Sales Strategy And Budgets

Something I find amazing is that a lot of gases and welding companies do a very bad job of creating a sales strategy, and so the budgeting process—always tricky—is even more difficult. Well, before hair-tearing time begins, I want to give you a few things to think about.

First, to do a good job of budgeting, you need to have a good strategy. To put together a good strategy, you need to begin by answering a few questions:

• What do you want to sell? (What are the focus products or services for the year?)
• To whom do you want to sell? (What are the target customers/prospects?)
• What does a good order look like? (Define the kinds of opportunities you want your salespeople to go after.)
• Who are the competitors you want to go after? (Who are you trying to compete with?)
• How will you win business? (What is your competitive advantage against them?)

Make sure that the management team is in agreement. If you agree on these issues, you have the basis of a strategy.

Next, be clear on how you intend to grow. Remember the format in Chart 1.

Put together a chart that shows how your sales will look next year using this format. By doing this, you have now presented the sales emphasis in a couple of key areas:

1. The amount of time that needs to be spent on existing versus new customers.
2. The amount of time that needs to be spent on existing versus new products.

Once you have constructed this chart for your organization as a whole, you should break it down further and create a chart for each of your salespeople. (The charts should add to your total, by the way.)

The third part of sales budgeting that will connect what you want with each salesperson is the Focus Account Matrix. Remember that you want to put together a list of each existing and prospective account, by salesperson—along with a list of the focus products. The goal here is to understand the following:

1. How much business did you get?
2. How much is there to get?
3. How much do we think you can get (this year)?

In the example presented in Chart 2, look at the box that contains Focus Product A and Customer B. We sold “$0” last year. There is “$10,000” of potential, and the salesperson thinks they can get “$5,000” in sales.

Knowing how much you sold should be easy. Getting the salesperson to accurately understand the potential is the most difficult part, and putting together the plan to get the additional business requires some effort, too. But the advantages are easy to see. Instead of using generic numbers, you are both customer- and product-specific.

If you go through this exercise, you not only have a really good sales budget, but also a tool that drives sales behaviors throughout the year. Be advised that the first year will be like pulling teeth, but if you stick with it, it will make everyone's job a lot easier as you go forward.