Getting 2022 Revenue Planning Right
If you’re getting a late start in your 2022 revenue planning season you’re not alone. Only 14% of B2B organizations say they have an aligned planning process, and only 55% of their plans are delivered before the year starts.
Let’s face it: Revenue planning is not an activity companies necessarily relish, and what’s keeping you behind your timeline may give you some insight into the obstacles to growth your revenue planning should aim to overcome.
A common obstacle is that people are so busy with the day-to-day tactics that drive revenue that it’s hard to start thinking about what lies ahead six months from now. It’s also hard to do what is necessary to assure your product team, your sales and marketing teams, and even the engineering teams, if required, are aligned and on the same page.
And then, you have to rely on corporate executives to affirm where they want to be at the end of 2022 and agree on how to get there. Many sales organizations and many boards of directors of public corporations have a quarter-by-quarter and most times a monthly mindset so it can be difficult to step out of that fray.
Another constraint is the lack of the essential tools necessary to gather and parse the pertinent information for analysis when it’s time to plan. It all comes down to timing as the biggest challenge, followed by ensuring there is ongoing collaboration to figure it all out.
A Practical Planning Approach
Over the years, MarketSource has used Forrester’s SiriusDecisions model for fiscal and revenue planning for our own company and for many of the sales organizations we manage for our clients. Regardless of the model you use, this practical wisdom will apply to your revenue planning.
The old adage, “Rome wasn’t built in a day” applies here. Give your organization plenty of advance time to put all of the elements together, make critical decisions, and execute on your plan. What are those elements? Here’s a breakdown that will help you get started.
Figure out your goals for the coming year. For instance, if you want to do $20 million in business, where do you go and what do you have to do to get that business? You need to address it with a go-to-market strategy, which should start with identifying your ideal customer profile and the five or six people in the buying group who decide on the services and products you sell.
Define your go-to-market architecture. Identify your target audience and map out the products you will sell to particular segments of the potential buyer landscape. You’ll need to build out a buyer’s journey map including the length of time it takes to close, and identify the people in your company who will help you execute strategic tactics along that journey. What are the key influencers along the journey, and what are buyers paying attention to along the way? Whitepapers? Associations? Marketing materials? Or are they relying on a subject matter expert (SME) or salesperson to guide them through to the sale?
Coordinate responsibilities. Once you’ve agreed on what you want to achieve in order to thrive, you will need buy-in from all departments, with a breakdown of who in your organization will execute on elements of your plan. Distinguish between the volume of marketing-based leads vs. sales-generated leads that will fill your sales funnel; and then attach the right people and departments, from marketing to sales to product, to perform particular selling motions, where and how they will generate demand.
Devise a sales structure. Your revenue plan should outline both your go-to-market and your route-to-market strategies. Analyze sales channels to decide where and how your prospects will buy from you in a cost-effective manner, whether through a direct or indirect channel. Then, make sure you have a sales structure in place to execute on your go-to-market and route-to-market strategies. Your structure should have sufficient coverage by either inside or outside salespeople (or both) to meet your sales goals.
You want to get the right sales talent with the right acumen. That could mean training your current team differently or hiring net new people, and it points to the necessity of being able to pivot. It also means you will have to plan for appropriate workspace, compensation, incentives, and benefits.
Know your ideal customer. Understanding your ideal customer profile is key, as it ties many elements of your revenue plan together. For instance, once you know your ideal customer, you will have a better view of how many sales roles you need to fill, and where, to cover the greatest number of accounts that fit your ICP.
It also determines your engagement process and the technology you will need to support that process in a cost-effective and efficient manner. It may help to sketch out how your customer prefers to buy, how and when they want to engage with you, the processes enabling engagements, and the technology to produce the results you want.
Align and execute. You’ll need a sales readiness plan in place that you can execute efficiently. Your sales and marketing teams must be thoroughly aligned on strategic and tactical initiatives. Research from Revenue Marketing Report 2021 shows that revenue growth is 70% more common among companies where sales and marketing cooperate effectively, with the best forms of alignment including executive buy-in, regular joint meetings, and shared KPIs. And your sales training program must align with the customers your reps are calling on—current customers vs. new customers—and with the products or services you are selling.
Be Prepared To Pivot
No one can yet predict what the new “normal” will be in B2B sales. It’s a moving target. But you can review the trends over the last four to six quarters to gain some insight into what will change and what will remain the same. Some studies indicate that by 2025, 80% of B2B sales will be digital. Yet, two years ago, it wasn’t uncommon to hop on an airplane with a few sales colleagues to see a customer. There will be a lot of guessing about the new normal. A couple of months ago, we were all excited about getting back to normal, but here we are with a different set of circumstances.
On a positive note, collaboration is easier because you can meet with your remote sales and executive leadership teams wherever they are, virtually. You may not be able to all stand up next to a whiteboard but there are ways around that, too.
Still, it’s critical to have flexibility embedded in your plan. In such an environment of global uncertainty, sales leaders must be prepared to pivot based upon the changing dynamics of selling. Now it seems like what goes on in any individual market is greatly affected by what is going on overall in the world.
Recognize that many things are out of your control. Manage uncertainty by having a plan B and even a plan C ready to roll when unforeseen circumstances require you to take a detour. Counteract potential planning constraints by investing in things that will make your business grow. Otherwise, your competitors can outrun you. And be hyper-diligent in spotting trends that could derail what you are doing and be ready with the foresight to expedite a response.
Remember that acquiring a new customer is 4x more expensive than getting net new revenue out of a current customer; about 75% of your revenue growth should come from current customers.
A recent McKinsey study put it this way: “Companies need to prepare their people for a future where new and evolving skills and ways of working are a given and where an embrace of continuous learning is the key to relevancy in the workplace. And leaders must do this while embarking on the broader organizational experiment of determining what the workplace even looks like in a post-COVID-19 world.”
Avoid These Common Revenue Planning Pitfalls
Probably the single biggest mistake made in revenue planning is doing it too late. It takes a while to get it all done, from your first round of strategic conceptualizing and number-crunching to getting a seal of approval from your executive team. Related to timing is collaboration. You need input and buy-in on goals and objectives from multiple departments and perhaps from external partners, and this takes time. If there is a lack of clarity and goal misalignment your plan may not be fully optimizable.
Another obstacle to adequate revenue planning revolves around your data quality. Having a view into recent, relevant customer data lays the foundation for an effective sales revenue plan. Most companies struggle to collect, retrieve and analyze data in a way that will bring expected results and they settle for doing the best they can with the data they have.
In a recent survey by AppDynamics, 75% of global IT professionals across major industries said their organization needs to connect full-stack observability to business outcomes within 12 months in order to remain competitive.
Strong sales organizations need horsepower behind their data collection capabilities and sometimes that calls for investment in external technological tools to avoid making a big mistake.
Invest For Better Performance
If your 2022 revenue plan consists of testing new markets or channels, opening underserved markets, or increasing market share in existing markets and with current customers, MarketSource offers viable solutions worth exploring. Maybe you have gaps in last year’s revenue plan, or new channels have emerged since last year; this is where we can provide you with the skilled talent and the proven processes driven by a purpose-built tech stack to get results in the next fiscal period.
We can stand up a sales team with supportive technology and sales processes that match your mission and strategy in a matter of weeks. There is no huge capital outlay, and our solutions are a variable cost to your sales organization. Many large B2B sales organizations have found this to be the smartest investment they have ever made in terms of revenue generation and sales results.
Want to know more? We’re here to help your B2B sales organization reach its top sales potential. LET’S TALK>>