What Is Sales Planning?

Markets remain erratic, supply chain snags linger, inflation remains stubbornly high, and sales activity continues its shift away from conventional channels. With this kind of uncertainty, drawing up a sales plan on a spreadsheet won’t cut it anymore. These cascading challenges have pushed sophisticated sales planning practices, and the technology solutions that support them, to the forefront. Businesses want to formulate and revise their sales plans quickly. They want to set attainable revenue targets and push those targets to a chief revenue officer to assign territories and set quotas for sales reps. They want to track performance at a granular level, as well as adopt compensation models that motivate everyone to execute and succeed.

But achieving those goals takes a lot more than breaking away from the spreadsheets of old. Businesses need to holistically implement time-tested strategies and best practices, make decisions based on data and not just instinct, and deploy cloud-based applications designed to overcome the many stumbling blocks in the sales cycle. Modern sales planning strategies and methodologies help sellers win the trust of customers by nurturing interpersonal relationships. And in a world where more and more deals originate and close online, they must also provide visibility into accounts entirely lacking a human touch.

What Is Sales Planning?

Sales planning entails developing and documenting a strategy for how the sales organization allocates its limited resources to best achieve revenue targets and broader company objectives. The process yields a sales plan that outlines the steps toward optimizing sales team performance. The steps involve include establishing revenue goals, identifying target markets, assigning sales territories, setting quotas and compensation models for sales reps, evaluating consumer buying trends and market dynamics, and consistently collecting data to evolve the plan over the lifetime of a sales campaign.

Sales Planning vs Sales Plan

Sales planning is a process used to create yields a sales plan that clearly documents sales targets, goals, and strategies over a fixed period. But a sales plan is never carved in stone. Sales planning is an ongoing process where sales leaders continually monitor real-world results, assess evolving market conditions, and create new forecasts based on shifting data and models. And when these results and forecasts stray from initial expectations, planners will amend the existing sales plan accordingly.

Key Takeaways

• Sales planning is the process by which sales professionals develop and document the strategy they think is most likely to achieve targets.
• These prescriptive steps are documented in a sales plan that sets out territory assignments, quotas for regional teams, commissions for sales reps, and the tools the reps should use to achieve the outcomes expected of them.
• The global pandemic—with its travel bans, lockdowns, and social distancing mandates—has drastically disrupted typical sales motions. B2B and B2C sales activity has surged online, and sales teams need to adjust to that enduring reality.
• Sales planners have traditionally used cumbersome spreadsheets to document their sales execution plans. But cutting-edge tools, including those with built-in AI, can provide sales leaders with greater visibility into sales performance so they can model scenarios and stay on track to achieve their targets. Such applications also make it easier to adjust projections and quotas based on frequently shifting goals and risks; they also deliver more reliable forecasts.

Sales Planning Explained

Sales planning is a multifaceted process that yields a detailed, prescriptive plan to drive sales for a company’s products across geographic regions and target markets.

The process usually starts with financial leaders, ideally in consultation with sales leaders, setting revenue targets that are both ambitious and realistic. Finance pushes those targets to the sales organization, often through the office of the chief revenue officer.

The CRO and his or her management team must then formulate a plan to achieve the desired results. That starts with identifying markets that are likely to prove fruitful with sales resources dedicated to them. The CRO also sets quotas for broad regions, localized teams, and individual sales reps, as well as commissions that incentivize everyone to execute and succeed.

Sales plans need to be precise, yet flexible enough to adjust to changing market conditions. Sales leaders must track multiple performance metrics on a granular level—including conversion rates, customer acquisition costs, and customer feedback—to know when to change up their plans.

Why Is Sales Planning Important?

Sales planning is important because it has an outsized impact on a product’s success in the market. An effective plan can increase revenue by positioning sales reps to close more, and larger, deals, by applying data-driven insights to assign territories, targets, and quotas to optimize sales results. This has the added benefit of motivating existing sales reps and boosting their productivity, while also attracting talented sellers with earnings potential, thus further fueling into the sales motion. A well-conceived sales plan also helps with customer relations in that it ensures that knowledgeable sellers are accessible to the largest number of potential and existing customers and that regional teams are staffed and equipped to service important accounts.

Role of Sales Planning in the Business

Sales planning can depend on, and affect, many separate company divisions. For that reason, the sales org should never be siloed. Because sales leaders have unique visibility and insights into sales volumes, they should work closely with financial leaders to establish revenue targets. Targets set too high can engender dissatisfaction and turnover on the sales team; targets set too low don’t take advantage of a team’s full potential.

The sales org also needs to coordinate with HR to structure commissions. Sales leaders might have a good sense of what profit margins on which products and in which regions will best motivate their teams, but they don’t directly control the payroll.

And it’s vital for the sales org to be aligned with marketing when it comes to generating customer interest. Marketing campaigns lay the groundwork for successful sales motions. Meanwhile, sales reps who interact directly with customers often develop unique insights as to where demand lies, where marketing resources can best foster product awareness, and which campaigns are proving effective. Sales and marketing are highly interdependent—success depends on these teams articulating common messaging.

Elements of Successful Sales Planning

Ultimately, sales planning should draw from the instincts of seasoned sales leaders, supported by rigorous data analysis, to advance the sales force’s mission of driving revenue. However, the following time-tested tactics and tools are common to most successful sales strategies.

• Set realistic targets and quotas: Sales planners should work hand in hand with financial leaders to make sure revenue targets are ambitious, but attainable. Unrealistic revenue targets get converted into unrealistic sales quotas that can demoralize talented sellers. The quotas that sales reps are expected to meet should be based on the specific products they’re selling and the markets they’re selling into. Everyone, from regional managers to team leaders to individual reps, should understand what’s expected of them and feel empowered to share input.
• Identify target markets and key accounts: In their plans, sales planners should strive to methodically identify and clearly document the geographic and demographic markets most likely to be receptive to specific products, as well as their key accounts within those markets. That requires a rigorous analysis of consumer dynamics, market trends, seasonal shifts, and regional and global events that could impact consumption, among other factors.
• Evaluate the competition: Understanding the approaches that successful competitors are taking to sell comparable products is extremely valuable when developing a sales plan, especially for companies launching new products. Planners should study competitors’ sales data and try to glean insights from the various strategies they employ.
• Carefully consider compensation: Compensation incentivizes success. The commissions kept by sales reps, and the margins that determine them, can motivate reps to work harder and pitch products more effectively. Healthy commissions also make it more likely that a company will recruit and retain top sales talent. But setting required margins too high can hurt sales, particularly in a highly competitive market, and ultimately eat away at profits. The margins set in compensation models should be thought through carefully and fine-tuned in line with metrics for specific products and regions.
• Coordinate across departments: The sales org should never operate independently of other business departments. Sales teams that don’t closely coordinate their planning with finance, HR, and marketing are bound to fall short of their potential.
• Embrace AI: Artificial intelligence gives planners a powerful new tool for forecasting sales and analyzing deals. Applications that leverage AI algorithms trained on contextual data can help sales organizations better allocate resources for the next quarter or year, reevaluate customer opportunities, align with broader company objectives, and highlight the most effective sales methodologies.

5 Sales Planning Best Practices and Tips

Even as sales activity is increasingly moving to online platforms, the following tried-and-true approaches to sales planning remain highly effective.

Sales Planning Process: How to Create a Sales Plan

The process of creating a sales plan typically originates outside of the sales org.

The finance department sets revenue targets for a fiscal quarter or year, while executive management articulates broader company objectives such as the market penetration of a new product or expansion into new markets for an existing one.

Sales planners need to convert these financial targets and company objectives into clear sales goals. These goals and quotas don’t always prioritize maximum total sales. In fact, there are times when companies want to intentionally limit availability of their products at a given price, either to invoke the prestige of owning something scarce or to avoid overwhelming existing production capacity.

The next step is to define an actionable strategy to realize sales goals. That involves identifying specific markets, both by region and demographic, that will be fertile ground for the product being sold—if you’re selling surfboards, for example, you probably shouldn’t dedicate resources to landlocked states. Sales leaders should lean on the experience and insights of their teams when targeting markets, while also incorporating large amounts of market research data and analytics.

Sales planners must then take stock of the resources they have available to get the job done. They will be working within an allotted budget that limits how much they can spend on hiring sales managers and reps, generating leads, visiting customers, and provisioning sales tools. They’ll need to intelligently deploy those resources across geographic areas, product lines, and accounts based on potential returns. Sales orgs might also shuffle territory assignments, or hire new reps to fill gaps, as they shift focus to new products or implement new plans.

The sales plan should set quotas for regions, teams, and individual reps. It should also prescribe selling tactics, including cold-call scripts, tips for working with resellers, guidance on how to shepherd deals that originate on online platforms, and the rules for entertaining prospects. The sales plan should stipulate how reps receive training in these tactics and product functionality, how they’re allocated leads, and how they’ll access selling systems to help them collaborate and review their metrics.

To motivate success, sales leaders set margins for each product that will determine the commissions that reps receive when they close a deal. Insufficient margins might frustrate reps and fail to attract selling talent to the org, but overly high margins could turn off customers and eat into revenue and profits.

Finally, it’s important to remember that a sales plan isn’t static. Plans should always be adjusted to the reality in the field—or be abandoned altogether if they fail to yield results. To that end, sales leaders must ensure they’re collecting quality performance metrics. That means tracking leads, deals, revenue, and satisfied clients at the level of reps, teams, and regions.

Improve Efficiency and Increase Revenue with Oracle Sales Planning

The latest and greatest sales planning tools, if siloed, will fall short of delivering the benefits they promise. Point solutions and fragmented systems can’t adequately meet the complex needs of sales orgs in increasingly complex markets.

Oracle Sales Planning and Oracle Sales Performance Management, part of the Oracle Customer Experience suite of applications, connect seamlessly with finance and workforce planning modules included in the Oracle Enterprise Performance Management (EPM) suite. These sales planning tools provide real-time visibility into the performance of sales teams. With these tools, sales leaders can set, analyze, and adjust quotas for large teams and individual reps. They can also use the applications to sharpen forecasts, optimize territory assignments, generate leads, clear bottlenecks, identify effective tactics, and align with other business divisions. Oracle’s cloud-based sales planning solutions harness the power of data and AI to deliver a degree of insight that sales leaders could once only dream of.

Sales Planning FAQs

How did sales activity change during the COVID-19 pandemic?
With the pandemic’s lockdowns, social distancing measures, and travel restrictions, the shift to online sales accelerated. While some lament the declining interpersonal dimension, the torrent of data streaming in from an ever-increasing share of deals done online can be a boon to sales planners.

How does sales planning extend outside the sales org?
Sales planners need to work closely with finance leaders to make sure the revenue goals set by the CFO translate into achievable sales quotas. They need to coordinate with HR to provide compensation packages that incentivize sales reps. And they need to work with the marketing department to ensure common, unified messaging that generates customer interest.

How are sales quotas set?
Sales planners set quotas for regions, teams, and individual reps based on the revenue targets passed down from the finance department and executive management.

Which technologies are revolutionizing sales planning?
The increasing complexity of the sales motion is spurring adoption of cloud-based planning solutions integrated with the larger estate of enterprise finance, HR, marketing, performance management, and other applications. Once the sales org has populated these integrated applications with quality data culled from sales automation platforms, they can then unleash AI to hone forecasts, improve execution plans, and deliver insights valuable to the field reps who are still schmoozing with clients over dinner.