Sales plan: forecast, goals, quotas and other elements of a plan

In this post we want to explain the bases of a good sales plan, its definition, objectives, elements and structure. And although it is clear that in order to carry out a complete sales action plan you will need a great dedication to the analysis of your company and market, this can be a good starting point to see the advantages of having a strategic vision in this field of action. in order to achieve more optimal results to achieve the objectives of your business.

What is a sales plan?

We could define a strategic sales plan as the document that sets out the set of strategies and tactics to be implemented by the sales force of a company in order to achieve its business objectives. In this sense, one of the key elements is the adequate estimation of the general sales forecastsbased on the market potential that can be achieved, as well as the economic, technical and human resources of the organization.

However, when defining a sales action plan, it is important to consider that there are different types depending on various factors, such as:

• Time: plan in the short, medium or long term.
• Data: subjective (opinions or intuitions), statistical (company data) or economic (market data).
• Goals: management (company operation), trend (medium-term results) or structural (major changes in the company’s structure for long-term objectives).
• Product: new or existing
• Amplitude: focused on a product, a product category or more categories.

Thus, we can find companies with a single comprehensive sales plan for all their products and services, or those that carry out specific plans for specific categories and types, sales plans for 5 years compared to others that seek to achieve objectives in a few weeks, and even plans based on extensive market studies, and others on the mere intuition of its sales director.

Objectives of a sales plan

The purpose of a strategic sales plan should always be to obtain the best possible results with the available resources. Starting from this, the objectives of a sales plan must be set based on the initial situation from which it starts, and for this, the analysis of the market, the product and the company’s sales force will be essential. In addition, these objectives will have to be measurable, quantifiable, specific, temporary and relevant.

Therefore, a sales promotion plan cannot have the mere objective of selling, it is necessary to specify a set of specific objectives. For example, a furniture sales company may have as objectives:

• Sell ​​30 sofas a month for the next year.
• Sell ​​20 kitchens per month during the first quarter of the year.
• Sell ​​30 kitchens per month during the second quarter of the year.
• Sell ​​40 kitchens per month during the third quarter of the year.
• Sell ​​1,000 dining rooms per year.
• Sell ​​100 children’s bedrooms monthly for the next year.
• Sell ​​150 double bedrooms per month for the next year.
• Get a minimum of 5 agreements with decorators and interior designers per month.

How to make a sales plan?

Before setting out to put our strategic sales plan on paper, it will be essential to carry out a prior analysis of the following items: product, company, company sales force, market, competition and public.

Then, we must be clear about what are the elements of a sales plan and the importance that each of them has to achieve a solid and integrated result.

First of all, the sales forecast, that is, how much we are going to sell is essential to be able to adequately assess the rest of the aspects of the plan. Overestimating our capacity can lead us to a great failure in sales, but underestimating it will mean the inefficient use of resources, which is why it is key to know how to properly assess this element of the sales action plan. To make a good calculation, what we are interested in knowing is the number of consumers, their needs, their purchasing power and the desire they really have to buy. This comes to be the market potential.
But neither can we forget to assess other factors such as the availability of the product in the market, or what is the same, what the competition offers in quantity, quality, price,… that is, the sales of the sector. To forecast sales, we can use various methods, such as interpolation and extrapolation, through which, by analyzing figures from previous periods, we deduce the law that regulates them (a series of factors that have determined those sales), and applying that law to future periods, by extrapolation, we deduct the sales that we are going to achieve.

Second, it’s important to distinguish these three elements of a sales action plan that are often confused as the same thing:

• Forecast: Estimation of the probable evolution of demand based on certain hypotheses.
• Goals: Encrypted and dated specific purpose that a company intends to achieve.
• Share: It is a fraction of objectives entrusted to a fraction of the company to achieve them.

We have already spoken about the forecast and the objectives, but regarding the quota it is important to consider that its objectives are:

Now that we are clear about the main elements, it will be essential to think about the best way to organize the structure of a sales plan. To do this, we show you a possible example:

• Market delimitation: The aim is to provide in the report the main parameters that give us the current general panorama of the market. In this section you can make a summary of the global commercial situation in terms of sales, achievement of objectives and base data that define each area (such as the most important towns and their number of inhabitants). What is essential is a balance between the number of data and its usefulness: only the significant ones should be figured out to really assess the overall situation.
• Market share by seller / Achievement of objectives (quotas) by seller: In a comparative table, he presents the quota of each vendor and his degree (%) of compliance.
• State of commercial situation by seller: It offers a simultaneous vision of the monthly commercial work on customer sales carried out by the sellers. Regarding the client, the current number is given, as well as those won in the control period and those lost. The degree of penetration in the clientele is also represented.
• Product analysis: Review the sales figures for each of the products or ranges and their percentage contribution to the overall company. It is an essential piece of information for an in-depth cost analysis. The trend of the products is also analyzed. The relevant items are: product (or range), sales for the month, accumulated sales for the year, share of the product mix in % (resulting from dividing the accumulated sales-year of each product by the total accumulated sales-year and multiplied by one hundred), accumulated sales of the previous year / accumulated sales of the current year.
• Customer analysis: It seeks a segmentation by volume of purchases, of each client, globally for the entire company and also by areas. The items for each client are: sales for the month, accumulated sales, the percentage of total monthly sales and accumulated annual sales.
• Work control of sellers: It collects the visits and other activities of the sellers in the month, although for greater effectiveness it is usually done with a weekly closing.
• Sellers evaluation: Taking into account criteria such as sales volume, compliance with sales quotas, expense/sale ratio, gross margin contributed, market share, new customers, defaulters, new items, visits to prospects and rates of transformation of prospects into cash.
• Commercial management control: Taking into account management ratios such as average value of the order, average orders per day: Number of orders / days worked, average sales per day, orders per customer, average sales per customer, customer expansion, customer regression, order book, defaulters and commercial efficiency .

Obviously, each company has its own way of looking at sales, and nowadays it is increasingly common to centralize the sales force in an e-commerce, for which we will need to considerably modify the previous scheme with a more conventional sales plan structure. . However, whatever the nature of your business, it will also be very important that this strategic sales plan is integrated with your business’s marketing plan so that all efforts follow the same direction and focus on common objectives.