business Reviews in the past year, and if not 100%, why not?
Bought all of our new offerings, and if not 100%, why not?
Got a price increase, and if not 100%, why not?
For each of these “why nots”, put a plan in place to get to 100% in the new year. Your Sales attainment – and your broader team’s delivery performance – will improve, as will your esprit de corps. There’s nothing like winning, and helping your comrades win, to generate confidence and spirit.
Planning for the New Year
No doubt there is an existing run-rate of business for the new year:
Deals already in the funnel, plus
Contracts in place.
Together, these might total 20% of the year’s Revenue goal, or 80%. If the former, then the Marketing and Sales plans for the new year must be robust. If the latter, then the year’s Revenue goal is probably too low, and for that reason the Marketing and Sales plans for the year must also be robust.
Thankfully, for the Sales executive, plans for the new year are simple and concrete in nature:
We need “X” business from existing accounts, which means they need to buy “Y” deals of “Z” average size. What’s the plan to get these?
We need “A” business from new accounts, which means they need to buy “B” deals of “C” average size. What’s the plan to get these?
The sum of this activity of course meets or exceeds the budgeted Revenue goal.
In addition, these plans, and the activities that lead to their successful attainment, make up the KPIs which underpin the Sales compensation plans – both base and incentives – for each person and for the team as a whole. This extends all the way up through Sales management to the senior-most position in the company, the CEO. A major part of their incentive compensation should be based on attaining the bottom-line profit dollars, and profit percent, that the Revenue goals deliver. This creates alignment up and down the ranks, which further helps assure attainment and enables proper management and motivation.
The high-performing Solution Providers across all 10 Predominant Business Models™, most commonly use a Sales model which has separate Hunter and Farmer1 roles; each person on the team is one or the other. None are both; in other words, they tend not to have individuals in hybrid hunter/farmer roles, who can say, “I win a new account and then keep it.” There are a half-dozen reasons why this model produces the best results, but in this article we’ll simply focus on planning with Hunters and Farmers, for the new year.
Both Hunters and Farmers should individually present their plan for the new year, as a “business plan” to the group, that is, to their peers and Sales management:
How many opportunities do they need to close, by offering, to attain their goals?
What percent of opportunities do they intend to close? Twenty-five percent? Forty percent? Seventy percent? How does this compare to last year, and why do they think they can attain or improve it?
What is their average deal size by offering? How does this compare to last year, and why do they think they can attain or improve it?
Therefore, how many proposals for paid assessments and for ultimate deals, by offering, will be required in the new year? How well does this tie out to the first bullet point? If not, what must be done (by offering) to get them to tie out?
How many prospects will be required, in order to deliver that number of proposals?
Where will those prospects come from?
Self-generated: referrals, networking, lead groups, and etc.
Marketing-generated: in-bound, campaigns, tele-marketing and business development, lunch-and-learns, and etc.
Executive-generated: networking and thought leadership activities
Of course, the Sales executive has helped each Sales person develop and refine their plans, so that what each presents is “double A”: Aggressive but Attainable, as well as complete and well thought-out and -presented.
At the same time, the Sales executive has aligned each plan with the individual’s Sales compensation plan, explained their compensation plan to each individual, and gotten their agreement that it, too, is aggressive but attainable, and a win for both the company and the Sales person. The additional goal is that the Sales person can then explain it to their spousal equivalent. As with all roles in the company, high performance involves family support, and so the spousal equivalent must be able to understand the compensation plan as well.
None of this is done in a vacuum; the Sales executive’s success – and that of the company as a whole – is tied inextricably to the performance of the other executives in the company: Services, Finance, Operations and to the CEO’s:
Sales neither dictates the content or pricing of offerings, nor simply submits to decisions of others on these critical factors. They are developed together as a team, with mutual buy-off on the outcomes.
Likewise, Sales neither dictates nor simply submits to the Revenue and margin by Line of Business set in the budget. These too are developed collaboratively, with the CEO maintaining alignment with the shareholders goals for the new year and within the long-term Value Creation Strategy.
As each Sales person did with their Sales peers and leader, now the Sales executive must present their plan for the Sales year to their peers and leader, and get buy-in or adjust the plan accordingly. No doubt they have worked with the CEO in advance to make sure this goes smoothly and successfully.
The compensation plans for the executives should be aligned such that when one wins, the others win, and so that when they win, the company wins.
These are the methods by which top-performing Sales executives attain good-to-great results, year after year. Ultimately, with such performance, Sales executives can usually earn more than their non-Sales peers, and in some cases more than the CEO.
Often, they become candidates for inclusion in the CEO succession plan, if they so choose. This is because they not only attain results, but have done so by forming positive and influential relationships with their senior management peers. To be spontaneously nominated by one’s peers to become the leader of the group, is the highest form of attainment, after consistently meeting or beating budgeted goals.
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1 If the firm is a small-business-focused Managed Services Provider, then 100% of the farming can and should be done by Virtual CIOs, who report to Service but are managed and compensated much like Sales farmers.