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You’ve been given your 2019 sales and gross margin (GM) goals at a critical time of year, largely because it coincides with New Year’s resolutions and the promise of greatness for the upcoming unknown. Discouragingly, recent studies show that only 64 percent of such resolutions last longer than the first month and only 46 percent last longer than six months .
Let’s defy these odds by taking a deep dive into an all-encompassing look at the activity of goaling and particularly some activities I’d ask you to consider as you translate these sales and gross margin goals into actions throughout 2019.
Conduct an AAR
Before considering what to accomplish in 2019, make a concerted effort to learn from 2018 while still fresh in your mind by conducting an after-action review (AAR) . What was supposed to happen? What did happen? Why did it happen that way? What should we do differently in 2019? Follow a KISS principle; not Keep It Simple Stupid but rather:
Keep. What did you do throughout 2018 that you want to keep doing? List your biggest wins from 2018 worth sustaining.
Improve. What did you do last year that shows some promise but needs some refinement to grow closer to optimization?
Stop. What activities did you find wasteful or at least unhelpful? You’ve perhaps heard or even applied the Eisenhower matrix in the past as a framework to identify areas by which to gain efficiencies. This premise also is a key component to Dr. Stephen Covey in The 7 Habits of Highly Effective People, particularly in terms of Habit 3: Put First Things First .
Identify where you spend your time and energy, and deliberately plan to adjust to accomplish what you truly want and need to accomplish in 2019.
Start. What activities did you intend to do in 2018 but never got off the ground? Do you need to add them to your 2019 goals?
Secondly, it’s important to develop a list of goals for 2019 that are smart — SMRT . There are many variations of this but I recommend using a framework you’re most comfortable with. This is mine:
Specific. For example, your 2019 sales and GM goals are dollar-specific. Running the Boston Marathon is more specific than “running a marathon” because it’s a set date and place. I’d recommend against solely focusing your goals on work-related activities because it’s simply not a reflection of true life. If it is, you most likely lack balance.
If you focus entirely on work-related goals and set achievements with activities nested in support of just those goals — and your health fails — you won’t accomplish the work-related goals. Mirror true life with your goals: professional, health and fitness, family and friends, faith, etc. If you intuitively know it’s something critically important for you to lead a healthy and successful life, include it in your annual goals.
Measurable. Again, your 2019 sales and GM goals are measured weekly, quarterly and annually in terms of dollars and percentages. If running the Boston Marathon is your goal, set a specific time you want to finish in and adopt a program designed to get you physically able to achieve that time.
Realistic. Before thinking, “My sales goal is too high!” conduct an individual customer analysis. Assess 2019 goals specifically on whether each one has the realistic potential to go up, go down or stay the same. Keep in mind the contextual appreciation of continued price increases from our manufacturers that will clearly impact GM without commensurate price increases on your end. This will likely have an impact on your customer base.
Once complete with this analysis, determine how close you are to achieving the established goal. If short, you’ve just identified how much growth through new customers or revived accounts you’ll need. Considering the relative effort it will take to turn certain prospects into consistent customers must be appreciated and planned for, possibly on a schedule by quarter.
Time-based. We’ve provided an annual goal for sales and gross margin, but it’s up to you to translate it into an executable plan to accomplish your goal by breaking it into specific tasks and accomplishments associated with a calendared date. As mentioned previously, it’s important to take into consideration both your customers’ buy-cycles as well as your own holistic 2019 plan.
For example, if 80 percent of your customers are school districts and you’re planning a two-week summer vacation, your third quarter (July through September) will likely be incredibly low. Mitigate this risk accordingly by diversifying your customer categories (i.e., summer month buy-cycles in the hospitality industry are the opposite of schools in very general terms).
Conduct a Calendar Review
It’s important to distinguish between goals and projects . Projects are the efforts requiring multiple subtasks to accomplish over time and closely associated with the daily grind, but they don’t necessarily rise to the level of a goal or an overarching accomplishment outside the grind of life’s competing priorities. Having completed your KISS analysis of 2018 and informing 2019, you should now know what you want to keep, improve, stop and start in terms of goals.
It’s important to keep in mind that you want between seven and ten goals for 2019. If you have less than seven, you’re likely not pushing yourself. If you’re pursuing more than ten, you’re at risk of over-extension. The old adage comes into play: If you focus everywhere, you focus nowhere.
Overlapping that reflection on the framework of SMRT, you now have a structure to start hanging actions upon. A collection of tasks results in accomplishments; a collection of accomplishments results in goal achievement. They build on each other and it’s important to approach them in this way. To accomplish your goals, I recommend practicing a 3x3 approach .
Identify two to three goals per quarter. If you achieve two to three goals per quarter, your 2019 result will be between seven and ten annually; you’ll avoid having all your goals measured for completion on December 31. These are the key things you’re striving for outside of the daily, business-as-usual grind. It is a common mistake people routinely make that prevents focus.
Keeping in mind the benefits of blending all aspects of your life into your goals and your professional goals are, in part, dictated to you via the TMS South sales and GM goals, you’ve got a little room to maneuver here. It’s important to deliberately limit your focus to maximize your achievements. In other words, do your best to take 20 steps in one direction as opposed to one step in 20 directions. It’s also very simple to divide your sales and GM goal by four to create a SMRT quarterly goal. Accomplishing it leads to an annual victory.
Choose your big three achievements for the week. It’s important to take five minutes at the start of every week to identify the top three results you’ve got to accomplish in the upcoming seven days to stay on pace for goal completion. It’s easy to fill that list with about 15 to 20 things, which historically leads to overwhelm and under-achievement.
It takes discipline, and it doesn’t capture everything you will accomplish during the week, but there is power in viewing these three things through the lens of “If I do nothing else this week, I absolutely must accomplish these” in terms of exceptional focus. Per the discussion regarding the Eisenhower Matrix, this activity becomes immensely simpler when you identify where and how you’re losing time efficiency and have the discipline to stick with 95 percent of your time and effort in Quadrants I and II (see Exhibit 1).
Select your daily three tasks for the day. If you enjoy the feeling of a win at the end of every day, employ the practice of identifying the top three, and only three, tasks you must absolutely complete. Gandhi said, “It’s the action, not the fruit of the action, that’s important .” Nesting these actionable tasks with your overarching goals and achievements ensures that you can rest your head at night knowing you’ve made progress toward accomplishing them.
Once again, using the TMS South sales and GM goals as an example, once you’ve completed your forecasting of existing customers as the primary means to accomplish your goals, and assuming you will require new customers to complete the entire growth plan, it’s important to develop a well-thought-out plan.
I’ve shared the Pro QB and Beaker concepts with a few folks and they apply to this process as you develop an approach to accomplishing your annual sales and GM goal. If we once again use a crossed spectrum view, quadrants appear (see Exhibit 2). On one spectrum, you’ve got the amount of effort or time required to turn a prospect into a customer. The overlapping spectrum is the anticipated sales in terms of dollars you can anticipate from a given prospect, ranging from massive to minimal in both cases.
“Peyton Manning” prospects are the potential customers who have a big budget and everyone calls on them. They are typically in the larger city limits and have multiple reasons for not doing business with us. They take a long time to figure out but once you do, they have the potential to be a cash cow for a long time.
“6th Round Picks” are prospects who have far fewer, if any, barriers to becoming a customer and are visibly relieved if not overtly excited to be paid the time of day. They may never become a huge account but they’ll rapidly return your attention with long-felt loyalty and consistency.
Now and then you may be fortunate enough to discover a “Unicorn” or a prospect with massive spending potential but requiring minimal effort to get them started as a customer. These tend to be associated with a pre-existing relationship as known individuals move within the industry and they seek us out. If you find one, jump with both feet!
The last quadrant requires your appreciation for the human dynamic. If a prospect is sharing stories with you about spending the weekend fishing with his current provider, you’re likely never going to land that account. A good rule of thumb would be to spend about 95 percent of your time pursuing Quadrants IV (6th Round Picks) and I (Peyton Mannings).
Once you’ve categorized your existing prospects based on an assessment of their potential relative to your effort, it’s time to develop a smart approach to achieving your goal (see Exhibit 3). Current customer sales forecasting creates necessary specificity in terms of required number and type of new/revived accounts, measuring relates to the dollar amount required to achieve or exceed your goal and your assessment of realistically transitioning a prospect to a customer must be a continual process.
Prioritize your top 10 prospects by aligning your progress with daily tasks and weekly achievements on a time-based schedule of accomplishment. Identify the key actions required to get a prospect to become a customer (i.e., submit a credit application) and target that first PO on the calendar. Forecast resulting sales to help assess your pace based on progress in terms of dollar amount over time. That’s how you can plan to achieve your 2019 goals, keeping in mind the “fruit” generated by action.
Take some time to develop a comprehensive goaling plan for 2019. Define specific, measurable, realistic and time-based goals that you can achieve by applying a 3x3 methodology of three quarterly goals aligned with three weekly accomplishments and driven by three daily tasks. It’s imperative that your goals include, but not be exclusively dedicated to, the TMS South sales and GM plan we’ve challenged you with.
Leverage your understanding of the existing customer base to determine your growth requirement for new accounts. Develop an approach to accomplish this by growing your existing customer accounts while hunting for new customers. Doing so promises to make 2019 an incredible year for all of us.