Realizable Potential: The Key Ingredient of Successful Sales Plans
Updated: Mar 19, 2021
One of the most critical segments of a pragmatic business plan, is the sales plan. In many cases, there is internal pressure to make unrealistic sales plans which makes the financial plans unrealistic and likely to fail.
The sales plan must be aggressive, achievable, and fully compatible with the biggest sales asset – the sales team personnel. Results must be measured daily and communicated to the sales team regularly.
The key to a successful sales plan is the determination of the “realizable potential” for each customer. The sales plan must be constructed by forecasting sales volume for each customer accompanied by a sales implementation plan for each customer. Too often, sales managers confuse total customer sales potential with “realizable sales potential”.
"The key to a successful sales plan is the determination of the “realizable potential” for each customer."
Total Potential vs Realizable Potential?
Realizable potential considers the following questions:
Are the products purchased by the customer, products that can be supplied by the supplier?
Are there customer policies that limit the number of purchases from any one supplier? Many business owners strategically limit their exposure to any one supplier.
Are there legal issues? For example, a minority owned business structure may limit the amount of purchases available to one supplier.
Are there inventory requirements and/or pricing requirements that limit the potential purchases?
Are there existing purchasing contracts in place that limit potential purchases?
Are there credit requirements that limit potential purchases?
Are there delivery time requirements that limit potential purchases because of delivery logistics?
Are there personal relationships with existing suppliers that limit potential purchases?
These factors and more must be considered when determining the “realizable sales potential” of a customer. It is imperative to understand these sales roadblocks and account for them in the sales plan. Focusing on the realizable sales potential for each customer plus recognizing the strengths of your sales team assets, will insure a successful sales plan.