In biz, we often do things just because we think we are supposed to.
But then something happens -like a global pandemic- that shakes us out of our repetition-rut, forces us to step back and ask: Why? Why are we doing this?
For example, why set sales goals?
You could argue: It’s ridiculous to try. There are no accurate, comparative sales from last year to benchmark against. Or, you could argue that the economy is picking up and business is increasing organically (so, if my sales are increasing, why bother setting goals?). You could argue that you are doing all you can to keep up with the chaos amid a frantic supply chain. Or, you could be pessimistic and suggest that sales growth is still questionable in an unpredictable market.
Yes, you could argue all of that but the only person you would be selling short is you.
The reason we set sales goals is for one purpose only: Focus.
This business is a nightmare of distractions. Out-of-stock issues. Production problems. Shipping disasters. Most days you show up to control the chaos. Which is why it’s more important than ever to stop and set your 2022 sales intention. Because if you don’t determine what’s most important, someone else will determine it for you (hello, flaming inbox and Slack).
This year, it’s not a question about whether we should set sales goals; the challenge is how.
Most of us won’t have a solid comparative sales history to work from. In normal years, you would look back at your previous year’s goals and use that as a baseline to set your sales growth expectations. But all previous activity is fubar’d. Either your clients are still climbing out of recession-like numbers, or something like PPE sales dramatically skews your comparisons.
But you can still determine the most important part of setting sales goals: potential.
The key to sales growth planning, whether coming out of a bullish economy or a collapsing economy, is granularity: drilling down into the characteristics of each client to discover opportunities.
You have all types of clients. Wonderful clients. Creative clients. Demanding clients. A book of business is rarely full of perfect clients. It’s a messy world. And we’re in an industry with mind-boggling variables and high-stress deadlines. Since the biz resembles a rodeo show, what often happens with your daily focus is that whoever is the loudest or the most difficult, or whoever’s deadline is near-impossible gets your attention most.
Where you put your attention matters in this game because where you put your focus (what you sow) is where you’ll earn (what you’ll reap).
I once had a big brand client, a marquee client, a very pretty star to have on the logo wall of our website, and it was a matter of pride that they chose us as their partner. The problem was: they knew they were shiny. They were demanding, expensive (excessive sample ordering), and loud. Every project seemed fraught with problems. And because they were “important” they demanded more meetings, requiring far more TLC. For six months, they consumed our resources (time, energy, money, sanity) until we reviewed their account and realized that their perpetual high-demand was costing us time with other, more profitable (and honestly, easier) clients. For every hour we spent on their account, we could have spent ½ the time and made twice as much on a far less demanding, far less lustrous client. Clients who would spend circles around them, respect our time and expertise, and restore our sanity.
That’s what I mean by focus. The wrong focus is an expensive lesson to learn.
Howard Marks, the investor, has a net worth of over $2.1 billion. A few months ago, Marks wrote, “one of the six tenets of [our] investment philosophy states flatly that we don’t base our investment decisions on macro forecasts … I can count on one hand the investors I know who successfully base their decisions on macro forecasts. The rest invest from the bottom up, one investment at a time ... mostly without reference to the macro outlook.”
Our sales planning strategy should mirror Marks’s philosophy, one investment (one client) at a time. It’s a granular approach (bottom-up) as opposed to a macro approach (top-down). You determine your 2022 sales growth by predicting each client’s potential and then you work your plan accordingly.
Not biggest or loudest clients, but who are the sleeper clients that, if you turned your attention toward them in 2022, would yield the biggest return?
Successful sales targets are set by exploring potential, not by guessing. A secret to setting and hitting sales targets is to unpack each client’s potential by asking questions about the gaps in their spending with you. Here are 10 steps to unpack opportunities with your top clients in 2022:
List your top 10 clients in declining order of YTD gross profit. (Gross sales tells you who you work for; gross profit shows you who is working for you).
Calculate the number of projects you billed in 2021 to determine your order average. Your order average reveals how much work and energy you are spending per client.
Set a baseline of annual sales for each client. For the majority of us, using 2020 as any kind of baseline is iffy. Even if you had a spectacular year, your numbers could be skewed because of PPE sales, so you likely won’t see that spike in 2022. Even YTD 2021 is an unreliable baseline because most of our clients are still climbing out of recession-like numbers. For many of us, 2019 was the last year we experienced a “normal” business rhythm, 2019 was pre-pandemic, pre-PPE. Consider comparing your 2022 goals against 2019 by setting your baseline from 2019.
Set industry potential: The Bureau of Labor Statistics (BLS) released a report featuring the fastest-growing jobs on the horizon. Job growth reflects growing industries. If your client is in the leisure and hospitality sector, you’re going to see growth as those sectors are rebuilding. The healthcare industry plans to add the most jobs of any sector as well as the tech industry. Residential construction and retail could slow in 2022. There are many more predictions, but the point is not to create a crystal ball, it’s simply to put each client in a bucket based on the anticipated increase in budgets or anticipated decrease so that you’ll know which clients to focus on most in 2022.
Set category potential: What categories are you not selling this client? PPAI creates an annual study featuring the largest product categories that customers buy. Let’s say you have a client that only buys awards from you but doesn’t turn to you for any of their apparel needs. For most clients, over 30% of their spend is apparel. If you are not doing apparel with a client, then you have a significant opportunity for growth. When I was a distributor, we specialized in stores. Often, we would get the complicated kitting projects or fulfillment projects, but none of that sweet rogue spending or drop ship (the “easy” sales). We made it our mission to go and capture more of that spend.
Set buyer potential: Which departments are you not selling to? You might be selling to marketing and procurement but you’re not selling to HR or to the C-Suite. You also could be serving a very large customer with multiple divisions, are there areas of their business you are not getting, and if so, how much opportunity exists for growth?
Purpose potential: Reviewing PPAI’s Sales Volume Study again, what business problems are not solving for your clients? You might be selling your customers business gifts (for client retention purposes) but you’re not selling them campaigns for new customer acquisition.
Proactive Selling Potential: What type of selling are you doing for this client? Are you merely order-taking or are you proactively selling clients based on your ideas and their objectives? Do you visit with your customer on a regular basis to talk about their upcoming calendar to determine potential selling opportunities? The #1 reason a client fires a distributor? Not enough new ideas. Are you reactive selling or proactive selling?
Trend Potential: What’s happening in culture that might open new buying opportunities. Last year it was kitting and PPE. This year, the HR world is reeling as more people are quitting and moving around than ever before, so, recruitment and retention are a ready-made opportunity to strategically sell. Are you selling toward cultural trends with your biggest clients?
Finally, reverse engineer sales per client. If client “A” did $100,000 with you last year, break that down by quarter, by month, and by week. Where do you see opportunities for growth in your monthly rhythm? Maybe they spend 80% of their sales with you in the Fall but you’re not selling to them in the Spring. Is there an opportunity in different seasons of the business?
Once you calculate your client’s potential, set an actual sales figure to aim at, most use a percentage based on estimated growth. In commonsku, setting a sales target is easily done per client in the set “sales target” field and it’s a target that follows you around as you work (keeping your goals and your progress ever in front of you).
Guessing is trying to figure out how many pennies are in the jar. Estimating is considering the source: determining why the pennies are there in the first place so that you can discover more than just the limited amount in front of you.
Once you determine which clients have the most potential, your wifi signal is always on for opportunities. And because you are attuned to who has potential, you’ll uncover sales as you go, despite your sales day being a daily rodeo show.
Haruki Murakami has sold books by the millions, so much so that the BBC wrote an article, “Haruki Murakami: How a Japanese writer conquered the world”. Murakami is not only a writer but a runner and a former small-business owner. In his book on running, he has a marvelous quote that applies to everyone in the sales game, Murakami writes:
“If I’m asked what the most important quality [for success is, next to talent] … that’s easy: Focus. Without that, you can’t accomplish anything of value ... if you can focus effectively, you’ll be able to compensate for an erratic talent or even a shortage of it.”
You are likely one of the most talented, helpful, creative, likable salespeople on the planet which is all the more reason to turn your amazing potential toward those who matter most.
Stay tuned for our next post where we’ll talk about how these per client goals roll up into your annual sales target (as a sales rep), plus your new business goals, and then, how these numbers roll up into team goals.