Don’t Let Last Quarter's Sales Results Become an Excuse: Three Steps to Prepare for The Next Quarter
If your last quarter's results did not meet your goals, Owners and Sales Leaders might be reluctant or have even become paralyzed when it comes to developing their sales budgets for the next quarter or two. It is a completely understandable reaction, but the important thing is to not let the uncertainty of the previous few quarters become an excuse or crutch for not creating your sales budget for the next few quarters with anything but a strong, attainable plan.
The key to successful planning lies in tapping into all the bumps in the road that you encountered the previous few quarters and working backwards. There is no doubt that you can learn a lot by looking at your previous two quarters – about your businesses, about market behaviors, how to crisis plan, and about how to refocus sales efforts. All of that information needs to be strategically used to develop your sales budgeting and road map for the next few quarters.
All underperforming teams will likely want to be in a different place in six months. But the question is: How do you get there? We are sharing three steps to help you isolate the pieces to this equation and how they need to play into forming your sales forecast for the next few quarters.
STEP 1: Take inventory of your strengths. Before you begin generating your sales budget, ask yourself what you know, and what you don’t know (even that is important to account for!) Ask yourself:
Do you have a high degree of predictability and comfort-level with how you are going to finish top-line revenue in 6-12 months?
Are your current forecasts performing within 20% of projected numbers?
Do you have a forecast methodology that you trust?
If you answered “yes” to the above, make sure the sales plan for the next six months is mapped out and proceed to Step 2. Congratulations on having clarity into your current situation because that is your starting point for 2021 planning!
If you answered “no”, STOP and request a consultation call! If you do not have confidence with where your current plan will finish or a clear path to achieve its goals, you cannot have confidence in building a reliable plan for the next 12 months.
Don’t worry if you answered no - you’re not alone. About 89% of owners and sales leaders struggle with setting effective sales goals and quotas under normal circumstances.
STEP 2: Identify the considerations that need to be layered onto revenue trending that revealed itself in the previous two quarters. It is important to really understand and pinpoint all of the changing market aspects that will continue playing into your sales results in the next 3-6 months to come up with an attainable sales budget.
You’ll want to designate your accounts or markets into three categories for the next 6-12 months based on any shifts you saw in the market during the previous 6 months and map them out accordingly.
RETAIN – Accounts or markets that have organic demand and buying habits that are trending as "normal."
TRANSFORM – These are accounts or markets that experienced demand vanish in the last 3-6 months. Under this category, you will need to completely shift to serving all new markets in the next 6 months.
HYBRID – This is a combination of Retain and Transform – accounts or market in this group have contracted but are still active. However, to make up what is dissolved during the last 6 months, you will need to subsidize with new markets in the next 3-6 months.
For your “Retain” or “Hybrid” accounts or markets, Owners and Sales Leaders must ask themselves if they can expect buyers behavior to mirror what they saw during growth periods or will it be more like what they are seeing as business is trending flat or down? Whichever the case, you’ll want to apply the proper revenue pattern to your sales budget for the next 6 monhts.
Other things to consider in your projections are new product and service offerings. What new expenses or resources will be needed to make this new offering a success? Owners must also pay attention to macroeconomic trends that have the potential to heavily impact select industries or even dissolve them over time.
If you are unsure how to develop a layered model that accounts for these variables,
STEP 3: Set the sales team loose to go after a quota they believe can be achieved. Now that you have established your sales budget for the next 3-6 months, it’s time to formulate quotas to achieve the number. The objective is to gear up your sales team to climb the next rock going into the next 6 months. Ask yourself…
Are you certain you have the right balance in your comp plan to incentivize your sales team while also allowing for appropriate company profitability?
Have you traditionally been good at setting Quotas that have been consistently attained? If not, you will frustrate your salespeople with overly aggressive growth goals without having clarity on how attainable they are. Sales turn-over is not a risk you want to take as you rebuild your revenue path.
The real prize will be successfully positioning yourself differently for the next 12 months. The next 12 months will be the time when record-breaking sales will be realistic, and a time when prepared companies can leap-frog their competition!
If you are looking to gauge your sales readiness for capturing new opportunities, invest 5-minutes by taking my Sales Assessment to gain helpful insights.
ABOUT THE AUTHOR An elite group of licensed Sales Xceleration Advisors have pooled their knowledge and expertise to generate insights, tips, and tools to help business owners exponentially grow their revenue. We are established B2B Sales Leaders who have helped a range of businesses from start-ups to Fortune 500 companies get their business on track.
Daniel Steyn, helps small and mid-sized businesses break through growth barriers by incorporating a proven sales organization framework.