I’ve been asked to deliver a short presentation on sales plans to the Schaumburg Entrepreneurs Group in April (more details to follow)- so I’d like to use this opportunity to touch on some more of the “nuances” that come into play when working with sales plans.

In preparation for writing this post, as well as my upcoming presentation, I took a quick look at some of the free resources found on the first page of Google search results for “sales plan.” Based on what I see from the first three U.S.-based organic search results, we need to start by defining “sales plan”. It’s perfectly understandable that there are multiple definitions, and certainly each has their merit. However, for our purposes a sales plan is defined as “a strategic document unequivocally linked to the business plan that outlines: addressable market(s), sales organization, compensation, channel to market, etc…”

Many of the sales plans found online, in my opinion, are more of “sales forecasts.” They focus on the coming fiscal year and outline not only the targets, but (most importantly) how to get there. These are absolutely critical for YoY gains and achieving shorter-term targets, but are not the strategic documents I’m looking to discuss here.

Another item I found missing from each plan that I’d like to discuss in more detail here, is compensation. Sales is not like any other department in an organization, and their incentive plan cannot simply be lumped into an overall HR budget. Again, their incentive plan is directly linked to the business plan – I discussed this a bit in a previous post, but let’s take a closer look.

In many ways, salespeople are some of the simplest creatures in the world – show them how to make money and get out of their way. The problem is, it is critical to ensure that you as a business owner are incentivizing the correct behaviors. Let’s look at a few scenarios:

• You have multiple product/service offerings, perhaps for different market segments or different markets entirely, each with different overall margins
• You have a ‘door opener’ offering (also known in the retail world as a ‘loss-leader’)
• Like most businesses it is easier to keep and expand within an existing customer than it is to acquire a new customer

Hopefully you can see how your incentive plan would have an impact (positive or negative) in each of the scenarios above. Now, let’s take a closer look at the third scenario. A friend of mine just told me about a new contact management app he is developing. It sounds really cool (and I wish him all the best!). In his case, growing the user base is far more important in the early stages than how much any one user is using the app. Can you see how this would impact sales incentive plans? If not, or to learn about how to put this information into action, please contact Chicago Sales Strategies for an initial discussion!

Rick Struzynski

Rick is the founder and CEO of Choose Growth – a sales management consulting firm dedicated to helping SMB’s achieve or exceed their growth expectations by increasing revenue, margins and reducing cost of sales – simultaneously. This contradicts most business books out there, but we have the data to support the success of our methods.

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