First of all, in order to prepare to have a great 2011, you need
to know what 'numbers' you need to hit! This will be a
revenue/profitability figure if you're a business owner, for
example. [Chck out Smarta's feature on setting
targets for your business for more help with this.]
You also need to work out your average order value (or average profit if you're targeted on profitability figures), and then work out how many orders you need to hit that target.
Don't be one of those people that says: "'I don't have an average order, my orders are all different!" Simply take your revenue/profit total from last year and divide by number of orders.
The next stage is to look at what your existing customers have
spent with you in 2010, and then work out what you think each
account will spend in 2011.
For most people, this will involve a certain amount of educated guesswork, however it's still an exercise worth doing as it will help you to understand how much business you think you can get from your exiting base next year.
Don't fall into the trap of being overly optimistic (or overly pessimistic) - and if you really have no idea what they will spend, use their 2010 spend figure if you're in a business that gets repeat business from their customers, rather than one-off purchases.
One you have your 'existing customer' figure, take that from your total revenue/profit needed and move onto the next step.
The figure you're now left with (total revenue/profit, minus
existing customer spend) is the figure you'll need to achieve in
2011 from 'new business'.
You've already worked out your average order value, so now it's time to work out your 'average new client value'. In order to get this figure, find out how much each 'new customer' in 2010 spend in total in the year. The figure should 'average out' - in other words you'll have some clients that spent a lot, and some that spent little - perhaps because they only came on board towards the end of the year for example.
This will now tell you how many new clients you need in 2011 to hit your targets. Again, I'm not expecting these figures to be perfectly correct - you can always adjust them to be more correct as you go along, but at least it gives you a 'base' to work from.
Now you've got all your overall numbers, now it's time to break
down those figures in terms of activity. You'll know the critical
numbers in your company of course, but the usual ones to look are
phone call to meetings, meetings to quotes, quotes to orders, etc
These figures will then enable you work out how much you need to do in order to hit the targets that you've set.
Once you've got these figures, you'll notice you start to feel a little more confident about hitting your targets for 2011. Now it's time for the next step.
The figures you've worked out above are based on purely hitting
the targets you've set. The next step is to stretch you a
Once you've got all your figures together for the above tips, work out those figures again - but this time for 120% of your target, 150% and 200% for example.
This will give you the figures (and the activity) required to hit those 120%, 150% and 200% figures (sales managers/directors normally love this part!)
Then I'd pick one of the 'stretch' targets to aim for (rather than just the 100% of target). Don't worry if it makes you feel a little uncomfortable - that's part of the process!
Now you've worked out how you're going to hit 100% or more of
the targets you've set (or you've been set), it now time to break
those figures down.
You now want to break those yearly figures into quarterly ones, monthly ones, weekly ones and even daily ones! This will enable you to see the revenue/profitability figures you need to be aiming for - and more importantly for the salesperson - the activity you need to be doing on a daily/weekly/monthly/quarterly basis, in order to hit (and exceed) the targets you've set.
If you've done the above steps properly, you'll now start to feel more confident about hitting the targets you've set, as breaking them down usually makes people feel like they're more achievable.
However, depending on your activity levels in 2010, you might
have given yourself a bit of a shock, in terms of how much activity
you'll need to do in 2011 to hit your new targets. But it's better
to know that now that find out half way through they year when
you've got less chance to do anything about it!
Once you've got these figures, it's time to move on to working out where you're going to get the business from - but that's another article!
Good luck with your sales for 2011, and if I can help you further, get in touch with me at www.andypreston.com.