How to make a marketing and sales plan
“If you fail to plan, you plan to fail”
Imagine you can make an articulated marketing and sales plan. Would that boost growth in your company?
Developing an articulated marketing and sales plan is not impossible, but you need to use the right approach.
A peculiar case
Some time ago I collaborated with a company – that was unable to grow – in defining its marketing and sales plan. The CEO told me that sales always fell short of targets and the marketing budget was not fully executed because he decided to cut some expenses due to the fact that they were not obtaining the expected margin from sales.
I asked him to look at the previous year's plan and he showed me two tables, one with the marketing plan and one with the sales plan. I noticed that the marketing plan only showed the monthly budget for every medium and the sales plan only showed the sales targets per month for each sales channel, but there was no connection between the two plans. So I asked him a few questions:
The answer to all questions was no. No surprise, the sales director complained about marketing's poor contribution to the achievement of the sales plan and the marketing director complained about the failure to meet sales targets negatively affecting the execution of the marketing plan.
Although the case of this company was peculiar, at least the marketing and sales plans were defined at the right time of the year. In some companies, this planning is seen – wrongly – as an inconsequential exercise that interferes with operations in the last quarter of the year, which are considered essential to achieve the goals set the previous year.
This company – and all the others – must define sales and marketing plans aligning the objectives and the activities to be performed throughout the year.
Articulated marketing and sales plan
To define an articulated marketing and sales plan you need to follow the approach outlined in the diagram below:
The first activity is to clarify the growth strategy, which means understanding its six components:
o Mission: describes what the company does.
o Purpose: describes the reason why the company exists.
o Vision: describes how the company wants to be recognized.
o Values: describes how the people in the company behave.
As for markets, the appropriate approach is to use the PESTELEC analysis to determine their attractiveness:
In each part of the PESTELEC analysis, you can use attractiveness indicators (e.g. market growth rate on the economic side, or degree of concentration of competitors on the competitive side), or exclusion factors (e.g. war situation on the social side).
As for clients, the appropriate approach is to identify the different segments, characterize them appropriately and choose the most attractive ones considering the competitiveness of the company and the profitability of the segment:
Once the priority segments have been chosen, the next step is to define the characteristics of the ideal client in each segment (e.g. private companies, selling consumer goods, within a distance of 200 km from the country's capital, with a turnover of between €10 M and €100 M, with turnover growth less than 5% in the last year, that meet payment deadlines) for each type of offering and choose the clients who have the greatest affinity with this set of characteristics.
The last step is to classify the clients according to the depth of their relationship with the company, using the marketing pyramid:
Market growth potential can be determined by several factors, e.g. size, growth history, estimated growth, current market share of the company, possible market share of the company.
The company's competitive strength can be determined by various factors, such as brand strength, clients' loyalty, distribution strength of the different channels, patents and other innovations, quality of the offering, value surplus, cost structure, profit margin, production capability, financial capability, investment capability.
The analysis of the company's offering for each market and each client segment leads to the definition of sales priorities.
Apart from the "fiction" and "abuse" situations illustrated in the diagram above, a company that has a business continuity perspective can set its price on the "frugal-prestige" continuum, however it must always consider its positioning relative to competitors:
As illustrated above, if the price set by the company is A, the positioning is "frugal" and there is room to increase the price. If the price set by the company is C, the positioning is "prestige" and the company should consider if it needs to reduce the price.
Briefly, the answer to the above questions should result in a sentence: “The [brand] offers [category of offering] that are [differentiation] because [target clients] want [results].”
The second activity is to define global sales objectives by territory, channel, client segment and offering. For this, in addition to having clarified the growth strategy, you need complementary information, namely:
Based on the above elements, it is possible to define ambitious and achievable global sales objectives, using for example a table with the structure below:
The third activity is to distribute sales objectives per month. To do this, four factors must be considered:
Based on the above elements it is possible to distribute sales objectives per month for the quadruples territory + channel + client segment + offering, using for example tables with the structure below:
The fourth activity is to create a commercial action plan to meet, or exceed, the objectives set in the previous two activities. This action plan has two types of activities:
The planning of the above activities can be done using for example a table with the structure below:
As you can notice in the table above, the title includes marketing activities and there is a column for Media, the reason for this is to articulate the commercial plan with the marketing plan when carrying out the next activity.
The fifth activity is to create an integrated marketing plan aligned with the strategy, the sales plan and the commercial action plan defined previously, where the objectives to be achieved for each territory, channel, client segment and offering were set out. For this, you need to define a marketing budget and the media to be used.
To define a marketing budget, several elements need to be considered:
A good practice for setting the marketing budget is to simultaneously use a top-down and a bottom-up approach. The first is based on the company's spending history and the analysis of competitors' spending, the second is based on the sales plan and the commercial action plan. The combination of the two approaches will result in a marketing budget adjusted to the growth needs of the company.
Once the marketing budget has been defined, the next step is to define the media to be used. For this you need to consider all the possibilities, generally grouped according to the acronym PESO:
Paid – media paid by the company, for example:
Earned – media earned by the company, for example:
Shared – media shared by the company, for example:
Owned – media owned by the company, for example:
After defining the media to be used in the integrated marketing plan, you need to plan its execution along with the framework of the commercial action plan developed in the previous activity. Often, you need to review this commercial action plan together with the development of the integrated marketing plan, in an iterative process, ensuring that they become articulated.
The sixth and last activity is to communicate the marketing and sales plan:
By completing the sixth activity in the development of the articulated marketing and sales plan, the macro-activity plan of the business cycle Management of the FI growth methodology is completed, as illustrated in the diagram below:
On later occasions I will talk about the remaining macro-activities of this business cycle.
The articulated marketing and sales plan is essential to align the marketing and sales teams of your company, clearly defining the objectives to be achieved and the actions to be performed, which allows you to avoid divergence between these teams and misalignment with the other areas of the company.
Now you know how to make an articulated marketing and sales plan, boosting the growth of your company.
Filipe Simões de Almeida
Managing Partner, FI Consulting
Published on 26-Oct-2022