Every year around the holidays I am often asked, “How do you plan for the new year?” “How do you intend to identify new accounts and decide what market segments to pursue?” “How do you develop your strategy and what will your underlying tactics be to ensure you hit your goals in the upcoming year?” These are great questions that require time and attention, but when? For those of you who are new to working in the IT professional services industry, you’re probably now learning that business slow downs during the holidays. For you veterans out there this is nothing new to you. With new sales order activity coming to a halt and active orders stalling, what is one to do with all this down time? How about build a recession-proof sales plan for 2009? From my experience in selling IT staffing and consulting, I always found that a strong Q1 always set the tone for the remainder of the year. The activity and foundation you lay down in Q1 sets the table for the rest of the year. Here are my thoughts on developing your strategic sales plan and underlying tactics that support that plan.
First, a few thoughts on developing your high-level sales strategy
Developing Your Sales Strategy
Here are a couple of thoughts to consider when devising your sales strategy.
- Chances are whatever you are thinking of doing your competitors are too. Think out of the box. Try something new, go in a new direction.
- Most IT staffing companies try to be all things to everyone. They often lack the discipline to “walk away” from a potential sales order.
- Pick a market segment or niche to pursue and commit to it. Don’t stray away because you need to build your niche and your brand within that niche.
- Make sure sales and delivery (recruiting) are aligned. You are only as good as your delivery team. Everyone needs to buy into the strategy.
- What needs exist in the marketplace that are going unmet? Figure out how you can meet them.
- Have you interviewed your current customers recently to understand what they like about you and your service offering? Do you understand how your consultants are impacting their business?
- Get your customer’s input; you will be surprised with what they have to offer.
- Build a case study library (from your client interviews). This will help you build your brand in your niche and sell more effectively.
- Don’t just understand what type of people (skills/titles) CIO’s are looking to hire in 2009 and what technologies they intend on deploying, find out why. This will help you move up the customer value chain.
- Read business and personal finance magazines such as Kiplinger’s, Money, Fortune, and Forbes. These magazines are loaded every month with advice from the world’s best investment and portfolio managers. They will open your eyes to industries and prospective accounts you have never thought of and provide you with the insight to devise specific strategy for selling into each company they recommend.
- Cross-Sell into new areas within your existing accounts. Chances are, even with your best accounts (unless it’s a very small company) you only have 75% market share in that account. Work to increase your footprint.
Developing Your Tactical Sales Plan
A very common exercise (and one that I love) in the field of sales is that of “backing-in” to your number. What this means is, understanding exactly what and how much activity is required of you to hit your goal. For example, your manager may tell you that your budget or quota for the year is to generate $1M in Gross Profit. As an example, let’s breakdown exactly what we will have to do to generate $1M in Gross Profit in 2009. And for you’re your own purposes, if you email me at email@example.com. I can send you my excel spreadsheet that will do the calculations for your own personal goals.
I’m going to use arbitrary numbers to simplify this exercise but you can simply plug in your own numbers for your personal situation.
Average Bill Rate $120.00/HR (all straight pay)
Average GP% 35%
Avg. Wkly GP or Spread (per consultant) $1680.00 (based on 40/hrs)
Average contract 4 months/680 hours per contract
Total GP Per Sale $28,560 ($1680 x 17 weeks)
# of starts needed 35 (35 x 28,560=$1M)
For every 6 prospects you qualify and/or meet with you get 1 REAL job order
60 day lag between initial contact with prospect and initial sales order
4 week sales cycle (review resume/interview/decision making/hiring process)
Required Sales Activity To Meet Goal
We now know that we need 35 starts for the year to reach our goal of $1M in Gross Profit. And because we fill or close 35% of all sales orders, we will need to need to identify or generate 100 orders. Because we generate 1 order out of every 6 prospects we qualify, talk with and/or meet with we will need to qualify and add 600 qualified prospects to our CRM system in order to generate 100 sales orders. In order to get 4 months of billing out of all 35 consultants before the end of 2009, they will all need to be working by September 1, 2009. This means we will need to have identified and added all 100 sales opportunities to our sales funnel by the end of July. This also means that we will need to have 600 qualified prospects added to our database (CRM system) by June to account for the 60-day lag between initial introductions with prospective customers and their first order. What does this all mean and how does it impact me personally?
Broken Down Into Actual Sales Calls….
To add 600 qualified prospects to our CRM system by June and 100 qualified sales orders by July we will need to have 5 really good, quality conversations with new prospects every day. Qualifying 5 new prospects per day gives us 25 new prospects added to our CRM system each week and 600 by June which meets our goal. Lastly, how many phone calls do we have to make to reach one qualified prospect? For this exercise I am going to use 25. For every 25 prospecting calls made, we have a conversation with one qualified prospect that will give us a legitimate shot at earning their business. That means we will need to make 125 phone calls per day in order to add 5 new prospects to our CRM system each day and 625 calls per week to add 25 new prospects each week.