True Gap identified and conquered
What is your true gap?
Is your team optimistic about your goals? Most salespeople see a growth goal for the year and decide quickly if they can reach their goals or not. If they are optimistic, they feel they can and have no idea how. If they are pessimistic, they feel they can’t and they also have no idea how, or why. Most do not strategically analyze their goals and determine the actions they need to take.
Let’s put it into a formula:
2019 actual revenue – 2020 goal = a gap in revenue
$10 ml in 2019 - $10.5 ml 2020 goal = $.5 ml gap in revenue
But that isn’t the true gap. The True Gap™ is larger. The True Gap™ uses an analysis of one-time orders, and revenue challenges based on the salesperson’s knowledge of their business. What won’t repeat from last year?
2019 actual revenue – 2019 non reoccurring revenue – 2020 goal = True Gap™
$10 ml in 2019 - $1 ml on reoccurring revenue - $.5 ml 2020 growth goal = $1.5 ml True Gap™
This sounds simple enough. We need to plan on finding an additional $1.5 ml in revenue, yet there is more. What is your close rate? If it’s 25%, then you need to identify an additional $6 ml in revenue potential. Wait, there is more. If it’s an ongoing sale that is producing revenue monthly, when you close the business is a factor. As an example:
$1.5 ml annual opportunity at $150k per month closed March 1st produces the full amount.
$1.5 ml annual opportunity at $150k per month closed in August produces $750k or half of the expected annual revenue.
I recently worked with a client who is a market share leader. They have a strong product and solution offering and a smart, hard working group of salespeople. Most of their salespeople are account managers and focused on their current customer base. They are not hunting new customers and aren’t skilled at it. The company expectations were to grow at twice the expected market growth. How are they going to do it?
We took them through this process, and they identified targeted prospects, and expansion opportunities within their current customer base. The confidence in their ability to reach the growth targets improved greatly. The sales team has a plan to hit the growth numbers and the leadership team has something to manage to.
Account managers may not have an aptitude to hunt, but if you share a process with them, they can act on that process and successfully find new prospects.