Today, I want to share a real case where I suffered for a whole year, thanks to poorly done sales planning.
I imagine he can help you find some of your problems these days, as we closed the first quarter and I know a lot of people are already worried about the rest of the year.
If you’re part of this group, it’s worth taking a look at How to Fix the Damage to Your Sales Planning?
But let’s go to the problems I experienced a few years ago. I imagine you can recognize a few things!
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- A bad start
- The result: a very stressful year
a bad start
My challenge was already big. The company had very little really structured Inbound and Outbound. Problems piled up in a commercial area with zero predictability.
I spent 4 months testing for the full implementation of the processes, but the key wouldn’t turn up until January. We started the year, then, with the challenge of delivering results in the next 12 months.
The initial perspective was that the entire commercial team would adapt to the strategies and operations that I had directed.
The process started practically from scratch, the team needed to be trained for each step and, more than that, the communication needed to be clear and very aligned.
On paper, everything looked beautiful, but the problems started to appear:
As the processes didn’t run, I couldn’t measure consistency in generating results.
Doing sales planning with a completely new process is too complicated.
Starting a plan from scratch is not easy!
I needed to use the data from the tests I did to create a projection and present it to the team, but there was no guarantee of consistency yet.
Therefore, the chance of error was high. So the best step, if you want to make changes to your process, is to start at least three to four months before the start of the year, so you gain a minimal track record and can plan better.
In my case, for example, if everything went wrong, we would have a plan made for the whole year based on a process without validation… It would be pretty bad, wouldn’t it?
The ends are what direct the means
One of the biggest problems in any planning occurs when goals and objectives are set by people who don’t experience or understand the process well.
One way to reduce this is by giving the necessary resources for the team to achieve goals.
In my experience, I had a goal imposed due to expectations of 2 or 3 years without company growth.
Nobody wanted to know exactly how to get there, just relay the goal to the team. The worst: no one seemed to care if it was possible to get there with the structure we had at that time.
Clearly, it was a step-by-step billing process. The order came from above and all managers charged their teams, but without paving the way for advancement.
In invested companies, these situations are quite common, unfortunately. In the end, the team needed to roll to achieve some goals, it was necessary to cry a lot to get more investment for the team (in tools, new hires, etc) and many discussions to re-align expectations and justify unmet goals through numbers.
In startups, mainly, you can only earn money on the Lifetime Value (LTV) of a client. Therefore, the investment to acquire new customers takes time to recover.
Therefore, goals that are above your current structure are completely normal. The difference is that your planning includes leaving your cash flow negative for a few months until that investment is recouped.
In my case, the annual goal was impossible to beat. I had a minimum budget for day-to-day actions, only. If it worked, I could hire according to goals that weren’t even set.
The managers’ feeling was responsible for directing all the “re-investment” in the process. Feeling-based judgments motivate the growth of internal politics, which installed itself like a virus among the team.
Flattering the superior, spending a lot of time devising ways to sell insignificant results as if they were important, and other actions that no one would want to see in the company itself arise from this type of culture.
Having experienced the process for less than half a year, I had already realized that our sales cycle could not last almost 1 year.
Digging deeper, I realized that all the tools that gave us the business process metrics were completely dirty, full of phantom deals where the salesperson hadn’t interacted with the lead for over 6 months.
This type of situation hindered our results enormously.
And it wasn’t just the sales cycle. I got the average ticket only with the financial, but it was not possible to see the sale value, only the current monthly fee, with possible upgrades in the value over the LTV.
One more problem for my historical background and the definitions of where we could go. It was not enough to have only projections about the result of the new processes… I still didn’t know what the average ticket the company used to sell nor the cycle to close the contracts and start receiving them.
The result: a very stressful year
It was almost 365 days of a lot of pressure and intensity. The biggest problem in a situation like this is that the team ends up unmotivated at various times, because it works a lot, but realizes that it is impossible to achieve the expected results.
If it’s going to be a tense year, let it at least be the last!
In order to avoid the same problems for the following year, we worked on measuring the processes from the very beginning.
We wanted to have the best indicators and with as much transparency and assertiveness as possible to plan the following year with the lowest probability of error and also demonstrate the reality to all stakeholders.
All metrics helped to gain predictability. Something useless in relation to current planning, but useful as a reference for later years.
In short, I spent the whole year planning for the next year, because in fact we were already lost. In a worse situation, they could fire me, but the results of the year were positive.
As I said, the company had been without growth for 3-4 years and, for the first time, it put its foot on the accelerator and, despite all the difficulties, managed to increase its annual recurring revenue (ARR) by more than 30%.
Unfortunately, the team had a hard time, we lost some good talents along such a tortuous path, but the results, in the end, brought some relief and I was sure to leave behind a more consolidated structure and culture.
All discussions on target revisions were tense, demands on impossible values too, politicking intensified throughout the year… Even so, the final result was positive for what was built for the years ahead.