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| Home - Industry Article - Oct 04 Issue |
Are You Bowling With a Banana? |
By Jim Watson, General Partner, CMEA Ventures, and By Tate Holt, Author, Prescriptions for Growth
An effective sales and channel management plan is difficult to develop for a couple of frequently-overlooked reasons. Given the fact that all plans stem from certain assumptions, the first challenge is to make sure that the baseline assumptions are objective and reasonable. The second reason -- and even more important -- the planning process is so difficult is that all of the factors are hopelessly interrelated. If any part of your plan is absent, isolated, or disintegrated, the performance of your sales and channel won’t be predictable. Have you ever thrown a bowling ball with a dent in it? Chunkity, chunck, chunck -- gutter ball. An effective plan, however, has the power, panache, and pleasure of a strike.
Bowling can be summarized in ten words; “Aim. Roll the ball and knock down all the pins.” Ten words for creating a plan might be, “Communicate how you deliver your product benefits to your customers.” Of course, neither is as simple to do as they are to say and both are infinitely more frustrating. Why is such a simple thing so difficult? Because any minor error in either pursuit will magnify itself. Let’s take a look at a couple of little things that can derail your planning efforts.
Assumptions are the banana peels of life...
One of the most common planning mistakes is mismatching territory and quota assignments; two independent factors that are inextricably linked. Let’s face it: defining territories can be a brutal and tedious task, one that is easily put off to another day -- or, better still, another person -- and, as a result is often grandfathered among very basic plan assumptions. Why? Partially, because it’s hard to do correctly. It’s time consuming, and it can be somewhat arbitrary. Like a bowling ball with a dent in it, this particular problem is guaranteed to have a negative ripple effect on the rest of the plan.
Assigning quotas is a similarly sinister process and shares many of the same burdens. Of all of the assumptions made during annual sales and channel management planning process, quota is the ‘baseline’ figure that is most often assumed. Maybe this is because we feel we have to start the plan with at least one ‘constant’. It could be because we all think in terms of ‘standard’ industry measurements or that we naturally want to do a little better than our toughest competitor. Whatever the logic, the quota figure rarely gets approached from the bottom up.
Compounding the error, most of the software companies we see start their planning processes by assuming that the existing territories are correct, viable, or fair, and start the ball rolling by plugging in a presumed quota figure. Unfortunately, this is very much like picking up and starting to launch a bowling ball without first making sure you’re on the right lane. If you’re not careful, you might hit some poor guy down the aisle bringing back a couple of beers for his buddies.
You might consider reversing the sequence in which you do these two planning tasks. Establish your sales productivity target first, and then define the territories. Ask yourself the following questions:
1. Given the activities required by your sales cycle, what can a reasonably proficient salesperson do over the course of a year?
2. Given your product realities, how many prospective customers are within their reach?
Remember your second planning obstacle; that all of the parts interact with each other. Let’s illustrate this point by using the simple example above. OK, you’ve figured out what productivity you expect from one of your people and have associated a territory with it. What happens if you double the size of the territory or have a superstar performer assigned to it?
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