I once saw the late Zig Ziglar tell an audience that he could teach each person to beat the world’s top archer. He followed by saying all he’d need to do is line them all up, show them how to pull back the bow and aim at their targets. And then he would blindfold the Olympic champ. Zig’s point is well taken: Even a stellar performer can’t hit his target unless he knows where to aim.
In sales, most people are content with a squishy goal such as “I want my sales to be better than last year’s.” But everyone wants his numbers to be better than last year’s, and that isn’t a specific enough target. “Better” doesn’t allow you to build the plans to ensure that you grow your sales number or be certain that you succeeded.
Specifically, What’s Your Number?
To reach your sales goals, you have to start with a real and specific number. If you did $2 million in sales last year, would you be satisfied with sales of $2,000,004? Of course not. But the lack of a truly specific goal and the plan for achieving it are why so many businesses’ sales teams produce the same totals year after year. They don’t have real goals, so they don’t make real plans.
Start by taking off the blindfold and choosing a real revenue goal for 2015. Be specific. Using our previous example for this exercise, we’ll choose a goal of $2.3 million, a 15 percent increase in sales. This is a number we can work with. It allows us to build a real plan. But we still need a few more numbers.
Backing into the Math
I’ll continue starting at $2 million in my example, but you can use your actual numbers when building your plan. There are many other questions to answer.
First, where did your revenue come from last year? How many customers/clients did it take for you to achieve your sales number? For my example, I will assume that my $2 million was generated by billing 200 clients over the course of the year. These two numbers give us our next number, the average “spend”—when you divide your revenue by the number of customers. In my example, that’s $10,000. Now we have what we need to start deciding how we bridge the $300,000 gap between 2014 and 2015 sales. For my example, I need 30 new customers. Or do I?
Selling More to Existing Customers
Before you decide to pursue new clients (something you will absolutely do as part of your plan), you need to look at the customers you already have.
It takes time to develop new clients. You have to market and gain their attention. You might have to prospect and schedule appointments. It takes time to work through the sales process, and you may have to negotiate contracts. You don’t have to do these things to sell more to your existing customers. They already know you, and they trust you. You might already have a contract in place.
Which of your customers also buy from your competitors? What will you need to do to capture the share of their spend that you haven’t yet captured? How do you earn the right to that business?
For my example, I found that 20 of my 200 customers should be spending an annual average of $5,000 more with me. That’s $100,000 of my $300,000 goal if I develop that business.
How are you going to sell more to these clients? What contacts within your existing clientele do you need to meet with in order to increase your sales? What new value can you bring so you can capture the currently missing part of their spend?
Adding New Customers
Increasing sales almost always means acquiring new customers. This is where a good portion of work needs to occur in your planning.
I still need to land 20 new clients spending $10,000 each. Here is where things get tricky for most sales teams and where they make bad assumptions. The easy math says I need to acquire about two new customers per month to reach my goal. But this is true only if those two new clients spend the whole $10,000 with me in the month in which I acquire their business. We need one more number. We need to know the dollar value of our average sale.
I will assume my average sale is $2,000. This means I need about 8.3 sales per month from new clients ($16,600 in new client business per month and $199,200 for the year). The chart above can help you visualize.
The way to ensure you achieve your 2015 sales goals is to build the action plan to acquire these new customers/clients. The mix of activities will vary from one company to the next, and answering these questions can help you build your action plan.
How much will you need to spend on marketing? Where will you advertise?
What percentage of your opportunities do you close? How many opportunities do you need to create to win the number of new clients you need?
How many appointments do you need to set with prospective new clients to generate those opportunities?
Doing this math allows you to plan your weeks and days so you take the actions crucial for achieving your sales goals.
Good intentions and foggy goals aren’t enough to ensure you achieve your number in 2015. Start by setting a specific goal and determining the actions necessary to reach that goal. With your plan in hand, you are ready to do the real work of executing and making your goals reality. Welcome to 2015! Make it your best sales year ever!