Key Considerations for Annual Sales Planning

Updated: Oct 7, 2020

As the end of the year approaches, companies start to think about their sales plans.

Many organisations forecast simply by adding a desired growth percentage to the previous year’s sales. While this may be adequate in some cases, it often fails to consider specific changes and insight which could significantly impact your forecast accuracy.

Great sales planning relies on both historic and current data, as well as customer and market insight. As a minimum, we recommend starting with accurate sales data from the current and last full year, although three-to-five years’ data is better. Use the data to uncover patterns, trends and anomalies, then explore whether these are likely to be repeated and to what degree.

You can increase your forecast accuracy by detailing your figures at both customer and product level. Note, the accuracy of your understanding will largely mirror the level of relationship you have with your customers. If you operate purely on a transactional basis, it is likely you will have less insight upon which to base your forecasts.

Image by Mohamed Hassan from Pixabay

Having strong rapport with your customers enables you to gain greater insight at a number of levels:

  • What are the customer’s plans and key targets?

  • What are their needs?

  • Where do you and your products fit?

  • What are their thoughts and expectations for their market in the coming year?

If you already have this information, that’s brilliant. But don’t worry if you don’t as all is not lost. Building strong rapport with customers gives you a platform to engage them in conversations that can inform your sales plan. It is very powerful to openly declare your genuine interest in hearing your customer’s views, stating you want to understand how you can help them fulfil their needs and achieve their targets. Start by focusing on the key customers that drive your profit and work down your list.

Not only will this help to improve your forecasting, but it will also make the customer feel more valued, help you to provide a better service to them and strengthen your relationship.

As a further bonus, gaining deeper understanding of key customers’ needs can also inform new product design and marketing strategies.

Having developed a greater understanding of your market, consider other factors that could influence your forecast. These include opportunities or risks which may emerge in the coming year (and what you can do to manage them), or if you, or anyone else in your market, might be releasing any new products or services that could impact your figures.

Sales forecasts should be clear enough to guide the actions and resources required to deliver them. Breaking sales plans down to quarters or months can greatly improve your planning; for example, it can guide the resource required to deliver the plan at different stages of the year. Such information can also be shared with other departments, e.g. purchasing, manufacturing and warehousing, enabling them to plan their resources effectively too.

Actively reviewing your sales forecast on a rolling quarterly basis also helps to improve your forecasting accuracy. This provides critical feedback to update your numbers based on any new insight you've gained, and you will also learn to become better at the process of forecasting.

Performance Management Systems offers Sales Planning facilitation workshops to guide you through this process. Only you can bring your data, knowledge and insight, but we will help you turn this into a customer-focused sales plan which can also inform the staff structure and profile that will be required to deliver it.

Given that the highest possible level of knowledge and insight will enable you to create the strongest forecast, we would always encourage your Sales team to be part of the planning process; this will also increase their ownership of the final plan that they will be required to deliver.

Please contact me via if you would like to discuss this further.

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