Let’s face it—companies periodically miss their sales targets.
Sometimes, companies miss their targets for “macro” or environmental reasons—like a shift in the marketplace that fundamentally reduces customer demand, or a new competitor that unexpectedly enters the market. These macro events, while uncommon, are difficult to predict and are the hardest to adjust to quickly.
In many cases, companies miss targets for execution or managerial reasons—like when the sales team underperforms due to insufficient training, or a top account churns unexpectedly due to customer satisfaction issues. Strong sales leaders should tackle these issues head-on, get their team the proper training and marketing materials they need, and address the customer concerns quickly and effectively.
Other times, companies miss their targets simply because their sales plan wasn’t realistic in the first place. Or it could be because no one bothered to track performance to plan throughout the year and make adjustments as real-time events happened. These are the worst reasons to miss sales targets because they are the most controllable and the most avoidable.
So, how do sales leaders get better at planning and monitoring? With data and analysis.
First, understanding the fundamentals of sales planning is critical. Second, you need the right tools.
Using a sales resource planning solution—instead of spreadsheets or a homegrown solution—makes it easier to analyze historical sales data for more accurate plan inputs.
For example, data-driven sales planning solutions empower organizations to pinpoint ramp-up time more accurately—that is, the amount of time required for reps to achieve full productivity. If you’re relying on guesswork to determine ramp, you could be paying a steep price.
Consider what may happen if you’re simply applying a ramp-up time of six months across the board, but the actual ramp-up time is closer to nine months. The outcome will be that you may not have enough reps on board to hit targets, which means your team is really set up for failure.
Likewise, if you use data to more accurately model quota achievement, determine expected attrition, and identify the ideal timing for hiring new reps, you’ve improved the power and value of your sales plan.
The more realistic your plan variables are to start with, the more useful they are to benchmark against throughout the year. Using an automated planning solution increases accuracy and reduces risk for your most important plan. It also makes it easy to monitor plan variables throughout the year and make real-time adjustments to the business.
By applying historical performance data, you can ensure that you’re hiring the right sales role at the right time and have enough capacity to meet market opportunity. Your team needs to be able to set and customize hiring profiles across territories to identify the resources you need. This way, you can easily compare contribution margin on ramped versus in-ramped reps.
Hit your mark with sales capacity planning
It’s important to understand exactly how to use your sales performance data effectively. With a little data and a bit more analysis, organizations can build better plans and hit targets more often. Determining the right types of resources you need to achieve your goals is the key to meeting them.