What is sales planning?

It begins with sales leaders establishing and defining long-term business goals. Once those goals have been set, the next step is to figure out how to achieve those sales goals by establishing a detailed sales strategy.

These steps can include establishing revenue goals, identifying target markets, setting quotas, evaluating consumer buying trends and marketing dynamics, and continually collecting data to optimize the sales plan over the lifetime of the business plan.

A sales plan can help a business determine its marketing strategy and build stronger customer relationships, resulting in better conversion rates and new customers. Businesses of today are using the power of AI and automation to gain an in-depth understanding of target customers, optimize key performance indicators (KPIs), increase lead generation and drive new revenue.

Sales planning plays a fundamental role in the strategic direction and operational success of a business. By outlining clear sales objectives and defining the strategies to achieve them, sales planning helps organizations navigate ever-changing market dynamics and capitalize on growth opportunities.

• Alignment with business strategy: Sales planning can help make sure that sales activities align with the organization's overall strategic objectives. This alignment ensures that the sales function contributes to the broader business strategy, fostering a cohesive approach to growth and long-term success.

• Forecasting and goal setting: With a plan, a sales team can forecast future sales at both the individual and organizational levels. Accurate sales forecasts enable businesses to set realistic goals, allocate resources effectively and plan for contingencies. This helps in optimizing revenue projections and setting sales targets that are ambitious yet achievable.

• Effective resource allocation: Through sales planning, businesses can target their investments in personnel, marketing or technology to yield maximum returns. With more accurate forecasting and metrics, resources can be better allocated.

• Risk mitigation and adaptability: A well-executed sales plan allows organizations to anticipate market shifts, identify potential risks and develop contingency plans. This proactive approach to risk management bolsters resilience, ensuring that sales performance remains robust amidst unpredictable market conditions.

• Team motivation: When a sales team has clear objectives and an effective sales plan, it fosters team motivation and alignment. With a roadmap, team members have purpose, are encouraged to engage, and are guided in a unified direction. Sales planning empowers organizations to tailor offerings, target audiences and home in on demographics. This way the organizations gain a competitive edge in the marketplace.

Approaches to sales planning can vary depending on the organization, market dynamics and business objectives. Sales planning can be categorized into several types, each serving distinct purposes and addressing specific needs:

A long-range sales plan is a strategic document outlining the organization's sales goals, strategies and priorities over an extended period, typically three to five years. It serves as a roadmap for future growth, considering market trends, competitive landscape and resource allocation.

Long-range plans emphasize big-picture thinking and set the foundation for more tactical annual or quarterly plans. They often involve extensive market research and scenario planning, and they require input from various departments, including sales, marketing and executive leadership.

The annual sales plan translates long-range objectives into specific, measurable targets for the upcoming year. It builds on the foundation laid by the long-range plan, incorporating insights from the previous year's performance and current market conditions.

Annual plans typically include detailed sales quotas, strategies for target markets and resource allocation. They also outline KPIs to monitor progress and ensure alignment with overall business objectives.

A territory sales plan focuses on optimizing sales efforts within specific geographic regions or markets. It involves dividing the sales territory into manageable segments, assigning sales representatives and setting targets for each area.

Territory plans consider factors like market size, competition and customer potential to maximize resource utilization and drive growth. They often include strategies for lead generation, account penetration and customer retention within each territory.

An account sales plan, also known as an account strategy, is a detailed blueprint for managing and growing relationships with high-value customers or strategic accounts. It outlines specific actions and resources, and it provides timelines to nurture these relationships, address account-specific needs and drive revenue growth.

Account plans can involve dedicated sales teams, specialized resources or tailored product offerings. They frequently incorporate customer insights, historical data and future growth projections to guide targeted, account-focused sales efforts.

The sales planning process varies depending on the industry and the organization; however, there are key stepsthat most are going to generally follow. 

Gather insights about an organization’s target market, competitors, customer segments and industry trends. A way to gather those insights is to build the plan by using customer relationship management (CRM) software. This strategy helps put all sales data in one place and be updated in real-time, giving the entire sales operation visibility into any changes that could put the set targets at risk.

In this first step, it’s also important to analyze customer demographics, preferences and pain points. Identify gaps in the market that a business can fill with its products or services through CRMs and other sales tools.

Establish clear, measurable sales objectives that align with the business's overall goals. They should also consider factors like revenue growth, market share and customer acquisition targets.

Ensure that the sales objectives are SMART (specific, measurable, achievable, relevant and time-bound).

Decide on the metrics and KPIs that the business would find the most value. The typical metrics that a business might use are return on investment (ROI), social media traffic, conversion rates and gross profit margin. A dashboard should be set up to track these metrics and streamline data into one accessible place.

Perform a SWOT (strengths, weaknesses, opportunities and threats) analysis to evaluate internal strengths and weaknesses, as well as external opportunities and threats. This assessment can help capitalize on advantages and mitigate potential risks.

Separately, they should want to understand the sales reps’ capacity. In other words, how much can they reasonably sell in the upcoming year? In this step, it’s typically important to calculate capacity by looking at performance metrics, the previous year’s profitability and the number of salespeople on the team.

Define one ideal customer profile, or more, and target market segments that are based on the business’s market research and SWOT analysis. Then, determine the characteristics and needs of the most valuable customers, as this information is going to inform sales strategies and messaging.

An organization should also involve stakeholders with a vested interest in the business to ensure that all interested parties are involved in setting goals and aligned on the sales approach. This strategy might include sales managers, marketing teams and product developers.

Outline sales strategies and tactics to achieve objectives. This strategy can include:

• Product positioning and messaging

• Pricing strategies

• Distribution channels

• Promotional campaigns

• Lead generation and nurturing techniques

• Sales process and methodology

Assign specific sales quotas and targets to the sales team or individual team members. They can ensure that these targets are realistic, based on historical performance, market conditions, company goals and available resources.

Determine the necessary human, financial and technological resources required to execute the sales plan. Balance investments in personnel, marketing and technology to maximize returns.

Compile all the information gathered in the previous steps into a comprehensive sales plan document. This document should include:

• Executive summary

• Sales objectives

• Target market segments

• Sales strategies and tactics

• Resource allocation

• Sales metrics and KPIs

• Timeline and milestones

Roll out the sales plan to the team, providing training and support as needed. This step helps everyone understand their roles, responsibilities and expectations. They are then going to communicate the sales plan's objectives, strategies and expected outcomes across the organization to ensure that all parties are on the same page.

Track progress regularly against the established sales metrics and KPIs. Conduct periodic reviews to assess performance, identify areas for improvement and make necessary adjustments to the business’s sales plan, especially when new products come to market.

Conduct a thorough review of the sales plan's outcomes at the end of the planning period. The organization is going to typically identify successes, failures and lessons learned to refine its approach in future planning cycles. Incorporate these insights into the long-term sales strategy and planning process.

Generally speaking, sales planning should originate from experienced sales leaders and draw from detailed data analysis. However, the following tactics can help a business reach a successful sales strategy that aligns with the business's needs.

Ensure that sales objectives are aligned with the overall business strategy. This alignment helps to ensure that sales efforts contribute to the broader organizational goals and foster a cohesive approach to growth.

Use data-driven insights from various sources, such as historical sales performance, market research and customer behavior analysis. These insights inform strategic decision-making and enable the creation of effective sales strategies.

Set clear, measurable sales objectives and use KPIs to track progress. This clarity ensures that everyone understands their responsibilities, driving accountability and focus. If the business is looking to expand into new markets or expand product offerings in the coming year, sales targets might need to be adjusted accordingly.

Consider market volatility and changing customer needs. A successful sales plan incorporates contingency plans and the ability to quickly pivot strategies as needed, ensuring that the sales plan remains relevant and effective in a dynamic market environment. A sales planning template can be tailored to specific customer personas and profiles as needs and goals change over time.

Reshape the sales planning process with artificial intelligence. AI is giving businesses real-time visualization of sales targets and AI-infused predictive forecasting to automate resource allocation and territory planning. Give businesses an opportunity to gain an in-depth understanding of their target customers, which might lead to higher customer retention and new revenue.

1. Collaboration across departments: Successful sales planning involves close collaboration between sales, marketing and other relevant departments. This interdepartmental cooperation ensures that sales strategies align with marketing efforts, product development and customer service initiatives, creating a unified front that addresses customer needs effectively.

2. Customer-centric approach: Prioritize understanding the target customers by conducting thorough market research, segmenting the customer base and personalizing sales strategies based on customer profiles and preferences. A customer-centric approach fosters deeper engagement and stronger relationships, increasing the likelihood of repeat business and positive word-of-mouth referrals.

3. Regular performance monitoring and reviews: Implement a system for regularly tracking sales performance against established KPIs and objectives. Conduct periodic reviews to identify areas for improvement, make necessary adjustments to the sales plan and ensure that business strategies remain effective and relevant in a changing market landscape.

4. Investment in sales training and development: A sales plan requires an investment in sales team training and development. Providing ongoing coaching, skill-building workshops and access to industry resources empowers the team to stay updated on best practices, hone their sales techniques and adapt to evolving customer needs.

Industrial and Commercial Bank of China (ICBC), the world’s largest bank in terms of assets and market capitalization, acquired 100% of the Argentinian assets of the former Standard Bank Group. After this acquisition, they needed a new planning software to manage the bank’s assets.

Under the advisement of IBM Business Partner KMG Analytics, the bank adopted IBM Planning Analytics as a planning software solution. The new software automated and streamlined ICBC Argentina’s financial planning, budgeting and reporting processes with AI-infused capabilities.

The switch ultimately saved the bank valuable time and resources. For example, the process for developing “what if” financial planning scenarios was reduced from two days to a matter of seconds.