8 Step Process for Strategic Planning

Dec 13, 2023

In this blog post, we will explore an eight-step process for building a successful sales plan. We will discuss the importance of setting the right sales goals, using data to determine goals, and outlining specific steps to create a comprehensive plan. Let's dive in!

TL;DR: In Step 8 of your strategic process, it is important to execute the plan without frequent modifications and rebuilds. Making adjustments on a quarterly basis is necessary to keep the strategy aligned with performance and data analysis, allowing for agility and adaptability. Consistently evaluating the plan's outcomes enables identification of areas for improvement or redirection.

Step 1: Identify Operational and Sales Performance Metrics

When it comes to evaluating the success and efficiency of your business operations and sales efforts, it is crucial to identify and measure key performance metrics. This will not only allow you to track your progress but also help you make informed decisions for growth and improvement.

Operational Metrics:

In order to understand the financial aspects of your business operations, it is important to identify and measure key operational metrics. This includes:

  • Pay Rate: This metric helps you measure the average amount of money you pay per hour or per project to your employees, contractors, or freelancers.
  • Bill Rate: This metric determines the average amount of money you charge your clients for the products or services you provide.
  • Gross Margin: This metric calculates the percentage of revenue that is left after deducting the cost of goods sold. It helps you understand the profitability of your business.

Sales Performance Metrics:

Understanding your sales performance is crucial for identifying areas of improvement and determining the effectiveness of your sales efforts. Some key sales performance metrics to consider include:

  • Conversion Rates for Meetings: This metric measures the percentage of meetings that result in a successful sales interaction, such as closing a deal or advancing the sales process.
  • Conversion Rates for Proposals: This metric evaluates the percentage of proposals that result in a sale. It helps you understand the effectiveness of your proposal creation and presentation.
  • Conversion Rates for Clients: This metric measures the percentage of potential clients who become paying customers. It indicates the success of your overall sales efforts.

By analyzing these operational and sales performance metrics, you can gain valuable insights into the strengths and weaknesses of your business. This information can then be used to identify areas for improvement and implement strategies to drive optimal performance.

Step 2: Build an Annual Sales Plan and Forecast Financial Performance

Building an annual sales plan and accurately forecasting financial performance are crucial steps for the growth and success of any business. These tasks help in setting achievable targets, identifying potential risks, and making informed decisions to drive revenue growth.

1. Build an annual sales plan in the fourth quarter.

Creating an effective annual sales plan involves evaluating the previous year's performance, understanding market trends, and setting realistic sales goals. Start by analyzing sales data and identifying areas of improvement. Consider market research, customer feedback, and competitor analysis to gather insights on market demand, customer preferences, and industry trends.

Outline key strategies and tactics to reach your sales targets. Define target markets, customer segments, and channels for reaching customers. Set objectives for revenue growth, customer acquisition, profitability, and market share. Allocate resources effectively, including budgets, sales force, marketing initiatives, and technology infrastructure.

Collaborate with the sales team to gain their insights and ensure alignment with their goals and challenges. Provide them with the necessary training and resources to execute the sales plan effectively. Monitor progress regularly and make adjustments as needed to stay on track.

2. Forecast year-end financial performance.

Accurately forecasting year-end financial performance is essential for assessing the overall health and sustainability of your business. It helps in evaluating the effectiveness of your sales plan and making data-driven decisions for the future.

Consider historical sales data, market trends, seasonality, and external factors that may impact your business. Identify key financial metrics to track, such as revenue, gross margin, operating expenses, and cash flow. Use forecasting models and tools to project future performance based on historical data and assumptions about market conditions.

Regularly review and update your financial forecast throughout the year to incorporate any changes in the business environment. This will allow you to identify potential risks and take proactive measures to mitigate them. Monitor actual performance against the forecast and analyze any variations to learn and improve your planning and forecasting process.

By building an annual sales plan and forecasting financial performance, you can set clear objectives, align your resources, and make informed decisions to drive your business towards growth and success.

Step 3: Determine Annualized Run Rate for Growth Assessment

Once you have collected the necessary data, the next step in assessing growth or decline is to determine the annualized run rate. The annualized run rate is a measure used to estimate the future performance of a business based on its current performance.

To calculate the annualized run rate, you need to consider the revenue or sales generated over a specific period of time. This could be a month, a quarter, or any other defined period. Let's say you have the sales data for the last three months.

First, calculate the average sales for the given period by adding up the sales for each month and dividing it by the number of months. Next, multiply this average by the number of periods in a year. For example, if you have quarterly data, multiply the average by four, since there are four quarters in a year.

By calculating the annualized run rate, you can get a better understanding of the company's growth potential or decline. It provides a snapshot of how the business is performing over the specified time period and allows you to make more informed decisions.

Keep in mind that the annualized run rate is just an estimate and should be used in conjunction with other factors when assessing growth or decline. It is a useful tool, but it shouldn't be the sole basis for decision-making.

Step 4: Determine Headcount and Clients Needed for Growth Goals

In order to achieve your growth goals, it is crucial to determine the headcount and number of clients needed. This step requires a strategic analysis of your current resources and future targets.

Firstly, evaluate your current workforce and assess their capabilities. Consider the skills, expertise, and productivity levels of your employees. Determine whether any additional training or hiring is necessary to meet your growth objectives. By assessing the strengths and weaknesses of your team, you can identify the areas where you need to add or develop talent.

Furthermore, analyze your current client base. Examine the number of clients you currently serve, their average spending, and their potential for future growth. Identify the types of clients you want to attract and determine the number needed to reach your growth targets.

Next, consider the sales and marketing efforts required to acquire new clients. Evaluate your current strategies and determine if they are effective in attracting clients. Identify any gaps or areas for improvement that need to be addressed in your sales and marketing plans.

Finally, develop a concrete plan of action based on your analysis. List the specific number of new clients and headcount required to achieve your growth goals. Create a timeline and assign responsibilities to ensure that your action plan is implemented effectively and efficiently.

By determining the headcount and clients needed for your growth goals, you can develop a targeted strategy to accelerate your business's expansion and success.

Step 5: Build the Sales Plan and Set Quarterly Benchmarks

Building a comprehensive sales plan is crucial for the success of any business. It allows you to outline clear objectives, strategies, and actions to achieve your sales targets. To create an effective sales plan, it is important to utilize performance metrics that provide insights into your team's performance and market trends.

Performance metrics help you understand where your sales team stands in terms of meeting targets, closing deals, and generating revenue. By analyzing these metrics, such as conversion rates, average deal size, and customer acquisition cost, you can identify areas of improvement and develop strategies to overcome any challenges.

Once you have gathered the necessary data, it is time to set quarterly benchmarks for both headcount and clients. These benchmarks serve as milestones to measure your progress and ensure that your sales team is on track. Headcount benchmarks help you determine if you have the right number of sales representatives to achieve your targets, while client benchmarks evaluate your growth in acquiring new customers.

Remember to set challenging, yet attainable, benchmarks that align with your overall sales goals. Regularly monitor your progress and make adjustments as needed to stay on course.

  • Use performance metrics to analyze your sales team's performance.
  • Identify areas of improvement and develop strategies to address them.
  • Set quarterly benchmarks for headcount and clients.
  • Monitor progress and make adjustments to stay on track.

Building a sales plan and setting quarterly benchmarks will enable you to measure your team's progress, stay focused on your goals, and ultimately drive revenue growth for your business.

Step 6: Use Sales Performance Data to Determine Activities and Acquired Clients

Once you have set your sales goals, it is essential to analyze your sales performance data to determine the number of activities, meetings, proposals, and acquired clients needed to achieve those goals. This step is crucial in understanding the effort required to reach your targets and ensuring that your sales team is on track.

Using sales performance data allows you to assess the effectiveness of your past sales efforts and identify patterns or trends that can guide your future strategy. By analyzing the data, you can gain valuable insights into which activities yield the best results and where your team should focus its efforts.

Start by reviewing your sales activities over a specific period. This can include the number of calls made, emails sent, meetings scheduled, and proposals presented. Take note of the conversion rates at each stage, as this will help you determine how many activities are required to generate a certain number of acquired clients.

Additionally, consider using a CRM system to track and measure your sales performance. It can provide you with valuable data on lead sources, conversion rates, and revenue generated. This information can help you identify areas for improvement and optimize your sales process.

By using sales performance data to determine the necessary activities and acquired clients, you can ensure that your sales team is focused on the right priorities and maximize your chances of reaching your sales goals.

Step 7: Plan Specific Activities and Track Progress

When it comes to achieving goals, planning specific activities and tracking progress is crucial. Without a clear plan in place, it can be difficult to stay on track and measure success. In this step, we will explore the importance of planning specific activities and how to effectively track progress along the way.

Plan Specific Activities

Planning specific activities helps to break down larger goals into manageable tasks. This allows you to focus on one step at a time, making it easier to stay organized and maintain momentum. Creating a detailed action plan can also help to ensure that all necessary resources and deadlines are accounted for.

Track Progress

Tracking progress is essential for evaluating the effectiveness of your activities and making adjustments as needed. There are several methods you can use to track progress, such as setting benchmarks, using project management software, or simply keeping a detailed log. By monitoring your progress, you can gain insights into what's working well and what areas may need improvement.

Sharing successful campaigns and teaching others about them is also an important aspect of this step. By sharing your experiences and lessons learned, you can help inspire and guide others in their own journeys. This can be done through blog posts, social media updates, or even hosting workshops or webinars.

In conclusion, planning specific activities and tracking progress are essential for achieving goals. By breaking down tasks and monitoring progress, you can stay organized and make informed decisions along the way. Additionally, sharing successful campaigns can contribute to the growth and development of others. So, take the time to plan, track, and share your progress!

Step 8: Execute the Plan and Make Adjustments

Executing the plan and making adjustments are crucial steps in any strategic process. In this stage, you need to focus on implementing the plan without constantly changing or rebuilding it. This will provide consistency and allow for accurate evaluation and analysis of its effectiveness.

Once the plan is in motion, it is essential to make adjustments quarterly based on performance and data analysis. This ensures that the strategy remains agile and adaptable to changing market trends and customer needs. By regularly reviewing the plan's outcomes, you can identify areas that require improvement or redirection.

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