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November 2, 2021

10 Steps to Sales GTM Planning

Fullcast

The Fullcast team

This article outlines a 10-step process for annual sales GTM planning. When approaching the process, it’s essential that you think customer-first by being mindful of how your plan will impact both internal and external customers. Some guiding principles for implementing the process below are: 

Align customer needs with selling expertise and skill sets.

Maintain account relationships for long-term customer success.

Minimize disruption to existing account relationships.

Ensure the integrity of AE territory assignments.


Overview: 10 Steps to Sales GTM Planning

  1. Define and Review Ideal Customer Profile (ICP) 
  2. Size the Market
  3. Confirm Targets
  4. Determine Capacity Needs
  5. Define Roles
  6. Carve Segments
  7. Assign Resources
  8. Commit the Plan
  9. Define Run Time Policies
  10. Define Processes for Change



  1. Define and Review Ideal Customer Profile (ICP)

As your offerings evolve and market trends emerge, your ICP will continue to shift. So, each year, taking up the ICP definition exercise in earnest and with a critical lens can help you see your market with fresh eyes. 


Start by looking at the segmentation model from the current year and reflect on how well you addressed it. By doing this you may find, for example, that you had more traction with a particular industry or company size, leading you to prioritize that segment when defining your ICP for the coming year. As part of this exercise, pay attention to other metrics that give insight into best fit ICP, such as closed won, account status, lead volume, account score, and pipeline. Insights from these metrics can provide an additional dimension to your ICP. 


  1. Size the Market

Data is key here. You’ll likely start with your CRM data. But you shouldn’t stop there. For one, the data in your CRM is probably mostly stale. Additionally, your GTM plan should include accounts that haven’t yet entered your CRM. Enriching your CRM data with third-party data sources is a must - the key is to choose sources that align with your segmentation This may mean, for example, that you use specialized regional or industry data in addition to more general corporate data, such as DNB. Once you have a detailed view of the market data, you can use a TAM/SAM/SOM calculation and analysis of competitive market penetration.


  1. Confirm Targets

Sales teams typically receive a top-down goal from finance or revenue leadership. Once you receive that number, validate it by conducting a thorough bottom-up feedback process. This can take time, depending on your tooling, but it gives transparency into targets and ensures that they feel attainable. This builds trust with the team in the field and also gives leadership insight that they would otherwise have no way of getting. 


Once an overall financial target is agreed upon, confirm the breakdown at each level:  company-wide, for each VP, Manager, AE, etc. At this point, your team can suggest adjustments based on seasonality and any margins for adjustment. Finally, while quotas are the prevailing sales team target, supporting metrics unique to each role can provide meaningful indicators of progress and help the team members ensure they’re tracking toward their goal. 


  1. Determine Capacity Needs

You need people to meet your targets. Understanding your capacity needs doesn’t simply mean dividing your revenue target by average attainment per rep and using that number to decide how many reps you need. Rather, conducting scenario planning allows you to identify optimal capacity: when, where, and what roles to hire. During scenario planning, factoring in top-down and bottom-up feedback can help you validate ramp profiles so that you’re hiring not just the right number of people but also at the right time


Another key consideration is planning for attrition. You may need to identify roles “to be replaced” or “to be hired” or current team members to be promoted. Build an ROI model to track investment in headcount so that you can be prepared to justify your plan if any conflicts arise.  

  1. Define Roles

As your sales team grows, roles shift and specialize to best support the business. When defining roles for a new year, you’ll want to look at the roles you previously had, identify roles to add or deprecate, as well as opportunities for support and overlay resources. For example, perhaps you’re at a growth stage where it makes sense to create a pre-sales engineer role. You’ll want to create this role and determine how to delineate responsibilities and properly equip your enablement team to support it. Finally, consider workforce design, i.e. the optimal pairing of roles and how and when they should be involved in a sales process. 


  1. Carve Segments

Methods for segmentation vary according to your company’s growth stage and the size of your market and sales team. When segmenting, start by assessing how the business is currently owned by your sales resources. Look at the segmentation you currently have as well as your lead assignment method. For example, you may be using round robin, territory based, pool based , or manager discretion. Assess what the risks and benefits of this strategy are - for example: one benefit of a simple round robin is efficiency and simplicity in the assignment process. However, a drawback is that you run the risk of high-quality leads being placed with a less experienced rep. 


When determining your segments for a new year, start by identifying data quality issues that affect territories. Then, decide overall regions and/or industry segments. You’ll also want to decide whether to give special attention to named/global accounts. Once you’ve addressed these market factors, you should analyze the various KPIs that you also wish to factor into balancing segments, such as: open pipeline, closed won for the last year, lead volume, and account scores. Giving one rep a territory with tons of open pipeline and another rep a territory with very low lead volume sets the reps up for success (and often, conflict.) 


The process for carving and balancing segments is iterative, so rather than trying to divide your entire market into equal segments at the onset, we’d recommend balancing no more than 10 buckets at a time. For example, if you have 17 reps in AMER, start by first dividing into east and west. From there, subdivide. 


As you balance the accounts, you will be able to tweak until you have balanced according to the criteria that are most impactful to your business. To that end - it helps to identify a prioritized list of criteria on which to balance accounts. Account density remains a key metric for most sales orgs, but looking closely at the details; propensity or a valuing system can make your coverage ratios more meaningful. (Check out these in-depth pointers on account scoring.) Additionally, consider how important it is for your AEs to have a mix of hunter/farmer territories, balance of company size or industry verticals, and current status of the accounts. 


Lastly, be sure to factor in growth by over-carving territories. It is easier to assign temporary coverage for a territory with a rep to-be-hired than to take a territory that a rep considered their own and give half of it away.


  1. Assign Resources

Once you’ve carved the territories, it’s time to assign quotas to each, based on the high-level financial targets set earlier. Then, you can assign each territory to a rep. As mentioned in the previous section, for territories that have reps to-be-hired, assign temporary coverage. Be sure to effective date each assignment so that you can easily track compensation later on. Additionally, particularly when assigning new reps, be sure to factor in ramp to understand the impact of assignments to the quota/target for each territory. Finally, assign supporting roles, such as Pre-sales, CSM, or other overlay roles. 


  1. Commit the Plan

After all of the above have been finalized, you’ll share the territory and quota plans with your field team, then collect and consolidate their feedback. At this point, you may also want to take another look at your account data, and partner with IT to scrub for data accuracy, such as duplicates and account owners. Work with sales leaders and managers to address changes that happened during the planning process, such as promotions and departures. 


  1. Define Run Time Policies

In order to have a successful rollout of your plan, you should define rules of engagement and uphold them. Create policies that state rules of engagement for AEs by segments, policies for holdouts to accommodate the impact of account / opportunity changes, policies for splits and opportunity management when an AEs manager changes, as well as a process for dispute resolution. These runtime policies will at least help your team to minimize disruption by these common events. 


  1. Define Process for Changes

Lastly, while there will inevitably be changes you need to make throughout the year, it is critical to determine what criteria will not trigger account owner changes. For example, you may state that changes in employee count, address, mergers and acquisitions. This prevents disputes that distract reps from selling. Our suggested best practice is that accounts should change ownership throughout a year only based on defined policies. That said, it can help to specifically outline how managers can request ownership changes when policy requirements are met. 

Finally, although most organizations have a period at the end of each year where they carefully plan for the coming year, continuous planning is important. Because market conditions always change, the move to automated GTM planning and execution is necessary - particularly for fast-growing companies who need to stay agile.

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