No, I’m not crazy or obsessive. This is really the time you should start preparing for next year. September is just around the corner, and September is when you should start planning for the following year. It’s time for you to get your sales team aligned and working on their forecast for 2018.
I know many of you out don’t do this, but you should. I have worked with countless companies whose salespeople have not even made a forecast; worse yet, often the company has not made one. Or the upper management has developed a forecast but not shared it with the rest of the organization, including the salespeople. Think about that. Isn’t that senseless? It’s as senseless as playing a baseball game without using a scoreboard. It’s as senseless as hoping to get somewhere but not knowing where you’re supposed to go.
You need a forecast to plan where you are going to be in 2018. You not only need it for your sales effort, but you also need it so that the rest of the organization can plan their resources for the following year as well.
Whether you are a VP of sales, a director of sales, or a sales manager, here is what you and your sales force must do to prepare for next year.
Account plans: everything begins with account plans:
1. Create account plans for your top customers. Following the 80/20 rule, develop an account plan for each of your top accounts. These account plans will include information such as:
a. What is the customer’s technology?
b. How much of your type of business do they buy a year?
c. How much of that business do you currently get?
d. What do you have to do get more of their business?
2. You don’t have to create account plans for all your accounts, just the top ones and the ones with the greatest potential. You should also include any what I call “investment accounts,” which are start-ups with great promise. I like to keep it at no more than 10 accounts per salesperson. But don’t forget the house accounts as well. There are many reasons for producing these account plans:
a. It makes the salesperson re-evaluate that account and update it based on what has happened in the past year.
b. It educates the rest of the team on how that account is doing if it’s a legacy account and introduces them to the account if it’s a new one.
c. And finally, it gets everyone’s sign-in to either work with that account or not. This is especially helpful for new accounts. The old saying goes that you sell a customer twice and the second time is when you sell your own company on taking on that account. This is what you are doing now. One time, so that everyone on the team agrees that this will be a target account they are willing to work with.
3. The account plan will also contain the month-by-month forecast for each account. This is key, because from this account forecast, the salesperson will derive her complete annual forecast.
The forecast is the key to success. Heck, it’s the key to everything.
If you are serious about running a successful business, you must have a forecast. You must know how much business you are going to win next year. Operations needs to know not only what customers they are going to be dealing with, but also what technology they are going to have to be prepared to produce, what equipment they are going to need, and how many people they are going to need to build the products to meet that sales forecast.
To develop a successful forecast, you should do four things:
1. Know what you did this year per customer.
2. Know if each customer is on an upward trend, downward trend or staying the same.
3. You should know timing of when the orders will be placed. This is critical.
4. And consolidate all your smaller accounts—the ones that do not have account plans—into a category called miscellaneous, which can be forecasted as a single entity.
Once you know these facts you will be able to develop an accurate forecast. A forecast that will serve you well to manage your business in the following twelve months.
The sales manager should work with each salesperson, helping him to develop his own territory forecast. Then, the sales manager must consolidate everyone’s forecast into the company’s complete annual forecast, which he then turns over to the rest of the management team to make sure they have everything they need to do their planning.
Each company is different, so the way you develop your account plans and forecast might vary a little bit. But if you follow these basic guidelines you will have a great set of account plans, an accurate forecast and a team with common goals on how to make 2018 a success.
It’s only common sense.