Sales Management Planing,Implementatiom

8/3/2019 Sales Management Planing,Implementatiom

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Sales management

It is a systematic process involving:

1. Formulation of sales strategy through development of account management

policy, sales force compensation policies, sales revenue forecasts, and sales plan.2. Implementation of sales strategy through selecting, training, motivating, and

supporting the sales force, setting sales revenue targets.

3. Sales force management through development and implementation of sales

performance, monitoring, and evaluation methods, and analysis of associated

behavioral patterns and costs.

How to write strategic marketing plans, business plans and sales plans

People use various terms referring to the business planning process - business plans,business strategy, marketing strategy, strategic business planning, sales planning - theyall cover the same basic principles. When faced with business planning or strategydevelopment task it's important to clarify exactly what is required: clarify what needs tobe done rather than assume the aim from the description given to it - terms are confusedand mean different things to different people. You will see from the definitions belowhow flexible these business-planning terms are.

Sales plan definitions

A plan - a statement of intent - a calculated intention to organize effort and resource toachieve an outcome - in this context a plan is in written form, comprising explanation,

justification and relevant numerical and financial statistical data. In a business context, aplan's numerical data - costs and revenues - are normally scheduled over at least onetrading year, broken down weekly, monthly quarterly and cumulatively.

Strategy - originally a military term, in a business planning context strategy/strategicmeans/pertains to why and how the plan will work, in relation to all factors of influenceupon the business entity and activity, particularly including competitors (thus the use of amilitary combative term), customers and demographics, technology and communications.

Sales - the transactions between the business and its customers whereby services and/orproducts are provided in return for payment. Sales (sales department/sales team) alsodescribe the activities and resources that enable this process, and sales describe the

revenues that the business derives from the sales activities.

Sales plan - a plan describing, quantifying and phased over time, how the sales will bemade and to whom. Some organizations interpret this to be the same as a business plan ora marketing plan.


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When writing a sales remember...

The most important driver for almost any business plan (whether it's called a businessplan, a sales plan, an operational plan, an organizational plan, marketing plan, marketingstrategy, strategic business plan, or other department business plan) is return oninvestment, or for public services and non-profit organizations, is effective use of

investment and resources.

It's crucial also to consider and incorporate corporate social responsibility, ethics, thegreater good, etc, but for the vast majority of organizations, whether companies, publicservices, not-for-profit trusts and charities, all organizations need to be financiallyeffective in what they do, otherwise they will cease to function.

Organizations need of course to be ethical and humane, and to have a soundphilosophical foundation, but ultimately, to sustain any organized activity, the figuresandfinances have to add up.

It is essential to manage ethical and socially responsible aspects as part of the total mix of

organizational aims, which necessarily must include the effective use of investment andresources, in whatever way the principle is applied for the particular organization.

The essential planning elements are identifying causes and effects, according to yourrelevant business drivers. In many good businesses, a substantial business planningresponsibility extends now to front line customer-facing staff, and the trend is increasing.In this context, the business plan could be called also be called a marketing plan, or asales plan - it is all the same:

"What you are going to sell to whom, when and how you are going to sell it, how muchcontribution (gross profit) the sales will produce, what the marketing and/or selling costwill be, and what will be the return on investment."

Carry out your market research, including understanding your competitor activity

Your market research should focus on the information you need, to help you to formulatestrategy and make business decisions. Market research should be pragmatic andpurposeful - a means to an end, and not a means in itself. Market information potentiallycovers a vast range of data, from global macro-trends and statistics, to very specific anddetailed local or technical information, so it is important to decide what is actuallyrelevant and necessary to know. Market information about market and industry trends,values, main corporations, market structure, etc, is important to know for largecorporations operating on a national or international basis. This type of research is

sometimes called 'secondary', because it is already available, having been researched andpublished previously. This sort of information is available from the internet, libraries,research companies, trade and national press and publications, professional associationsand institutes. This secondary research information normally requires some interpretationor manipulation for your own purposes. Far more useful would be to carry out your own'primary' research (i.e. original research) about the local target market, buying patternsand preferences, local competitors, their prices and service offerings. A lot of usefulprimary market research can be performed using customer feedback, surveys,


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questionnaires and focus groups (obtaining indicators and views through discussionamong a few representative people in a controlled discussion situation). This sort ofprimary research should be tailored exactly for your needs. Primary research requires lessmanipulation than secondary research, but all types of research need a certain amount ofanalysis. Be careful when extrapolating or projecting figures to avoid magnifying initial

mistakes or wrong assumptions. If the starting point is inaccurate the resulting analysiswill not be reliable. For businesses of any size; small, local, global and everything inbetween, the main elements you need to understand and quantify are:

Customer (and potential customer) numbers, profile and mix.

Customer perceptions, needs, preferences, buying patterns, and trends, by sub-sector if necessary.

Products and services, mix, values and trends

Demographic issues and trends (especially if dependent on consumer markets).

Future regulatory and legal effects

Prices and values, and customer perceptions in these areas

Distribution and routes to market

Competitor activities, strengths, weaknesses, products, services, prices, salesmethods, etc

Primary research is recommended for local and niche services. Keep the subjects simpleand the range narrow. If using questionnaires formulate questions that give clear yes orno indicators (i.e. avoid three and five options in multi-choices, which produce manyuncertain answers) always understand how you will analyse and measure the data

produced. Try to convert data to numerical format and manipulate on a spreadsheet. Usefocus groups for more detailed work. For large research projects consider using a marketresearch organization because they will probably do it better than you will, even thoughthis is likely to be more costly. If you use any sort of marketing agency ensure you issuea clear brief, and that your aims are clearly understood. Useful frameworks for researchare PEST analysis and SWOT analysis.

Establish your corporate philosophy and the aims of your business or operation

First establish or confirm the aims of the business, and if you are concerned with a part ofa business, establish and validate the aims of your part of the business. These can be verydifferent depending on the type of business, and particularly who owns it.

Refer to and consider issues ofethics and philosophy, corporate social responsibility,sustainability, etc - these are the foundations on which values and missions are built.

Look at the reasons why ethics and corporate responsibility are so important. And seealso the fundamental organizational planning stages.

When you have established or confirmed your philosophical and ethical position, statethe objectives of the business unit you are planning to develop - your short, medium and
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long term aims - (typically 'short, medium and long' equate to 1 year, 2-3 years and 3years plus). In other words, what is the business aiming to do over the next one, three andfive years?

Bear in mind that you must reliably ensure the success and viability of the business in theshort term or the long term is merely an academic issue. Grand visions need solid

foundations. All objectives and aims must be prioritized and as far as possible quantified.If you cannot measure it, you cannot manage it.

Define your 'mission statement'

All businesses need a mission statement'. It announces clearly and succinctly to yourstaff, shareholders and customers what you are in business to do. Your mission statementmay build upon a general service charter' relevant to your industry. You can involvestaff in defining and refining the business's mission statement, which helps develop asense of ownership and responsibility. Producing and announcing the mission statementis also an excellent process for focusing attention on the business's priorities, and

particularly the emphasis on customer service. Whole businesses need a missionstatement - departments and smaller business units within a bigger business need themtoo.

Define your 'product offering(s)' or 'service offering(s)' - your sales proposition(s)

You must understand and define clearly what you are providing to your customers. Thisdescription should normally go beyond your products or services, and critically mustinclude the way you do business, and what business benefits your customers derive fromyour products and services, and from doing business with you. Develop offerings orpropositions for each main area of your business activity - sometimes referred to as'revenue streams', or 'business streams' - and/or for the sector(s) that you serve. Under

normal circumstances competitive advantage is increased the more you can offer thingsthat your competitors cannot. Good research will tell you where the opportunities are toincrease your competitive advantage in areas that are of prime interest to your targetmarkets. Develop your service offering to emphasize your strengths, which shouldnormally relate to your business objectives, in turn being influenced by corporate aimsand market research. The important process in developing a proposition is translatingyour view of these services into an offer that means something to your customer. Thedefinition of your service offer must make sense to your customer in terms that areadvantageous and beneficial to the customer, not what is technically good, orscientifically sound to you. Think about what your service, and the manner by which youdeliver it, means to your customer.

The important thing is to understand your services and proposition in terms that

your customer will recognize as being relevant and beneficial to them.

Most businesses have a very poor understanding of what their customers value most inthe relationship, so ensure you discover this in the research stage, and reflect it in yourstated product or service proposition(s).

Customers invariably value these benefits higher than all others:


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Making money

Saving money

Saving time

If your proposition(s) cannot be seen as leading to any of the above then customers willnot be very interested in you.

A service-offer or proposition should be an encapsulation of what you do best, that youdo better than your competitors (or that they don't do at all); something that fits with yourbusiness objectives, stated in terms that will make your customers think Yes, that meanssomething to me and I think it could be good for my business (and therefore good for mealso as a buyer or sponsor).'

This is the first 'brick in the wall' in the process of business planning, sales planning,marketing planning, and thereafter, direct marketing, and particularly sales leadgeneration.

Write your business plan - include sales, costs of sales, gross margins, and if

necessary your business overheads

Business plans come in all shapes and sizes. Pragmatism is essential. Ensure your planshows that your business needs it to show. Essentially your plan is a spreadsheet ofnumbers with supporting narrative, explaining how the numbers are to be achieved. Aplan should show all the activities and resources in terms of revenues and costs, whichtogether hopefully produce a profit at the end of the trading year. The level of detail andcomplexity depends on the size and part of the business that the plan concerns. Yourbusiness plan, which deals with all aspects of the resource and management of thebusiness (or your part of the business), will include many decisions and factors fed in

from the marketing process. It will state sales and profitability targets by activity. In amarketing plan there may also be references to image and reputation, and to publicrelations. All of these issues require thought and planning if they are to result inimprovement, and particularly increasing numbers of customers and revenue growth. Youwould normally describe and provide financial justification for the means of achievingthese things, together with customer satisfaction improvement. Above all a plan needs tobe based on actions - cost-effective and profitable cause and effect; inputs required toachieve required outputs, analysed, identified and quantified separately wherevernecessary to be able to manage and measure the relevant activities and resources.

Quantify the business you seek from each of your market sectors, segments,

products and customer groupings, and allocate investment, resources andactivities accordingly

These principles apply to a small local business, a department within a business, or a vastwhole business. Before attending to the detail of how to achieve your marketing aims youneed to quantify clearly what they are. What growth targets does the business have? Whatcustomer losses are you projecting? How many new customers do you need, by size andtype, by product and service? What sales volumes, revenues and contributions values do


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you need for each business or revenue stream from each sector? What is your productmix, in terms of customer type, size, sector, volumes, values, contribution, anddistribution channel or route to market? What are your projected selling costs and netcontributions per service, product, sector? What trends and percentage increase inrevenues and contributions, and volumes compared to last year are you projecting? How

is your market share per business stream and sector changing, and how does this comparewith your overall business aims? What are your fast-growth high-margin opportunities,and what are your mature and low-margin services; how are you treating these differentopportunities and anything else in between? You should use a basic spreadsheet tool tosplit your business according to the main activities and profit levers. See the simplesales/business planning tool example below.

Ansoff product-market growth matrix - strategic tool

A useful planning tool in respect of markets and products is the matrix developed by IgorAnsoff (H Igor Ansoff, 1918-2002), who is regarded by some as the 'Father of StrategicManagement'.

Fully titled the Ansoff Product-Market Growth Matrix, the tool was first published inHarvard Business Review, 1957, in Ansoff's paper Strategies for Diversification.

The Ansoff product-market matrix helps to understand and assess marketing or businessdevelopment strategy. Any business, or part of a business can choose which strategy toemploy, or which mix of strategic options to use.

This is a fundamentally simple and effective way of looking at strategic developmentoptions.

existing products new products

existing

marketsmarket penetration product development

new markets market development diversification

Here are the Ansoff strategies in summary:

Market penetration - Developing your sales of existing products to your existingmarket(s). This is fine if there is plenty of market shares to be had at the expense of yourcompetitors, or if the market is growing fast and large enough for the growth you need. Ifyou already have large market share you need to consider whether investing for further

growth in this area would produce diminishing returns from your development activity. Itcould be that you will increase the profit from this activity more by reducing costs thanby actively seeking more market share. Strong market share suggests there are likely tobe better returns from extending the range of products/services that you can offer to themarket, as in the next option.

Product development - Developing or finding new products to take to your existingmarket(s). This is an attractive strategy if you have strong market share in a particular


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market. Such a strategy can be a suitable reason for acquiring another company orproduct/service capability provided it is relevant to your market and your distributionroute. Developing new products does not mean that you have to do this yourself (which isnormally very expensive and frequently results in simply re-inventing someone else'swheel) - often there are potential manufacturing partners out there who are looking for

their own distribution partner with the sort of market presence that you already have.However if you already have good market share across a wide range of products for yourmarket, this option may be one that produces diminishing returns on your growthinvestment and activities, and instead you may do better to seek to develop new markets,as in the next strategic option.

Market development - Developing new markets for your existing products. Newmarkets can also mean new sub-sectors within your market - it helps to stay reasonablyclose to the markets you know and which know you. Moving into completely differentmarkets, even if the product/service fit looks good, holds risks because this will beunknown territory for you, and almost certainly will involve working through newdistribution channels, routes or partners. If you have good market share and good

product/service range then moving into associated markets or a segment is likely to be anattractive strategy.

Diversification - taking new products into new markets. This is high risk - not only doyou not know the products, but neither do you know the new market(s), and again thisstrategic option is likely to entail working through new distribution channels and routesto market. This sort of activity should generally be regarded as additional andsupplementary to the core business activity, and should be rolled out carefully throughrigorous testing and piloting.

Consider also your existing products and services themselves in terms of their marketdevelopment opportunity and profit potential. Some will offer very high margins becausethey are relatively new, or specialized in some way, perhaps because of specialdistribution arrangements. Other products and services may be more mature, with little orno competitive advantage, in which case they will produce lower margins. The BostonMatrix is a useful way to understand and assess your different existing product andservice opportunities:

Boston matrix

The Boston matrix model is a tool for assessing existing and development products interms of their market potential, and thereby implying strategic action for products andservices in each category.

low market share high market share

growing market problem child (rising) star

mature market dog cash cow


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Cash cow - The rather crude metaphor is based on the idea of 'milking' the returns fromprevious investments which established good distribution and market share for theproduct. Products in this quadrant need maintenance and protection activity, togetherwith good cost management, not growth effort, because there is little or no additionalgrowth available.

Dog - This is any product or service of yours, which has low market presence in a matureor stagnant market. There is no point in developing products or services in this quadrant.Many organizations discontinue products/services that they consider fall into thiscategory, in which case consider potential impact on overhead cost recovery. Businessesthat have been starved or denied development find themselves with a high or entireproportion of their products or services in this quadrant, which is obviously not veryfunny at all, except to the competitors.

Problem child - These are products, which have a big and growing market potential, butexisting low market share, normally because they are new products or the application hasnot been spotted and acted upon yet. New business development and project management

principles are required here to ensure that these products' potential can be realized anddisasters avoided. This is likely to be an area of business that is quite competitive, wherethe pioneers take the risks in the hope of securing good early distribution arrangements,image, reputation and market share. Gross profit margins are likely to be high, butoverheads, in the form of costs of research, development, advertising, market education,and low economies of scale, are normally high, and can cause initial businessdevelopment in this area to be loss-making until the product moves into the rising starcategory, which is by no means assured - many problem children products remain assuch.

Rising star - Or 'star' products, are those, which have good market share in a strong andgrowing market. As a product moves into this category it is commonly known as a 'risingstar'. When a market is strong and still growing, competition is not yet fully established.Demand is strong; saturation or over-supply do not exists, and so pricing is relativelyunhindered. This all means that these products produce very good returns andprofitability. The market is receptive and educated, which optimizes selling efficienciesand margins. Production and manufacturing overheads are established and costsminimized due to high volumes and good economies of scale. These are great productsand worthy of continuing investment provided good growth potential continue to exist.When it does not these products are likely to move down to cash cow status, and thecompany needs to have the next rising stars developing from its problem children.

After considering your business in terms of the Ansoff matrix and Boston matrix (which

are thinking aids as much as anything else, not a magic solution in themselves), on amore detailed level, and for many businesses just as significant as the Ansoff-type-options, what is the significance of your major accounts - do they offer better opportunityfor growth and development than your ordinary business? Do you have a high quality;specialized offering that delivers better business benefit on a large scale as opposed tosmall scale? Are your selling costs and investment similar for large and small contracts?If so you might do better concentrating on developing large major accounts business,
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rather than taking a sophisticated product or service solution to smaller companies whichdo not appreciate or require it, and cost you just as much to sell to as a large organization.

Customer matrix

This customer matrix model is used by many companies to understand and determine

strategies according to customer types.

good products not so good products

good customers

develop and find more customerslike these - allocate your bestresources to these existingcustomers and to prospectivecustomers matching this profile

educate and convert thesecustomers to good products ifbeneficial to them, failing which,maintain customers via accountmanagement

not so goodcustomers

invest cautiously to develop and

improve relationship, failingwhich, maintain customers viaaccount management

assess feasibility of moving these

customers left or up, failing which,withdraw from supplyingsensitively

Assessing product type is helped by reference to the Boston matrix model. There is a lotof flexibility as to what constitutes 'good' and 'not so good customers' - use your owncriteria. A good way to do this is to devise your own grading system using criteria thatmean something to your own situation. Typical criteria are: size, location, relationship,credit-rating and payment terms, is the customer growing (or not), the security of thesupply contract, the service and support overhead required, etc. This kind of customerprofiling tool and exercise is often overlooked, but it is a critical aspect of marketing and

sales development, and of optimizing sales effectiveness and business developmentperformance and profitability. Each quadrant requires a different sales approach. Thetype of customer also implies the type of sales person who should be responsible formanaging the relationship. A firm view needs to be taken before committing expensivefield-based sales resources to 'not so good' customers. Focus prospect development(identifying and contacting new prospective customers) on the profile which appears inthe top left quadrant. Identify prospective new customers who fit this profile, and allocateyour business development resources (people and advertising) to this audience.

Consider also what are your competitor weaknesses in terms of sectors, geographicalterritory and products or services, and how might these factors affect your options? Usethe SWOT analysis also for assessing each competitor as well as your own organization

or department.

Many organizations issue a marketing budget from the top down (a budget issued by theCentre/HQ/Finance Director), so to speak, in which case, what is your marketing budgetand how can you use it to produce the best return on investment, and to help the companybest to meet its overall business aims? Use the models described here to assess your bestlikely returns on marketing investment.
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The best way to begin to model and plan your marketing is to have a record of your

historical (say last year's) sales results (including selling and advertising costs if

appropriate and available) on a spreadsheet. The level of detail is up to you; modernspreadsheets can organize massive amounts of data and make very complex analysisquick easy. Data is vital and will enable you to do most of the analysis you need for

marketing planning. In simple terms you can use last year's results as a basis for planningand modeling the next year's sales, and the marketing expenditure and activities requiredto achieve them.

Simple business plan or sales plan tools examples

These templates examples help the planning process. Split and analyse your business orsales according to your main products/services (or revenue streams) according to theprofit drivers or 'levers' (variables that you can change which affect profit), eg., quantityor volume, average sales value or price, % gross margin or profit. Add different columnswhich reflect your own business profit drivers or levers, and to provide the most relevantmeasures.

quantitytotal

sales

value

average value % gross margintotal sales or

gross margin

product 1

product 2

product 3

product 4

totals

Do the same for each important aspect of your business, for example, split by marketsector (or segment):

quantitytotal

sales

value

average value % gross margintotal sales or

gross margin

sector 1

sector 2

sector 3

sector 4

totals


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And, for example, split by distributor (or route to market):

quantitytotal

sales

value

average value% gross

margin

total sales or

gross margin

distributor 1

distributor 2

distributor 3

distributor 4

totals

These simple split analysis tools are an extremely effective way to plan your sales andbusiness. Construct a working spreadsheet so that the bottom-right cell shows the totalsales or gross margin, or profit, whatever you need to measure, and by changing thefigures within the split (altering the mix, average prices, quantities, etc) you can carry out'what if?' analysis to develop the best plans.

If you are a competent working with spreadsheets it is normally possible to assemble

all of this data onto a single spreadsheet and then show different analyses by sorting

and graphing according to different fields.

When you are happy with the overall totals for the year, convert this into a phasedmonthly plan, with as many lines and columns as you need and are appropriate for thebusiness. Develop this spreadsheet by showing inputs as well as sales outputs - the

quantifiable activity (for example, the numbers of enquiries necessary to produce theplanned sales levels) required to produce the planned performance. Large businesses needextensive and multiple page spreadsheets. A business plan needs costs as well as sales,and will show profit as well as revenue and gross margin, but the principle is the same:plan the detailed numbers and values of what the business performance will be, and whatinputs are required to achieve it.

Write your marketing plan or business plan

Your marketing plan is actually a statement, supported by relevant financial data, of howyou are going to develop your business. Plans should be based on actions, not masses ofhistorical data. The historical and market information should be sufficient just to explain

and justify the opportunities, direction, strategy, and most importantly, the marketingactions, methods and measures - not to tell the story of the past 20 years of yourparticular industry.

"What you are going to sell to whom, when and how you are going to sell it, how muchcontribution (gross profit) the sales produce, what the marketing cost will be, and whatwill be the return on investment."


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As stated above it is easiest and best to assemble all of this data onto a spreadsheet, whichthen allows data to be manipulated through the planning process, and then changed andre-projected when the trading year is under way. The spreadsheet then becomes the basisof your sales and marketing forecasting and results reporting tool.

As well as sales and marketing data, in most types of businesses it is also useful to

include measurable aims concerning customer service and satisfaction.

The marketing plan will have costs that relate to a marketing budget in the overallbusiness plan. The marketing plan will also have revenue and gross margin/profitabilitytargets that relate to the turnover and profitability in the overall business plan. This data isessentially numerical, and so needs also some supporting narrative as to how the numberswill be achieved - the actions - but keep the narrative concise; if it extends to more than ahalf-dozen sheets make sure you put a succinct executive summary on the front.

The marketing plan narrative could if appropriate also refer to indirect activities such asproduct development, customer service, quality assurance, training etc., if significantly

relevant to achieving the marketing plan aims.Be pragmatic - marketing plans vary enormously depending on the type, size andmaturity of business. Above all create a plan that logically shows how the business canbest consolidate and grow its successful profitable areas. The marketing plan should be aworking and truly useful tool - if it is, then it's probably a good one.

Sample business plan, marketing plan or sales plan sample structure and example

format/template

Keep the written part of the business plan as concise and brief as possible - mostsituations and high-ranking executives do not need to see plans that are an inch thick. If

you can make your case on a half dozen pages then do so. Particularly if your plan ismore than 5-6 pages long, produce an executive summary (easiest to do when you havecompleted the plan) and insert it at the beginning of the document. If you need to includelots of reference material, examples, charts, evidence, etc, show these as appendices atthe back of the document and make sure they are numbered and referenced during themain body of the plan. Each new section should start at the top of a new page. Numberthe pages. Important plans should be suitably bound. All business plans should beprofessionally and neatly presented, with no grammar and spelling errors, clearly laid outin an easy to read format (avoid lots of upper-case or fancy fonts or italics as these are alldifficult to read). Your business plan contents and structure should be as follows:

Business plans structure

Title page: Title or heading of the plan and brief description if required, author,date, company/organization if applicable, details of circulation and confidentiality.

Contents page: A list of contents (basically the sections listed here, starting withthe Introduction page) showing page numbers, plus a list of appendices oraddendums (added reference material at the back of the document) allowing the


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reader to find what they need and navigate the document easily, and to refer othersto particular items and page numbers when reviewing or querying.

Introduction page: Introduction and purpose of the plan, terms of reference ifapplicable (usually for formal and large plans or projects).

Executive summary page: Optional and usually beneficial, this should normallybe no more than a page long (or it's not an executive summary) - the key points ofthe whole plan including conclusions, recommendations, actions, financial returnson investment, etc., clearly readable in a few minutes.

Main body of plan: sections and headings as required, see template below.

Acknowledgments and bibliography/reference sources: if relevant (onlyrequired normally for very large formal plans)

Appendices: appendices or addendums - additional detailed reference material,examples, statistics, spreadsheets, etc., for reference and not central to the mainpresentation of your plan.

Business plans - main body sections examples template

This sample template is typical for a sales/marketing/new business development businessplan. (A business plan for a more complex project such as an international joint-venture,or the formation of a new company including manufacturing plant or other overheadactivities would need to include relevant information and financials about the overheadsand resources concerned, and the financials would need to show costs and profits morelike a fully developed profit and loss account, with cash flow projections, balance sheet,etc.) Where appropriate refer to your position regarding corporate ethics and socialresponsibility. While these aspects are not mechanisms within the plan, they are crucial

reference points.

1. Define your market - sector(s) and segment(s) definitions2. Quantify your market (overview only) - size, segmentation, relevant statistics,

values, numbers (locations, people/users, etc) - make this relevant to you business3. Explain your market(s) - sector trends, eg., growth, legislation, seasonality, PEST

factors where relevant, refer to Ansoff matrix, show the strategic business driverswithin sector and segments, purchasing mechanisms, processes, restrictions - whatare the factors that determine customers' priorities and needs - this is a logicalplace to refer to ethics and CSR (corporate social responsibility

4. Explain your existing business - your current business according to sector,

products/services, quantities, values, distributor, etc.5. Analyse your existing customer spread by customer type, values andproducts/services including major accounts (the 'Pareto Principle' or the '80:20rule' often applies here, eg., 80% of your business comes from 20% of yourcustomers)

6. Explain your products and services - refer to Boston matrix and especially yourstrategic propositions (what these propositions will do for your customers)including your USP's and UPB's (see sales training section and acronyms)
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7. Explain you routes to market, gatekeepers, influencers and strategic partners - theother organizations/individuals you will work with to develop your market,including 'what's in it for them', commissions, endorsements, accreditations,approvals, licenses, etc.

8. Case studies and track record - the credibility, evidence and proof that your

propositions and strategic partnerships work9. Competitor analysis, e.g., SWOT analysis of your own business compared toSWOT analysis of each competitor

10. Sales/marketing/business plan (1 year min) showing sales and margins byproduct/service stream, mix, values, segment, 'distributor', etc, whatever isrelevant, phased monthly, in as much detail as you need. This should be on aspreadsheet, with as many different sheets as necessary to quantify relevant inputsand outputs.

11. List your strategic actions (marketing campaigns, sales activities, advertising, etc)that will deliver the above, with costs and returns. This should be supported with aspreadsheet, showing cost and return on investment for each activity.

Other business planning and marketing issues

Staffing and training implications

Your people are unlikely to have all the skills they need to help you implement amarketing plan. You may not have all the people that you need so you have to considerjustifying and obtaining extra. Customer service is acutely sensitive to staffing andtraining. Are all of your people aware of the aims of the business, its mission statementand your sales propositions? Do they know what their responsibilities are? How will youmeasure their performance? Many of these issues feed back into the business plan underhuman resources and training, where budgets need to be available to support the

investment in these areas.

Customer service charter

You should formulate a customer service charter, extending both your mission statementand your service offer, to inform staff and customers what your standards are. Thesestandards can cover quite detailed aspects of your service, such as how many times thetelephone will be permitted to ring until the caller is gets an answer. Other issues mightinclude:

How many days between receipt and response for written correspondence.

Complaints procedure and timescales for each stage.

This charter sets customer expectations, so be sure you can meet them. Customers getdisappointed particularly when their expectations are not met, and when so manystandards can be set at arbitrary levels, thinks of each one as a promise that you shouldkeep. Business-to-business customers would expect to agree these standards with theirsuppliers and have them recorded as part of their contracts, or as SLA's (service levelagreements). Increasingly, large customers demand SLA has to be tailored to their own
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specific needs and the process of developing these understandings and agreements iscrucial to the maintenance and development of large contracts.

Remember an important rule about customer service: It's not so much the failure to meetstandards that causes major dissatisfaction among customers - everyone can make amistake - the biggest cause of upset is the failure of suppliers to inform customers and

keep them updated when problems arise. Not being told in advance, not receiving anyapology, not getting any explanation why, and not hearing what's going to be done to putthings right, are key areas of customer dissatisfaction, and therefore easy areas forsuppliers to focus their efforts to achieve and communicate improvements.

A special point of note for businesses that require a strong technical profile among theirservice staff: these people are often reactive by nature and so not good at taking initiativeto identify and anticipate problem areas in customer service. It's therefore helpful toestablish suitable mechanisms and responsibility to pick up problems and deal with them- a kind of trouble-shooting capability - which can be separately managed and monitoredat a strategic level. Do not assume that technically-oriented staff will be capable of

proactively developing customer service solutions and revisions to SLA's - they generallyneed help in doing so from staff with high creativity, empathy, communications andinitiative capabilities.

Establish systems to measure customer service and staff performance

These standards and the SLA's established for large customers need to be visible, agreedwith customers, measurable. You must keep measuring your performance against them,and preferably publishing the results, internally and externally. Customer complaintshandling is a key element:

Measuring customer complaints is crucial because individual complaints are crucial areas

to resolve, and as a whole, complaints serve as a barometer for the quality andperformance of the business. You need to have a scheme which encourages, notdiscourages, customers to complain, to open the channels as wide as possible. Mostbusinesses are too defensive where complaints are concerned, preferring to minimisetheir importance, or to seek to justify and excuse them. Wrong. Complaints are theopportunities to turn ordinary service into unbeatable service.

Moreover, time and again surveys suggest that anything up to nine out of ten people donot complain to the provider when they feel dissatisfied - they just keep theirdissatisfaction to themselves and the provider never finds out there's a problem, evenwhen the customer chooses to go elsewhere. But every complaining customer will tell at

least a couple of their friends or relations. Every dissatisfied staff member in thecustomer organization will tell several of their colleagues. Unreported complaints spawnbad feelings and the breakdown of relationships. It is imperative that you capture allcomplaints in order to:

Put at ease and give explanation or reassurance to the person complaining.

Reduce the chances of them complaining to someone else.


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Monitor exactly how many dissatisfied customers you have and what the causesare, and that's even more important if you're failing to deliver your mission statementor service offer!

Take appropriate corrective action to prevent a re-occurrence.

If appropriate (ie for large customers) review SLA's and take the opportunity toagree new SLA's with the customer.

Implications for IT, premises, and reporting systems

Also relating to your business plan are the issues of:

Information Technology - are your computers and communications systems capable ofgiving you the information and analysis you need? How do you use email - is it helpingor hindering your business and the quality of service you give to your customers? Whatinternet presence and processes do you need? How should your voice and data systemswork together? What systems need to be available to mobile staff? What customer

relationship management (CRM) systems should you have? How should you consider allthese issues to see the needs and opportunities? IT and communications systemsincreasingly offer marketing and competitive advantage to businesses in all sectors -make sure you know hat IT can do for you and for your customers.

Premises - Review your premises and sites in light of your customer service, distribution,and customer relationship requirements. Pay particular attention anywhere in yourorganization that your customers visit - the impression and service you give here iscritical.

Reporting systems - If you can't measure it you can't manage it, and where finance andbusiness performance is concerned this is certainly true. First you must identify and agree

internally your key performance indicators (KPI's). Identify every aspect of your serviceor performance that is important - then you need to be able to measure it and report on it,and where people are involved in performing to certain standards then the standards andthe reporting needs to be transparent to them also.

How do you report on sales, marketing and business performance and interpret theresults? Who needs to know? Who needs to capture the data?

Communications and ongoing customer feedback are essential

Having an open dialogue with your customers is vital. There is a double benefit to yourbusiness in ensuring this happens:

You nip problems in the bud and stay aware of how you are performing.

Your customers feel better about the service you provide because of thecommunications, or from the fact that the channel is open even if they do not use it- its human nature.

Effective Sales Management: Short And Long-Term Planning, Forecasting, And

Expense Budgeting
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It is not enough these days to hire a salesperson and say: "Get out there and sell." As anindustry and in each particular hospitality business, we must work to do a better jobcommunicating, developing, training, motivating, planning, organizing, directing andcontrolling. This applies to both people and process.

Engage in these sales guiding principles when soliciting/booking business andservicing

existing accounts:

1. Mapping out Your Sales Plan

A. Acquire and use good selling knowledge. There are a series of fundamentalquestions that are essential for long-term success. These include details on finding outthat your customers are:

Their points of origin or where are they coming from -- we can identify this by thereservation, the registration card, our PMS system or other sources. Thisinformation can be essential to measuring the effectiveness of a marketing

campaign or to quantify changing demographics. How did they come to select your property? Were you their first choice? Were

they referred by an area business, another hotel, or because their first choice wasnot available? Are the loyalty programs encouraging them to choose yourlocation?

Why do they stay at your property ? Are they there for a meeting, an overnight, avacation, a reunion, in response to an advertisement? Your front desk staff canqualify this very important information and the sales team can then use this toupdate their future forecasts and proactive planning

How long do they stay? Obviously multiple nights are desirable if the rate andrevenue are properly set.

How much do they spend? Total revenue is also a contributing factor to usefulknowledge.

All of this data should help to focus your sales effort. Using the above information canalso help you in understanding and addressing cash flow.

Attentiveness to Selling Costs.

In any business, spending more than you take in, of course, is dangerous. Costeffectiveness in selling for a hotel is very important. As total sales expenditures start tocreep up, you must continue to expect a greater return from your sales effort. Budgetingfor sales and monitoring the sales budget against results are essential. This means pricing

properly, including the costs for loyalty programs and measuring the effectiveness ofspecial advertising or marketing efforts.

B. Plan A Good Market Mix. Which there are clear differences in markets, there arealso overlapping ones, such as a corporate client today that may be a vacationertomorrow or their company might have extended stay needs that your hotel can serve. Itis extremely difficult to be all things to all people all the time, which means knowingyour proper customer base. While one does not want to turn away potential revenue or


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clients, understanding the mix of business reflects how much of what type of businessyou are doing.

Look at your records and daily reports and assess the following: What percentage of mytotal room sales comes

From meetings at your hotel or nearby centers ? From youth groups or sports related activities ? From the transportation center (airport, bus, cruise lines, trains, etc) ? From seniors and why? From the brand reservation center and at what rates and plans? From the nearby community college, university, large high school? From the medical center or offices? From the chamber of commerce or convention/visitors' bureau activities? From transient business, walk in guests and other categories?

Your daily reports should have this or similar information documented. If you do not, you

are missing a major piece of the sales and marketing process.

Now assuming you do have the above information and after you review the past 3-6months to accurately see trends, what decisions do you need to make in your sellingactivities? What mix of business would be most profitable? Which mix can you actuallyobtain? What changes need to be made in your selling activities?

C. Innovate - try something new. Remember: most successful entrepreneurs would notbe where they are today if they did not take a chance and try new things. Come up withfresh ideas to promote business and don't be afraid to put them into action.

D Focus on People. You want and need sales professionals who are sincere, believable,

down-to-earth, friendly, committed, well dressed and well mannered; in other words,individuals who will represent your property well. In an effective sales mind-set, thecommon ground is a commitment to anticipate guest wants and needs, and to engageevery associate from the owner to the general manager to all guest contact staff tounderstand the shared accountability for contributing to the overall hotel sales effort.

E Develop new sales techniques to book more rooms and new proposals to landmore group business. Every veteran hotelier can recall in his or her career examples ofhotel sales teams that were very creative and innovative. The brands, markets, cities, andspecific approaches were different but the spirit of these creative people is whatcontributed to their success. Realize that only a percentage of the new ideas will fully

work, but that percentage will contribute to the hotel's overall success. A dynamic salesculture is an atmosphere where all guest contact staff proactively seek to service guests'needs, which will produce satisfied customers and likely revenue improvement for thehotel.

F Don't ignore technology -- embrace it! Almost all branded hotels have systems thatheavily address online bookings and promotions, but they require the hotels to willinglysupport the programs. As most brands today genuinely are focusing on everyone'ssuccess (or in some cases, survival), there is a greater sense of partnership than at some


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times in past relationships within the industry. If you are an independent, there are manyservices available to assist you, including through your state, provincial or nationalhospitality associations.

2. Preparing and Revising Your Sales Forecast

Hillel J. Einhorn, whose quote was in the opening section, was not a hotelier but a scholarwho researched how managers made decisions. Occupancy and rate continue to stagnatein many locations globally, yet we must address both the specific and random factorsEinhorn mentioned.

A. Know Your Competition and specifically your direct competitors . I continue toread and hear more than one brand CEO warn that there are "going to be more emptyrooms at the hotel across the street from you and they are going to be scouting yourcustomers." The current heavily debated discounting by some brands globally is anotherchallenge to be addressed, but this is a personal battle fought at individual locations.

A thorough knowledge of the other properties near you and that compete with you can

help you size up your property and determine the areas in which you can compete thebest, whether it is location, price, size, product, service or amenities. The idea, of course,is to sell your positives and to expand your market share.

B. Research and qualify your multiple price policy. Selective discounting has its placein our industry. Hotels have been doing it for years, with special off-season, corporate,group, senior citizen and military rates, among others.

Do you know which special rates are generating business for you? A periodic review ofall your rates will help you establish the multiple-rate policy that's right for you.

There are many 3rd party sites that may or may not help your profitability and/or cash

flow. If you make the decision to work with a discounter such as Hotels.com, Expedia,Hot-Wire, Orbtiz, Booking Buddy, PriceLine, Travelocity or the new "hot" service, trackyour actual demand (rooms used, rooms denied because you were full, rooms declinedfor reasons of rate, location, etc.) so you can evaluate intelligently the business decision.

Determine what your competition is doing by these organizations as well so you canmake the correct decision for your hotel.

Evaluate what your brand's programs are contributing to your top and bottom line, ifyou are part of a system. Set your prices accordingly and support the programs that helpboth you and the other members of your system.

C. Sell Aggressively. Aggressive and assertive are not synonyms. One means hardhitting and the other confident -- in challenging economic times, those professionals insales must have some of both attributes to book the business. One can be aggressivewhile still being friendly, credible and sincere. Being tenacious, following up andensuring customer confidence all add up to success.

Pick the low hanging fruit A Google search of this often-heard term will offerliterally dozens of examples of this phrase, including this explanation:"Choose


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the easy deals or sales. [2]" On occasion, a quick boost in your sales andmarketing efforts can be to bring someone in with a fresh perspective. This freshset of eyes can be someone from another department in your hotel or company ora consultant on a short term assignment. This activity, if executed properly, cansolicit suggestions, remove unintentional biases and then choose and implement a

number of small action plans that may cost little but show noticeable revenuegains.

Make high-quality Business Contacts And Make Them Work For You.Getting good business contacts is the first step, and making sure they're bringingbusiness into your property the second. Make sure your contacts are frequentusers of either the area and/or your property and then ask them to provide youleads.

Set Realistic Growth Plans. Yes, even in down economies, there must be somestretch goals. These should assess where you where you are today and honestlyproject where you expect and want to be next year, the year after, and so on.

Group, corporate or any other market segment may have fallen off from previousyears, but there remain ways to maximize potential with better planning, timelyfollow-up or selective selling based on the information identified in 1C above --planning your market mix.

FORECASTING STRATEGY

Each month following the close of the previous month, REFORECAST for the next 90days and for the month just completed 12 months in advance. If you just finished June,the factors that supported or weakened the June performance will never be fresher in yourmind. When it is time to create an annual budget, you will be much more comfortable andflexible in your analysis and projections, and very likely more accurate as well.

Hiring the Right Salespeople

Full-Cycle Salespeople versus Half-Cycle Salespeople Finding Good Salespeople Hiring Salespeople Based on Your Business Needs Evaluating Candidates The Hiring Tool That Makes or Breaks a Candidate Investing in Your Sales Team Managing Cultural Performance Establishing Sales Job Descriptions Success Factors of Salespeople Who Hit Their Quota

Sales Team Compensation Plans Developing a Compensation Plan Implementing New Sales Compensation Plans Developing an Incentive Program

Training Salespeople

6 Reasons Why Most Companies Do Not Give More Sales Training Guidelines for Training Your Sales Team Making Your Sales Training More Successful
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Role-Playing Tips to Increase SuccessManaging Your Sales Team

How to Manage a Sales Team Managing Salespeople Who Work in Virtual Offices Managing the Salesperson Ride-Along

Holding Sales Meetings Holding Team Meetings Holding One-on-One Meetings Developing Weekly/Monthly Manager Action Plans Weekly Sales Activities Report Topics for Your Monthly Sales Meetings

Determining Sales Quotas

Common Quota Calculation Mistakes Calculating Sales Quotas Understanding Lost Sales Analysis Calculating Lost Sales Analysis & Sales Effectiveness

Resources for Market Research 19 Factors That Affect a Salespersons Performance

Managing Sales Forecasts

Controlling Sales Forecasting Moles Creating a Sales Forecast Tightening the Sales Forecast Differentiating Between a Forecast and a Pipeline Sales Closing Audit

Managing Sales by Metrics

Identifying Major Sales Metrics Evaluating Your Sales Teams Performance Sales Team Monthly Assessment

Managing Strategic Alliances and Channel Partners

Understanding Strategic ReplicationAlliance Partner Collective Strategic Partner ManagementRules to Guide Alliances and Collectives to

Increase SalesUsing Sales Scorecards to Manage More Effectively

Understanding the Sales Scorecard Concept Preparing a Sales Scorecard Implementing the Sales Scorecard

Integrated Pillar Management

Integrating the Pillars 6-Week Implementation Plan

Teaching Ethics and Morality

6 Guidelines on How to Communicate and Deploy Ethical Standards to YourSales Team

Successful Implementation is No Accident


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There are specific implementation steps we should consider during each of these times:walking up, standing on top, and walking down. Let us look at each of these three sets ofimplementation steps separately...

Pre-planning Implementation Steps

The first step perhaps the most important step is to demonstrate managerialcommitment. Commitment to the planning process and to the resultant strategies withinthe plan. You will need to demonstrate commitment, not just by word, but by deed aswell. By giving your own time to the planning process. In addition, by demonstratingyour readiness to allocate the necessary resources to the resultant strategies.

Next, you must select the "right" planning team members. They will come from the ranksof top management probably your key functional managers. This brings to your strategysessions the expertise necessary to develop the plan. In addition, it makes possible thenecessary immediate strategic decisions. Moreover, it involves the key executives in

development of the plan. Thus encouraging their commitment to the implementation theywill later direct.

You must gather the "right" information before developing your strategies. Not just theobvious the financial reporting information. Also information about your customers andthe benefits they seek in purchasing your products and services. Why they buy. Why theydo not. In addition, information about your competition. Their strengths. Theirweaknesses. And how their offering compares to yours. Successful strategies follow fromyour management team's full appreciation of your enterprise and its relationship to itsmarketplace. You need the "right" information to establish and up-date that team-wideawareness.

Also before planning, you should solicit input from your employees. To get theminvolved in the planning process. To "flush up" issues they feel are important.

This participation builds necessary commitment. Employees who have the opportunity toparticipate in developing their company's strategic plan feel "a part" of that plan. They'recommitted to the success of the plan and to the successful implementation of thestrategies within that plan.

While-planning Implementation Steps

During your strategic planning sessions, you have additional opportunities to encouragesuccessful implementation of your resultant strategies. First, you can encourageparticipation from all members of your planning team. You can work toward rich, livelydiscussions on all issues. Solicit input from the more hesitant, and, if necessary, temperthe more domineering individuals. To do so, you must be sure the facilitator of yoursessions has not only expertise in the planning process, but also, skill in handling theplanning team's interpersonal dynamics.


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You can also encourage implementation through focusing. Focus on the most importantthings. On what it takes to win. On your key success factors. On those few activities thatwill make you successful. Focusing on doing these "right things right" will not onlyconcentrate resources, but will concentrate resources on those factors, which are mostimportant.

You can encourage implementation by developing objectives measurable by your currentreporting system. You will be busy enough implementing your plan; you do not want topioneer a new reporting system at the same time. For example, all companies report salesvolume; but few report market share. For good reason. It is difficult to get agreement onthe total market size used in calculating market share. Moreover, even if you could agreeon total market size, data on market size is never available right now. This lack of timelyinformation means you cannot use a market share objective to manage your business day-to-day. For these reasons, market share is most often viewed as an approximate, ratherthan an exact measurement. It makes for a poor objective.

Nevertheless, suppose market share is important to your organization, as it is too many. Ifso, you can write your objective in terms of sales volume. Then you can estimate totalmarket size, and put that estimate in your list of "planning assumptions." Finally, in anappendix to your plan, you can divide your sales objective by your estimated market sizeto arrive at your intended market share. That way, you will have an objective (salesvolume), whose measurement is familiar to, and accepted by, those who must accomplishit. And just as important, it's a measurement that's available right now. So you can use itas a day-to-day tool in managing your business.

Also while planning; you can encourage successful implementation of your strategiesthrough developing a "balanced" list of objectives. By having one or more objectives

dealing with human resource issues working conditions; career development; benefitprograms. More of your employees care about human resources than about sales volumeand profit. Having a human resource objective, when those employees whose helpyou'll need in implementing your strategies ask "What's in it for me?", you'll have ananswer.

You should also develop strategies built on your company's strengths. If you're strong inmarketing, you'll best implement a strategy calling for promoting your way to success. Ifyou are good at product development, you had best invent your way to growth. Inaddition, you should not select a strategy just because it's "popular" or because "itworked" for another firm. It has to work for you. It must be built on your own company'sstrengths.

In addition, you will have to consider available resources. That means you need toestimate the resources required to implement each strategy. You must be careful aboutover-committing those resources particularly people. There's a fine line betweenchallenge, which encourages implementation; and over-commitment, which discouragesimplementation. Be careful.


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Finally, while developing your strategies, you should include a "built-in monitoringsystem." Have a key manager volunteer responsibility for implementing each strategy.That manager's name, along with a due date for completion, then becomes a part of thestrategy statement. Including a name and a due date aids in monitoring the strategy'simplementation and in assuring that a key manager "owns" each strategy.

Post-planning Implementation Steps

Following development of your strategies, you have additional opportunities toencourage implementation. First, you can communicate the plan to the folks who willhelp with its implementation. In fact, one of the two questions we ask of client-companyplanning teams at the conclusion of their strategy sessions is, "Now that we've developedthe strategic plan, how do you feel you should communicate it to your employees, and towhich of your employees do you think you should communicate it?"

And there's no singular "right answer" to the question of communication. The point is,

since you'll need your employees' help in implementing your strategies, you'd better tellthem what you're trying to accomplish. Consider the following...

We worked with a mid-sized manufacturing client in Los Angeles. We had justcompleted the organization's five-year strategic plan, and were about to begin work on itsone-year operational plan. The company's executive planning team decided to ask theirsupervisory-level managers for input regarding objectives for that one-year plan.

Asking for that input was very important for the company at that time. Because in Augustof that year, the firm was going to move to a new facility. Close down the factory for anentire month, pick up all the machinery, load it on trucks, drive it over to the new factory,

plop it down, wire it up, and go back to work. A good chunk of the month's productionwould be lost in the process.

This was no small issue. No small issue for production; no small issue for sales; no smallissue for customer service. The company's executives were concerned about theobjectives they could realistically set for that first year the year of the move. Followingdevelopment of the five-year strategic plan and prior to development of the one-yearoperational plan, we made a presentation to the company's supervisory-level managers.We introduced the strategic plan, and asked for input regarding the one-year plan and itsobjectives.

We got back the kinds of answers we went looking for. We got back information whichincluded the opinions of supervisory-level managers regarding the objectives they werecomfortable biting off that first year. But we got one more thing. One very importantthing. Something we didn't go looking for. And that was motivation. The supervisory-level managers said things like "We're working for a professional organization we'replanning." It seemed that the planning process spread motivation throughout thecompany.


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But it wasn't the planning process, per se, that encouraged motivation. The supervisory-level managers weren't "turned on" to their company simply because their executiveswere planning. Rather they were turned on because their executives asked them "what doyou think?" Their executives demonstrated they cared about their supervisors' opinion.Communication leads to motivation and, in turn, to successful implementation.

You can also encourage implementation through linking your strategic plan to youroperational plan. You can ask each manager responsible for a specific strategy to takethat strategy back to his or her department. And there, ask those employees who willimplement the strategy to develop tactics or "action steps." Askthem to assignresponsibility for each tactic; to set due dates; to project required resources.

But what about strategies which require the collective efforts of two or more departmentsto implement? Those are a bit more complex. Here, each department must still develop itsown list of action steps. But each department must also consider the action steps of theother departments on which its own performance is dependent. For example, a strategy

calling for development of a new product would involve efforts (action steps) by theR&D, marketing and production departments the activities of each clearly dependent onthose of the other two. To implement such strategies, management must encourage inter-department communication, understanding and cooperation.

To successfully implement your strategy, monitoring is an absolute necessity. Yourdepartment managers must monitor their tactical plans. And your executive planningteam must monitor the strategic plan. That way, if the strategy isn't happening, you canconsider your options changing the strategy, changing its implementation, or changingits due date.

Finally, you should watch for opportunities to "fine tune" your planning process. Thiswill help with implementation of your strategies in later years. You might, for example,at the third quarterly review of our strategic plan, take a little extra time to discuss theplanning process. To look back on your strategy development sessions. To ask, "whatwent well?" And "what didn't?" And "what changes might we suggest for next timearound?" Changes to improve the plan. To improve its implementation. To "fine tune"your planning process so it better fits your company's specific needs

IMPLEMENTATION: The Selling Process and Performance MeasuresThe selling process map

A customer relationship is the result of two or more independent processes combining

and groups of people interacting. Two processes always present in any customerrelationship are the selling process of the vendor and the customers buying process.Otherprocesses can be involved if other parties are involved in the relationship for buying,selling, implementing, or supporting the products.Unlike manufacturing environments that are set up to control the entire fabricationprocess, Sales can only try to influence the actions of the prospect. Even in executing thefundamentals of its selling process, Sales must accommodate the needs of the prospects


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buying process.This points to why many veterans insist that selling is an art and that talent is whatsells. Insofar as art is a medium to convey knowledge, meaning, and emotion, salespeopleindeed educate and create interpersonal rapport, trust, and confidence with prospects.They must certainly inspire emotional desire in the prospect to want to commit to a

relationship.Yet, as a repeating business operating function, there is also mechanical process orscienceunderlying selling. A sales manager once described selling as being like a bicycle. Thegears, chain, sprockets, pedals, frame, and wheels are the process the bicyclescapability and capacity. However, the steering, balancing and quality of energy poweringit thats talent.The selling process map is a common framework for guiding and measuring sellingworkflow through the sales pipeline. Development of the map started with TrailerVavricka, Inc. facilitating a two-day session for the salesforce to map its ownbestmethods

selling process. This identified and captured what seemed to produce the mostconsistent closing and best quality of customer results.The salesforce defined six macro-steps to their selling process. Each step contains anobjective (whatit is designed to accomplish), a desired result (how to determine theobjective is accomplished), and two subsets of detail step actions that usually lead toachieving the desired result. One set of actions list what the selling team generally needsto accomplish, while the other set lays out what the prospects buying team typicallyneeds to do at each point in the cycle.In the same session, the group also derived their prospect quality criteria, set its teamoperating rules for using the process consistently, and loaded their pipeline database withall current sales-in-process. This produced a unanimously agreed upon selling process insufficient detail to serve as the common structure to meaningfully measure operatingperformance for each individual territory and every management level..1997 Trailer Vavricka, Inc. Solana Beach, CA 858-755-1994All Rights Reserved11

Sales operating performance measures

Performance measures can show how effectively the combination of process and talent isoperating as in Figure 6, which shows pipeline revenue input rate. The performancemeasures can also identify significant changes in performance as they start to occur andthe pipelines bottlenecks. With such early warning signals, sales, marketing, and supportmanagers will be able to take timely action to keep the revenue production in control andmore predictable.PIPELINE INPUT REVENUE RATE - PERCENT FULL

Figure 6

Managers reasoned that implementing sales process performance measures wouldenhancefour fundamental management capabilities. They would provide all three CAREdepartments with quantified operational feedback, fact-based understanding, and clearrequirements for:1. Maintaining the production of sales revenue on-target to current FY budget goals;2. Increasing sales production capacity at leasta sales cycle length ahead of whenincreased sales targets call for greater monthly output;


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3. Continuously improving the processes within each CARE department, as well asthe daily execution of them, to increase operating capability;4. Synchronizing the CARE departments to operate as a single team, with thecommon goal of optimizing the overall operating performance of the sales revenuegeneration system.

Sales process performance measures would also directly support the salesperson, whosrole was defined as a TerritoryBusiness Manager, responsible for:1. Producing 100% or more of the current FYs assigned quarterly revenue targets;

REVENUE INPUT RATE

New Opportunities2025303540455021-Oct12-Nov27-Nov9-Dec23-Dec7-Jan21-Jan3-Feb18-Feb2-Mar17-Mar30-Mar14-Apr27-Apr11-May

Dave's Territory

Direct Pipeline

***A L E R T***

INPUT RATE FALLING.1997 Trailer Vavricka, Inc. Solana Beach, CA 858-755-1994All Rights Reserved11

PIPELINE INPUT REVENUE RATE - PERCENT FULL

Figure 6

.1997 Trailer Vavricka, Inc. Solana Beach, CA 858-755-1994All Rights Reserved12

2. Developing a continuous business pipeline flow adequate to meet the monthlyrevenue targets across fiscal quarters and fiscal year boundaries - with 100%customer satisfaction;3. Improving quarterly forecast accuracy to within +/- 15% of actual.Due to the dynamically changing status of each pipelines performance and capacity,everyones measures need to be recalculated each week, in order for the feedback graphsto effectively reveal changes in performance. The following measures were selected tomonitor the performance of the sales process with respect to the given objective.Producing 100% or more of the quarterly revenue targets

Input revenue flow per month is the amount of new revenue needed by eachpipeline, and would be calculated according to how the territorys pipeline wasactually operating. For example, a pipeline operating at a 20% close rate with a


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$100K/month quota would need $500K of new input each month to keep its flowgoing; but only $250K if its close rate had improved to 40%. New sales project quality is another key leading performance indicator, alongwith input revenue flow. Better quality prospects typically close at significantlyhigher rates, taking less average cycle time. The opposite is true for poorer quality

prospects. To develop a consistent way to measure the relative quality of eachprospect opportunity, salespeople agreed on the top five most importantdeterminants of a prospects quality. These criteria went beyond merely arbitrarydemographics into the characteristics most germane to forming a long-termcustomer relationship. A rating scale of 5 to +5 was used for each criteria. Thismeasure showed the average quality of the input stream as well as the overallpipeline contents. Close rate by process step is the calculated probability to close from each step ofthe sales process, for each pipeline. This is also used in calculating several othermeasures such as input rate, pipeline %full, and projected output. Pipeline %full shows whether the revenue of sales-in-process is enough to

support the monthly revenue objective. This is a good indicator of how healthy thepipeline is according to its current close probability, cycle time, and its volume-inprocesscapacity. Figure 7 is an example of a performance chart. Average project revenue size is calculated across all the sales projects currentlyin a pipeline. Revenue growth can be significantly increased by the pipelinespopulation of prospects becoming larger in average size, requiring a lower totalnumber of projects to be found and worked. In the companys case, it takes almostthe same amount of effort and time to win a small contract as it does for a largeone..1997 Trailer Vavricka, Inc. Solana Beach, CA 858-755-1994All Rights Reserved13

Output revenue percent to fiscal quarter target is simply the actual revenuerecognized per fiscal quarter as a percentage of the territorys revenue quota forthe same quarter. This is the traditionally used results measure.SAMPLE PERFORMANCE CHART

Figure 7

Developing a continuous adequate pipeline flow

Pipeline forecast projection by month and YTD cumulative position shows thesalesperson and manager how the current pipeline contents, will probably flow outin future months and accumulate in YTD revenue. This is based on the individualperformance measures of each pipeline, giving each person a relevant picture ofwhere they stand and are likely to be in future months. Everyone can see whethertheir projected sales revenue position is below or above their target. The projectionspans fiscal period boundaries to keep visible the need to maintain continuity in

each pipelines adequate flow at all times. Cycle time by process step is the total time in weeks that the average sales projecttakes to go through the pipelines sales process steps. Steps with large time sinksshould be candidates for investigating what is causing delays to see if the processcan be improved. Cycle time is also used in calculating several other measuressuch as projected revenue output, pipeline %full, and course correction. A samplechart is shown by Figure 8.Pipeline %FULL -- Control Chart


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Joe's Territory

(compared to Western Region Avg. Territory)30%40%50%60%70%80%90%2-Feb

9-Feb16-Feb23-Feb2-Mar9-Mar16-Mar23-Mar30-Mar6-Apr13-Apr20-Apr27-Apr4-May11-May18-May25-May1-Jun8-Jun15-Jun

Direct Pipeline

Region upper control limit

Region lower control limitRegion meanJoe's Territory

Region Avg. Territory

.1997 Trailer Vavricka, Inc. Solana Beach, CA 858-755-1994All Rights Reserved14

SELLING CYCLE TIME COMPARISON CHART

Figure 8

%Fall-out by process step shows the portion of potential revenue of salesprojects that were lost or otherwise scrapped out of the pipeline. Large portions offall-out early in the sales cycle usually points to low or misgauged prospectquality, whereas late in the process, it suggests a need for selling process orexecution improvement. Reducing fall-out has the effect of raising the close rateand reducing overall average cycle time. Moving fall-out forward in the sales cycle

prevents wasting time and resources on future scrap, enabling them to be appliedto better opportunities. This can raise the close rate and improve sales volume. Asample chart is shown by Figure 9.REVENUE FALL-OUT BY PROCESS STEP

Figure 90123456

7Step1

Step2

Step3

Step4

Step5

Step6

Weeks

You Sales Force Average

Current Cycle Time by Sales Process Step


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0%5%10%15%20%25%30%35%

40%Step1

Step2

Step3

Step4

Step5

Step6

% of Total FALL-OUT

You Sales Force Mean

FALL-OUT of Revenue By Sales Cycle Step.1997 Trailer Vavricka, Inc. Solana Beach, CA 858-755-1994All Rights Reserved15

The fall-out in each step can also be analyzed by competitor, product, industry segment,and selling team. The patterns of fall-out can provide insight into what is causing it and

how it might be reduced. Similar analysis can be done on closed opportunities to seewhere particular people or approaches are stronger, so those tactics can be deployed to allterritories.Improving quarterly forecast accuracy

Quarterly forecast accuracy is measured by the difference between forecast andactual revenue as a percentage of the forecast. The forecast is what was predictedas of the last day of the previous fiscal quarter. Each quarterly period is calculatedeach month on a rolling quarterly basis.

IMPLEMENTATION: Consistent Daily Use and FeedbackManagement consistently encouraged all the salespeople to adopt and regularly executethe sales process procedures as a daily habit. The goal was to establish the process as a

standard framework for managing sales opportunities as individual projects. Managementfelt this framework would accelerate getting every salesperson up to a high level ofsellingcompetency and provide managers with the information they needed to become effectivecoaches. Managers reinforced the process orientation by using the sales process as thecontext for every sales opportunity discussion, resource and quotation request,forecasting,planning and debriefing every sales call, and all interfacing of the field with marketing,inside sales, technical consulting services, and customer support groups.The sales force information system was upgraded to incorporate the mapped sales processsteps, prospect quality criteria rating, pipeline per territory, and to regularly capture the

needed data on all sales project movement through closing or fall-out. The system wouldserve as the companys sustaining mechanism for deploying the cultural continuation ofits best process behaviors throughout the involved departments. Management felt thesalesmeasurement and management system would provide the degree of control it needed -andhad never had before.The sales management system needed to have algorithms built into it to make the


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performance measurements each weekend for each remote salesperson, up through theconsolidated VP Sales level. The system would have to: Measure the chosen vital signs ofin-process sales revenue production flow, andshow statistically significant changes and forming trends in actual operatingperformance;

Provide on demand the sales forecast projection based on the actual operatingstatistics as measured each week; Report the measures graphically so everyone could easily understand and monitorperformance.Due to limited internal programming resources, implementing a complete salesmanagement system with these capabilities was going to take much longer thanmanagement desired. To get started as quickly as possible, an interim system was put in.1997 Trailer Vavricka, Inc. Solana Beach, CA 858-755-1994All Rights Reserved16

place to measure the pipelines for current territories and the aggregate national pipeline.Tools such as Excels database query, pivot table, and graphing were used to summarizethe data and track changes in the operating measures. Although not as sophisticated as thenew sales management system would be, the patchwork system was capable of providingreliable performance measures.Each remote salesperson had a computer, which would automatically send all salesprojectupdates made each week to the central database. Salespeople made up a common set ofsystem updating procedures so they all understood how to consistently use the salesprocess and do timely and accurate system updating as sales projects progressed. Thismade the data very complete and reliable.

IMPACT ON OPERATING PERFORMANCEThe sales operation was able to increase both its headcount and output rate over the firsttwo quarters of Year 2. The YTD performance measurements of Figure 10 show an

interesting picture of current sales operating conditions and reveal the challenge forattaining the next two quarters sales targets.IMPACT ON PERFORMANCE - FROM YEAR 1 TO YEAR 2

Figure 10

The most striking improvement is the close rate jumping f

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