Annual sales planning is particularly difficult for 2021. The key to arriving at an achievable annual goal for 2021 is to use third-party data to justify the outlook, and establish a solid sales planning process that gets buy-in from key stakeholders.
2020 has been a challenging year for a myriad of reasons. Sales leaders should make sure that they don’t make 2021 even worse by agreeing to an annual number they have no chance of achieving. The costs and consequences of a sales leader committing to an unrealistic annual quota are enormous to them, their sales teams, and the company: Reps end up with unachievable quota targets, so they leave. The sales leader consistently misses quarterly goals and is fired at the end of the year, leaving the company stuck looking for a replacement.
CEOs and investors will naturally try to push sales leaders to sign up for the most aggressive growth goals possible, as company valuations are based in large part on revenue growth rates. But just because a CEO wants a certain growth percentage doesn’t mean it can actually happen, even with flawless execution. To that end, our research shows that 48% to 79% of a company’s growth is due to overall market growth, whereas only 12% to 34% is due to competitiveness and efficiency. Sales leaders need to find that delicate balance between intentionally not understating what they believe that they can achieve (i.e., being a “sandbagger,” which ends up hurting a sales leader’s credibility) and being hopelessly optimistic in their prognostications (which can get them fired).
Let’s face it, forecasting the annual plan for any fiscal year is tricky business. For 2021, the impact of Covid-19 has made it doubly difficult. So, how do you as a sales leader arrive at an annual growth target that