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Collaborate with Sales Leadership in Annual Planning

Learning Objectives

After this unit, you’ll be able to:

  • Describe how sales operations and sales leadership work together to build a metrics infrastructure.
  • Explain the best practices of annual planning.
  • Anticipate updating the annual plan throughout the year.
  • Anticipate churn.

This module was produced in collaboration with GreenFig, which owns, supports, and maintains the GreenFig products, services, and features described here. Use of GreenFig products, services, and features is governed by privacy policies and service agreements maintained by GreenFig.

Before You Start

Before you start this module, make sure you complete Sales Performance Strategies. The work you do here builds on the concepts and work you do in the previous module.

All the Things on Day 1

The first day of the year is important in sales operations. This is when you need to have all the planning, process, and technology in place to track any given activity. For example, if your organization wants to track and report on both calls made and emails sent by sales team members: 

  • First, fields for both “calls made” and “emails sent” need to exist in the customer relationship management (CRM) system or tracking system you’re using.
  • Next, these fields need to be consistently populated by manual entry or an automated process.

Setup can take a single day, or several weeks, depending on the size of your organization, the complexity of the metrics, and the volume of data.

In this unit, you learn about the strategy and technology involved in setting up these key performance indicators (KPIs) and how they are supported in annual planning.

Build Your Metrics Infrastructure

People at a table passing around reports

“If it’s not in the system, it didn’t happen”—a common sentiment from sales leaders. They rely on metrics to make sure their teams are performing throughout the year. If there’s anything amiss, they also rely on metrics, and the help of sales operations, to come up with the necessary adjustments to get their teams back on track. This is just a glimpse of why a metrics infrastructure is important.

Metrics Infrastructure. The collection of strategy, systems, system configurations, and processes needed to track performance. 

Building a metrics infrastructure requires a skilled sales operations professional (or team) and close collaboration with sales leadership. And it starts with prioritization.


What will let you know that the sales team has been successful?

What are the most important success metrics?

What needs to be in place to capture such information?

These questions and more are answered in planning meetings with sales leadership. The goal is to identify the set of KPIs needed, which are most important, and the processes needed to make sure that they’re captured properly. Revenue growth tends to be the most common, most important metric of all, but you see how other critical metrics build toward it below.

A simple example:

Sales leadership wants to capture the amount of targeted emails sent to customers—targeted emails have proven to be effective in generating leads and bringing reps closer to closing new business. Great! Your CRM allows you to send emails, automatically track them against leads, and report on them by sales rep. Very little setup is needed to track this data point since your current tool supports it well. On to the next one.

What about calls made? Things start to get complex here because you don’t have a telephony system integrated, but it’s still an important metric. First, you may need to set up a field in your system to track calls. Then, you need to set up an easy-to-follow process for reps. Since it’s a manual process, you might need to motivate reps to actually log calls, so a mid year contest to see who logs the most calls is warranted.

So on, and so on. Just two data points in and you can get a glimpse of the critical analysis and work is needed to build out your metrics infrastructure.

Think Long Term

While you’re prioritizing metrics, know that 1 year is not enough. Try 5 years, or even 10. When you think about goals and the success of the company, it’s important to think about it long term to get to the right strategy today.

Say you run operations at a startup that sells subscription software (that’s a lot of s’s!)—the number of new customers can be very important in the first few years. So you prioritize activities and metrics that favor acquiring new customers. 

But then, in the years that follow, it makes sense to transition into deepening the relationship with existing customers. So, starting today, you also need to set the company up for tracking activities that get existing customers to events and selling add-on services.

The plan is unique for every company, the company’s values, and how you collaborate with the sales team. And collaboration is the key.

Collaborate, Communicate, Win

A team in a meeting room

It pays for sales operations professionals to know the ins and outs of the plan and how technology fits. In many cases, sales leadership will already have a point of view of what metrics are needed. During the planning process, sales operations plays a prescriptive role—clearly communicating to sales what can be practically captured in a system, how long it will take to set up, and provide alternatives if a particular tool cannot capture a particular metric. 

Mind the Gaps

No matter how thorough you are in planning, something is bound to come up that you didn’t anticipate—a change in technology, a shift in industry best practices, a change in the company itself. This is OK. Even the best sales and sales operations teams need to make adjustments.

Here are some things to consider beyond annual planning.

Make steady adjustments. You learn in Sales Performance Strategies that the quarterly business review is a great time to review metrics and adjust any imbalance in targets and goals. It’s also a good time to call out gaps in the data, new developments (like recent upgrades to the CRM and the ability to integrate with your telephony system), and plans to improve the metrics infrastructure.

It’s never too late to get smarter. If new data points become available throughout the year, go ahead and add them to help you make the right decision. Just know data added later in the year most likely won’t paint the full picture of annual performance. It’s important to communicate any exceptions with your sales leaders as well.

Understand seasonality. Some businesses are seasonal or have fiscal quarters that don’t align with the calendar year. Imagine the sales for an ice cream company are represented by a line graph. Sales spike during the summer and peter out as fall and winter come, only to creep back up in the spring. Without the context of the seasons, it may seem that people buy ice cream in July and August for no reason. OK, this is a simplistic example, but seasonality exists in many industries and its impacts are less obvious than the connection between ice cream and warm weather. Think of a travel business that somewhat aligns with the academic school year and summer vacation.

Not all metrics are measures of success. It may seem counterintuitive to plan for losing business, but this is an important element of sales planning. This particular metric is called churn. It’s an estimate of how much money will be lost for reasons outside of a company’s control, like a customer returning unused product because they overestimated their need, or a partner unfortunately going out of business. Churn allows you to account for these events without unreasonably penalizing sales reps.

Plan for Churn

Why are we talking so much about churn all of a sudden? It’s one of the trickiest metrics to understand. Let’s break it down.

First, you give sales reps an allowance, or space to fail. For example, if a business has a churn allowance of 10%, a rep who reaches 90% of their quota will receive full credit as if they reached their number, because of this allowance. That’s not the end, however.

Next, you have to make up for the churn. So, if you plan on losing some existing business, you may also set a growth goal of 20% new business.

How Much Churn Is Okay?

Churn rates come up a lot in Software as a Service (SaaS) business more than in other industries due to the reliance on a subscription model. High churn can cancel out growth leading to a stagnant business.

5—7% annual churn is considered standard for SaaS companies, some organizations may even allow up to 10%. And it can be measured on a monthly, quarterly, or annual basis based on your planning.

Communicate with the Sales Team

OK, in the next unit, you learn about strategies for communicating the KPIs that you set with sales leadership during your annual planning sessions.


Article: Your Complete Guide to Starting the Fiscal Sales Year Fast

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