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Calculating sales capacity is relatively straightforward, but the stakes are high, and failing to get alignment on a solid sales staffing plan means you’ll be scrambling to match your headcount with top-line targets. And even if you start early (e.g., in Q3 or early Q4 for the next fiscal year), figuring out the right assumptions can take a while, especially if the needs of the business call for significant hiring increases or headcount reallocation.
Here’s how you can get everyone in your organization behind your plan.
Sales Capacity Planning Process
Simply put, sales capacity planning is the process of matching demand with supply in a given territory, or over a period of time. Using this process provides sales teams with much more accurate and motivating sales goals as the goal should closely resemble market opportunities.
Sales capacity planning also helps sales teams grow effectively as the process of matching demand with supply clearly outlines areas of need within sales teams. Oftentimes these calculations require the use of both current and historical data to analyze trends and make accurate predictions.
Sales capacity planning may seem straightforward in its goal, however the insights obtained from this process extend far beyond simply matching supply with demand. Managers use this data to set quotas, define territories, evaluate performance, and much more.
Sales Capacity Planning Tools
There are a number of different tools that can assist with your sales capacity planning. Often times sales capacity planning takes place in a spreadsheet or other form of nonintegrated workspace. These tools once worked great but are quickly becoming outdated.
In order to provide the best analysis into your sales plan, it is important to have tools that monitor sales representatives’ performance, provide clear and stackable workloads, and capture insights and reports on current and past company data.
The best tools are ones that bring all of the calculations under one roof. With Workday Adaptive Planning, you have the ability to bring all your sales planning tools together to create a robust sales plan. Workday adaptive planning not only provides sales capacity planning tools and automation but also expands upon sales capacity calculations to help produce quotas, plan territories, forecast sales, customer retention costs, and keep track of sales analytics.
Below we breakdown the key features of a good sales capacity planning tool.
1. Integration and automation
Productivity as a metric is actually not very difficult to calculate. It can be as simple as calculating the bookings of a certain region or district in your sales team and dividing it by the number of quota-carrying sales reps in that space.
The challenge lies in both maintaining accurate sales rep data (when reps join, what role they’re in, what quotas and territory they’re tied to during what time period) and tying that data into assumptions around ramp, projected attrition, and alignment. The goal is to optimize these factors, influence a better distribution of resources, and ultimately drive better rep productivity.
When data is managed in one integrated and automated platform, planning your sales capacity is easier, faster, and more accurate.
2. Collaboration
Hopefully, the sales capacity plan doesn’t happen in isolation. Cross-functional alignment should be part of every high-growth business strategy, ensuring that planned sales resources fit into broader initiatives. Yet as much as sales leadership or executives in your organization trust you, if you can share your reasoning and show why you chose which assumptions, you’ll be better prepared to illustrate your plan with confidence.
With an integrated sales planning platform, you’ll be able to model various scenarios (this commission plan, that new market, those new sales reps) and share those with your stakeholders. And when everyone can share reports and insights back and forth, there’s more visibility into all of those variables and more data behind your plan.
3. Deployment
Next up, deploy and operationalize your plan. You’ve already planned any headcount changes you need to reach that top-line target. You’ve made sure those assumptions tie into the territories and quotas you’ve distributed. And if you don’t have the capacity to meet those targets, you’ve adjusted your headcount accordingly.
Once you nail down your assumptions around productivity, ramp time, and territories, and align with your stakeholders in finance and HR, you can formulate a winning sales capacity plan. Ultimately, the onus is on sales operations and leadership to ensure that the right resources are aligned with sales targets and quotas. Only you are in the position to know your reps and what they can handle.
4. Recalibration
Obviously, it’s not ideal to significantly switch up territories or accounts once the year starts and sales reps have gotten their quota letters, but adding new salespeople to address net new accounts or to support a new market is sometimes necessary. If you have the ability to quickly run some scenarios or see the average ramp time of a new salesperson, you’ll be able to incorporate that data into your plan and justify any increased headcount requests to leadership.
With one source of truth, you can quickly and easily model out different scenarios and address the changes that arise in a typical high-growth organization.
5. Allowing insights, not instinct
In today’s fast-moving business world, sales operations teams need to make agile decisions based on evidence, not instinct, to evaluate what their teams need to execute and succeed. If you can easily, accurately, and efficiently incorporate analytics around ramp, productivity, attainment, attrition, and so forth into your annual sales capacity plan, you’re in good shape. Only then can you have confidence that you’re hiring the right types of reps in the right spaces to get the best return on investment.
When you use a sales planning platform that integrates with all of your data sources, you can automate data aggregation and seamlessly and accurately pull your required data points into one place. This in turn enables you to comprehensively and holistically plan for your go-to-market strategy and build scalable, data-driven processes around hiring and ramping reps, balancing territories, setting quotas, and ultimately making your sales team successful.
Want to learn more about sales capacity planning?
When it comes to sales capacity planning, the name of the game is transparency. Any time spent bringing team members up to speed is time lost during the planning process. However, using a tool such as Workday Adaptive Planning is an effective way to make goals a reality. Learn more about what QBIX can do for your business by scheduling a quick meeting to discuss possible solutions to your business needs.
This article was originally published on Workday Adaptive Planning Blog.