The Annual Planning Framework

Read time: 8 minutes

Written by:

Eddie Reynolds
Founder & CEO

Download Infographic: Click here to download high-res PDF

Download Annual Planning Checklist: Click here to download an editable copy.

Missing plan is the best way for a revenue leader to lose their job. When annual plans are built more on hopes and dreams than historic performance, realistic targets, and thoughtful problem-solving, reaching your EOY numbers becomes a game of chance rather than strategy.

In this framework, we’re going to share best practices for annual planning. We’ll share how to balance top-down goals with bottoms-up planning and how to set realistic targets by channel, segment, product, team, etc. so you can execute with precision. We’ll also share how to define the needs for headcount and resources to reach those targets.

Most importantly, we’ll show how to get leadership aligned on all of this, and how the CRO and the entire leadership team can mitigate risks of missing the plan.

Here’s the breakdown:

******************************************************************

Step 1: Set Clear Goals and Targets

Annual Planning typically starts by aligning leadership on the top-down goals and objectives for next year. It’s critical these goals are crystal clear and shared across the organization.

Align with Company Objectives

Start by meeting with your CEO, CFO, and other key execs. This gives you a clear view of the big-picture company goals—things like growth, profitability, and market share. What’s the focus for the year? Are you doubling down on new business, retention, or profitability? Whatever it is, everyone needs to be on the same page.

Break Down Revenue Targets

Next, define revenue targets. Set clear goals for new business, renewals, and expansion. Break this down by channel, segment, geo, product, etc.

Establish Budgets

Before you can start executing, it’s essential to know your resource constraints. What budget do you have for headcount, tools, and programs? Work with leadership to negotiate the resources needed to hit your targets.

Step 2: Build a Bottoms-Up Data-Driven Plan

Most start with the top down goals above. Many don’t validate them with historic data. Looking at past performance helps you understand what worked, what didn’t, and where improvements can be made. Most importantly, it helps you set targets you can actually achieve with the resources you have.

Review Revenue and Pipeline Metrics

Take a deep dive into key metrics: How has ARR grown in the past year? What was Net Revenue Retention and what’s realistic next year for retention and expansion? How much new business pipeline was created from each channel and how did it convert to revenue? What’s realistic next year?

Analyze Sales and Marketing Performance

Look at conversion rates, sales cycle length, and average deal size. What channels or products are underperforming? Use this data to help shape your goals for the upcoming year.

Evaluate Customer Success

Retention is just as important as acquisition. Are your customer success (CS) teams engaged in the right segments? Where can you improve retention and cross-sell/upsell efforts? Make sure to review customer health scores, churn rates, and feedback from your CS teams to pinpoint areas for improvement.

Step 3: Develop Your Go-to-Market (GTM) Strategy

The GTM strategy is where the rubber meets the road. Now that you’ve got clear goals and insights, it’s time to figure out how you’ll achieve them.

Define High-Level GTM Goals

What’s your biggest initiative for the year? It could be expanding into new markets, launching a new product, or improving cross-sell and upsell capabilities. Make sure your GTM strategy aligns with your company’s goals and targets.

Tailor Strategies by Region and Segment

Not all markets are the same, so you need to prioritize and tailor your approach. Should you focus on enterprise customers, small businesses, or a specific region? Make these decisions early so you can allocate resources where they’ll have the most impact.

Collaborate with Marketing and CS

Your marketing and CS teams are key partners in your GTM strategy. Work with them to define a demand generation plan and ensure your customer success teams are focused on improving retention and driving expansion within existing accounts.

Step 4: Build the GTM Plan

With your GTM strategy in place, it’s time to create a detailed GTM plan. This includes setting quotas, territories, and ensuring your sales team has the capacity to hit your targets.

Plan for Team Capacity

It’s an easy trap attempting to double sales by doubling headcount. If only it were that easy. How many deals can one rep manage and close at a time? How much inbound is there to go around? How much time is needed to fill the gap by prospecting? What about ramp time? Make sure you’re setting realistic targets.

Assign Territories and Accounts

Don’t give reps 2,000 accounts when they can only cover 200. Match their capacity to the very best accounts you can identify within your ICP to maximize production.

Set Quotas and Compensation

Establish realistic quotas for each sales rep based on historical performance and revenue targets. Align compensation plans with these quotas to keep the team motivated and on track to meet goals.

Step 5: Turn Plans into Action

Now it’s time to make it happen. The execution phase is where all the planning comes together. You need systems and processes that can support your team in achieving these goals.

Create Detailed Revenue Forecasts

Build your monthly and quarterly forecasts, keeping in mind the sources of revenue—new business by channel, renewals, and expansion. It’s also helpful to create best-case, worst-case, and likely scenarios to account for unpredictability.

Standardize Processes and Metrics

Process is how the team executes the plan. Sales, marketing and CS teams need clear, step-by-step processes to execute the plan and align together on shared goals. Define SLAs and metrics that matter to drive accountability.

Optimize Your Tech Stack

The plan itself is tracked and executed in the tools, namely the CRM. Make sure the goals, strategies, processes, and metrics are all there so you can track progress and execute with accurate real-time data and efficient workflow.

Step 6: Present The Plan

You’ve done the hard work—now it’s time to communicate your plan.

Present to Leadership

Share your plan with the executive team, highlighting how it aligns with broader company goals. Be ready to explain your assumptions and make adjustments based on their feedback.

Roll Out to the Team

Once you’ve got buy-in from leadership, it’s time to communicate the plan to your team. Be clear about quotas, goals, and available resources. This is your chance to motivate the team with a compelling vision for the year ahead.

Step 7: Track, Adjust, and Iterate

A good plan isn’t static—it evolves as you go. Regular check-ins and adjustments ensure that you’re on track and can pivot when needed.

Set Up Regular Reviews

Schedule weekly, monthly, and quarterly reviews to track progress against goals. Use dashboards to keep an eye on leading indicators like pipeline growth, conversion rates, and customer retention metrics. Have your VP of RevOps and/or an analyst regularly block time to slice and dice the numbers to uncover real insights.

Be Agile

Things won’t always go according to plan. If something isn’t working, be ready to pivot quickly. Reforecast if major changes happen—whether it’s a market downturn or unexpected churn. Continuous improvement is key.

Get the Next Issue

Like what you see? Subscribe to the newsletter and get fresh revenue growth tips like these in your inbox weekly.