What is sales planning? (steps, tips & more)

What is Sales Planning?

Sales planning is a strategic process that outlines how a company will achieve its sales goals. It involves setting targets, developing strategies, and outlining the steps needed to achieve those targets. A well-defined sales plan acts as a roadmap for the sales team, guiding their activities and ensuring they are aligned with the overall business objectives.

It’s an ongoing process that helps you to plan, manage, and control your sales strategy. This includes assessing your sales performance, identifying areas for improvement, and setting clear targets to work towards. While a “sales plan” is a document outlining your goals and activities, sales planning is the continuous, iterative process of creating, executing, and refining that plan.

At its core, sales planning offers:

• Strategic Alignment: It ensures all sales activities are aligned with broader business objectives, making sure every effort contributes to achieving company-wide goals.
• Roadmap for Sales Teams: It provides a clear path for sales teams to follow, detailing what needs to be done, how, when, and by whom. This clarity boosts team efficiency and focus.
• Resource Allocation: Sales planning helps determine how to best allocate limited resources—time, budget, and personnel—to maximize sales results and avoid waste.
• Continuous Process: It’s not a one-time event, but an ongoing cycle that requires regular review and adjustments to stay on track and adapt to market changes.

Sales Planning vs. Business Planning

While often intertwined, sales planning and business planning serve distinct purposes within an organization. Think of business planning as the overarching strategy for your entire company, while sales planning is a specialized component focused specifically on revenue generation.

• Business Planning: This is a comprehensive strategy that outlines the overall vision, mission, and long-term objectives for an entire company. It encompasses all departments—marketing, finance, operations, HR, and sales—and addresses factors like market position, competitive analysis, organizational structure, and financial projections. A business plan provides the high-level direction and framework.
• Sales Planning: Operating within the parameters set by the business plan, sales planning zeroes in on how the sales department will contribute to the company’s financial goals. It details sales targets, strategies for customer acquisition and retention, sales territory management, team structure, and specific tactics to achieve revenue objectives. It’s the actionable blueprint for the sales team, directly translating business goals into sales activities.

In essence, a robust business plan dictates “what” the company aims to achieve, and sales planning outlines “how” the sales team will specifically contribute to that achievement.

Importance of Sales Planning

Sales planning is more than just an administrative task; it’s a critical driver of success for any sales-driven organization. It empowers your team with a clear vision and actionable intelligence, enabling them to navigate the market effectively and achieve consistent growth.

Specifically, robust sales planning helps your team:

• Know Target Audiences and Market Entry Strategy: By thoroughly researching your market, you gain deep insights into who your ideal customers are, their needs, and how best to approach them. This ensures your sales efforts are targeted and effective.
• Anticipate Obstacles and Prepare for Them: Proactive planning allows you to foresee potential challenges—whether market shifts, competitive pressures, or internal resource constraints—and develop contingency plans. This minimizes disruptions and keeps your team agile.
• Understand Responsibilities and Resources: Clear sales planning defines roles, responsibilities, and the tools and support each team member needs to excel. This eliminates ambiguity and empowers your team to perform at their best.
• Stay Organized and Focused: With a well-defined sales plan, your team remains focused on what matters most, continuously working towards their sales targets and shared organizational goals. This disciplined approach prevents distractions and maximizes productivity.
• Adjust Strategies and Tactics: The market is constantly evolving. Sales planning provides the framework to regularly review your approach, analyze performance, and adapt your sales strategies and tactics based on real-time changes.

Companies with structured sales planning are 33% more likely to hit their revenue targets. Moreover, the benefits of strategic sales planning extend across the entire organization:

• Increased Sales: A well-executed sales plan significantly boosts sales performance and overall revenue. By optimizing processes and focusing efforts, you create a more efficient sales engine.
• Improved Alignment: It ensures all sales activities are perfectly aligned with the overall business strategy, maximizing efficiency and effectiveness across departments.
• Enhanced Accountability: By clearly defining roles, responsibilities, and expectations, sales planning fosters a culture of accountability within the sales team, driving individual and collective performance.
• Better Decision Making: Sales planning provides data-driven insights that inform better decision-making, not just within sales, but also for marketing, product development, and executive leadership.
• Increased Profitability: By optimizing sales processes, improving efficiency, and making informed resource allocation decisions, effective sales planning directly contributes to enhanced profitability.

Types of Sales Planning

Sales planning isn’t a one-size-fits-all endeavor. Different organizational structures, market dynamics, and business objectives call for varying approaches. Understanding the primary types of sales planning can help you choose the best fit for your team and ensure your sales strategy is effective.

Top-Down Sales Planning

In top-down sales planning, the process begins at the highest levels of the organization. Senior executives or sales leadership determine overall revenue targets and strategic sales goals based on market analysis, historical performance, and company objectives. These high-level goals are then broken down and assigned to regional sales managers, who further distribute them to their respective sales teams and individual reps. This approach ensures strong alignment with corporate objectives and simplifies the communication of targets.

Bottom-Up Sales Planning

Conversely, bottom-up sales planning starts with the individual sales contributors. Each sales rep or team develops their sales targets and forecasts based on their specific accounts, territories, and understanding of market potential. These individual plans are then rolled up to sales managers, who consolidate and refine them before presenting them to senior leadership. This method often leads to more realistic and achievable sales quotas, as they are built on direct market knowledge and the capabilities of the frontline team.

Hybrid Sales Planning

The hybrid approach seeks to leverage the strengths of both top-down and bottom-up planning while mitigating their weaknesses. Leadership provides overarching strategic goals, setting a general direction and expected revenue ranges. Simultaneously, individual sales teams or reps contribute their ground-level insights, market intelligence, and capacity assessments. Through iterative discussions and adjustments, a final sales plan is forged that balances strategic ambition with operational feasibility. This collaborative approach fosters greater buy-in and leads to more accurate and robust sales plans. Most mature organizations find success combining both approaches.

Steps to Create a Sales Plan

Developing a comprehensive sales plan involves several key steps. By systematically working through each stage, you ensure your sales strategy is well-researched, realistic, and actionable. Here’s a detailed guide to building your sales plan:

Step 1: Conduct Market Analysis

Before setting any targets, you need to deeply understand your playing field. This involves a thorough market analysis that includes evaluating your business’s strengths and weaknesses (internal factors) and identifying opportunities and threats in the market and industry (external factors). This is often framed as a SWOT analysis. Consider customer demographics, preferences, buying behaviors, competitive landscape, market trends, industry regulations, and technological advancements. A thorough market analysis is the starting point. This research will inform your overall sales strategy and target audience definition.

Step 2: Set SMART Sales Objectives

With a clear understanding of your market, define specific, measurable, achievable, relevant, and time-bound (SMART) sales objectives. These objectives should translate directly into how much revenue your sales team needs to hit within a specific timeframe. Look at your previous year’s performance to set realistic sales targets for your company and each department or division.

Step 3: Develop Sales Strategy

This is where you outline the specific tactics and approaches to reach your defined sales goals. Your sales strategy should detail how you will approach customers, what message you want to convey, and how you will deliver those messages. Consider your lead generation methods, sales pitches, customer engagement processes, and the tools and resources necessary for your sales team to excel.

Step 4: Allocate Resources and Budget

Effective sales planning requires a clear understanding of your financial investment. Coordinate with your team to determine how much money needs to be spent and strategize how it can be used effectively. This includes budgeting for personnel (salaries, commissions), training, marketing support, and essential sales tools and technologies. Budgeting ensures you allocate investment wisely to maximize your efforts.

Step 5: Map Territory Assignments

For many sales organizations, defining sales territories is crucial. This step involves segmenting your market geographically, by industry, or by account type, and assigning these segments to specific sales reps or teams. Well-defined territories ensure equitable workload distribution, minimize internal competition, and provide clear ownership, allowing reps to build deeper relationships with their assigned accounts.

Step 6: Build Sales Quotas

Sales quotas are specific performance targets assigned to individual sales reps or teams, designed to motivate and measure their contribution to the overall sales plan. Building realistic sales quotas involves analyzing historical performance, market potential within assigned territories, and the individual capabilities of your sales force. It’s a balance between challenging your team and setting achievable goals. Revenue Grid’s sales QBR capabilities can assist in setting and tracking these quotas effectively.

Step 7: Align Compensation Model

Your sales compensation model should directly support and incentivize the behaviors outlined in your sales plan. This step involves designing commission structures, bonuses, and other incentives that motivate reps to achieve their quotas and contribute to strategic goals. Alignment ensures that what reps are paid for is precisely what the business needs them to do, fostering a motivated and results-driven sales team.

Step 8: Define Measurement Metrics and KPIs

Metrics are essential for tracking the outcome of your sales plan. Ensure you have a clear understanding of what each metric means so you can make data-driven decisions. Key sales metrics often include revenue per month, number of closed deals, qualified leads, average order value, sales cycle length, and customer acquisition cost (CAC). These KPIs help you monitor progress and identify areas for adjustment.

Step 9: Review and Adapt Plan

Sales planning is not static. Regularly reviewing your sales plan is critical to its success. Establish a cadence for performance monitoring—monthly, quarterly, or annually—to track progress against your defined KPIs. Gather feedback from the sales team and analyze market trends. Be prepared to adapt your sales strategy and tactics based on performance data and changing market conditions. This continuous feedback loop ensures your plan remains relevant and effective.

Collaborative Roles in Sales Planning

Effective sales planning is a team sport, not a solo act. While sales leaders steer the ship, input and collaboration from various departments are essential for creating a comprehensive, realistic, and successful sales plan that truly drives revenue. Here’s how different functions contribute:

Sales Managers

Sales managers are on the front lines, possessing invaluable insights into their teams’ capabilities, individual rep performance, and direct customer feedback. They contribute by providing bottom-up forecasts, identifying training needs, defining sales territories, and ensuring their teams understand and execute the sales strategy. Their role is pivotal in translating the strategic sales plan into actionable daily activities.

Marketing Teams

Marketing plays a crucial role in sales planning by defining target markets, generating qualified leads, and developing compelling messaging and collateral that supports the sales process. Their insights into market trends, customer acquisition channels, and brand positioning are vital for creating a cohesive sales and marketing strategy that attracts and nurtures prospects.

Finance

The finance department provides the budgetary constraints and financial targets that underpin the entire sales plan. They help allocate resources, analyze the cost-effectiveness of various sales initiatives, and ensure that sales goals align with overall financial health and profitability objectives. Their analytical rigor helps validate the financial viability of the sales strategy.

People Operations

People Operations (HR) supports sales planning by ensuring the sales team has the right talent, skills, and motivation. This includes recruitment, onboarding, performance management, and developing competitive compensation and incentive structures that align with the sales plan. They also play a role in fostering a positive sales culture and managing employee engagement.

Revenue Operations (RevOps)

A modern sales organization increasingly relies on Revenue Operations (RevOps) to streamline and optimize the entire revenue engine. RevOps plays a critical role in sales planning by providing the technological infrastructure, data analytics, and process optimization necessary for effective execution. They ensure data integrity, manage sales tech stacks, provide performance insights, and facilitate seamless handoffs between sales, marketing, and customer success, making the sales plan more efficient and measurable.

Leadership

Executive leadership provides the overarching vision and strategic direction for the company, which sales planning must align with. They approve the final sales plan, allocate necessary resources, and champion the sales initiatives across the organization. Their commitment ensures that sales planning remains a top priority and integrates seamlessly with broader business objectives.

Sales Planning Tips

To truly excel in sales planning, it’s not just about following steps; it’s about embracing best practices that empower your team and drive superior results. Here are some expert tips to refine your sales planning process:

• Base Your Sales Planning on In-depth Research: Never underestimate the power of knowledge. Conduct thorough research about your target audience, competitors, and the industry you’re working in. This will help you determine the most effective marketing strategies, whether to focus on social media ads or email campaigns, and what type of messaging resonates best with your target demographic. It’s highly recommended that you use revenue intelligence platforms like Revenue Grid to capture data from all sources. This allows you to see a complete picture of your business situations and market in one dashboard without switching back and forth between many tools. No more data silos. No more missed opportunities.
• Look at Historical Performance: Your past holds valuable clues for your future. Analyze historical data to understand sales trends, product performance, and seasonal variations. How much has each product/service sold, and when did it sell? Track and analyze historical data over time to identify trends that indicate what might happen in the future. This historical context is crucial for setting realistic sales goals and understanding where your team truly excels.

Take Your Time to Do Planning: In the rush to hit the ground running, it’s easy to shortchange the planning phase. However, a rushed sales plan often leads to missed opportunities and ineffective strategies. Take the time to ensure you’ve completed all the steps correctly. A thorough, well-thought-out plan, even if it takes a bit longer to develop, will be far more effective and save you significant time and effort in the long run.

Sales Planning and Forecasting

Sales planning and sales forecasting are two sides of the same coin, inextricably linked in the pursuit of predictable revenue. While sales planning sets the strategic direction and outlines the actions needed to achieve sales goals, sales forecasting uses data and analytics to predict future sales outcomes based on current trends and historical performance.

Integrating sales forecasting into your sales planning process provides critical insights:

• Realistic Goal Setting: Forecasting helps validate if your sales plan’s objectives are achievable. By projecting future sales, you can adjust targets to be more ambitious yet realistic.
• Resource Optimization: Accurate sales forecasting tools allow you to allocate resources more efficiently. If forecasts indicate a surge in demand, you can preemptively scale up resources; if a downturn is expected, you can adjust.
• Proactive Risk Management: Forecasts highlight potential gaps or risks in your sales pipeline, allowing you to implement corrective measures within your sales plan before they impact your revenue significantly.
• Performance Monitoring: Regular forecasting sessions help you continuously monitor your sales plan’s effectiveness. You can compare actual sales against forecasted sales to identify deviations and understand the underlying reasons.

Leveraging a revenue intelligence platform like Revenue Grid means your sales planning is constantly informed by real-time, accurate sales data. This integration allows for adaptive planning, where your sales strategy can pivot quickly based on the most up-to-date projections, ensuring your team is always working with the most relevant information to close deals.

Unlock Predictable Revenue with Revenue Grid

A robust sales plan is the foundation for predictable revenue growth, but its true power is unleashed when supported by advanced revenue intelligence. Revenue Grid provides the comprehensive platform sales leaders need to not only build effective sales plans but also to execute, monitor, and optimize them with unparalleled precision.

Our platform integrates seamlessly with Salesforce, offering features like automated activity capture, advanced sales forecasting, and real-time alerts. This means your sales plan is always informed by accurate data, your team is guided by actionable insights, and you can identify deal risks and opportunities faster than ever before.

Ready to transform your sales planning from a static document into a dynamic, revenue-driving engine? Discover how Revenue Grid empowers your sales operations with the intelligence and automation needed to achieve predictable revenue and accelerate growth.

Book a demo today and see how we can help you build an intelligent, data-driven sales plan that works.

Frequently Asked Questions

What is the difference between sales planning and business planning? 

Sales planning focuses specifically on defining sales targets and outlining the strategies and actions to achieve those revenue goals. Business planning, on the other hand, is a broader, company-wide strategy that encompasses all aspects of the organization, including overall vision, mission, financial health, marketing, operations, and human resources, with sales being one component of this larger framework. 

What are the main types of sales planning? 

The main types of sales planning include:

• Top-Down Planning: Goals are set by senior leadership and then cascaded down to sales teams.
• Bottom-Up Planning: Individual sales reps or teams propose targets based on their market insights, which are then aggregated and refined.
• Hybrid Planning: Combines elements of both, with strategic direction from leadership and detailed input from frontline teams, fostering a balanced and collaborative approach.

Who should be involved in the sales planning process? 

Effective sales planning requires collaboration across multiple departments. Key stakeholders include sales managers (for team insights and execution), marketing teams (for market analysis and lead generation strategies), finance (for budget allocation and financial targets), people operations (for talent management and compensation), Revenue Operations (RevOps) (for data, tools, and process optimization), and executive leadership (for strategic direction and overall approval).

How do I set realistic sales quotas? 

Setting realistic sales quotas involves a data-driven approach. Analyze historical sales data, assess market conditions and potential within specific territories, and consider the capacity and experience levels of individual sales reps. It’s crucial to balance challenging your team with setting achievable goals to maintain motivation and ensure the sales plan remains credible.

Why is sales forecasting important in sales planning? 

Sales forecasting is vital for sales planning as it provides data-backed predictions of future sales outcomes. This helps in setting realistic goals, optimizing resource allocation, proactively managing potential risks in the pipeline, and continuously monitoring the effectiveness of your sales strategy. Accurate forecasts enable adaptive planning, allowing you to make timely adjustments to your sales plan based on real-time market conditions. 

How can technology improve sales planning? 

Technology significantly enhances sales planning by providing tools for data capture, analysis, and automation. CRM systems centralize customer data, while revenue intelligence platforms offer advanced analytics, sales forecasting capabilities, and real-time insights. Sales enablement tools provide necessary resources, and automation streamlines administrative tasks, allowing sales teams to focus more on strategic activities and customer engagement. 

What are best practices for reviewing and adapting a sales plan? 

Best practices for reviewing and adapting a sales plan include:

• Establishing regular, consistent review cycles (e.g., weekly, monthly, quarterly).
• Conducting comprehensive performance analysis against defined KPIs.
• Gathering direct feedback from the sales team on market conditions and challenges.
• Analyzing market trends and competitive shifts.
• Being flexible and willing to pivot the sales strategy as needed based on data and new insights.
• Ensuring clear communication of any changes to the entire sales organization.