DISC Market Planning
Sales budgeting, forecasting, and market planning are crucial components of any organization’s overall success. Each plays a significant role in determining a company’s direction, revenue projections, resource allocations, and overall financial health. Market share is a key factor in this process as it directly identifies an organization’s sales targets and defines its strategies. DISC provides full distribution marketplace sizing for both the supply and demand sides and can assist with share calculations. Below is guidance on the overall sales budgeting process, some steps to take during the process, and how it all relates to market share.
The first step in the sales budgeting process is gathering a comprehensive market analysis overview. Understanding the total market size and looking at it from the primary electrical verticals (construction, industrial, institutional, and utility) is a solid starting point. From here it’s important to note the areas of growth versus the areas of lag to help identify market trends, understand customer preferences, and target areas of weakness and opportunity. Market share data is vital at this stage as it helps the company gauge its position relative to competitors. By knowing its current market share, an organization can set realistic goals for growth.
Sales forecasting is the cornerstone of the sales budgeting process. It involves making educated predictions about future sales based on historical data, market trends, and other relevant factors. Simply divide sales by market size to get a benchmark share calculation. Geographical information is key in performance measurement and planning, and national, state, county, and zip code data should all be collected in the calculations. National, regional, and more granular sales territory should all be considered. Market share data becomes crucial, as it can help determine a company’s current position and the potential it has for capturing a larger portion of the market and maintaining existing share.
Using the sales forecast and market share data, organizations can establish specific sales targets. These targets should be both realistic and ambitious, considering the company’s growth objectives. Market share goals may include maintaining the current share, increasing it, or even entering new markets to gain a share.
With sales targets in place, budgeting and resource allocation are the next critical steps. This involves determining how many resources (financial, personnel, facilities, and otherwise) will be needed to achieve the sales goals. Market share data based on current and past resources is useful in making informed decisions about the level of investment required to compete and meet sales targets effectively.
Once the budget is allocated, developing sales strategies is vital to achieving goals. These strategies should align with the market share objectives. For example, if the goal is to increase market share within a vertical market, initiatives might include expanding product lines, entering new geographic markets, targeting specific industries, or intensifying marketing efforts.
Regular monitoring of sales performance against the budget and the market is crucial. Market share data provides insight into whether the strategies are effective in achieving the desired market share goals. If market share is not increasing as planned, adjustments to strategies or resource allocation may be necessary.
Any discussion of market share must take competitors into account. It’s essential to continuously analyze competitors’ actions, acquisitions, staffing, and market share changes. Understanding their strategies and market share trends can help refine one’s own approach and identify potential opportunities or threats.
Deep customer engagement is vital to maintain or grow market share. Building and maintaining a strong customer relationship through shared and planned goals with scheduled progress reviews is a winning strategy. Become an integral part in your customers’ operations and processes. Engage with customers through feedback, surveys, and market research to help align products and services with customer needs and preferences. Not everyone has the time and resources to accomplish this internally. David Gordon and his company Channel Marketing Group offer this level of market research as well as guidance on how to reap the most value from the research.
Innovation also plays a crucial role in market share growth. Understanding innovation from within your customers’ organizations and communicating those benefits can unlock new markets. Leaders must continually update their knowledge about new technologies, products, and services to differentiate themselves from competitors. Market share objectives should consider how innovation can help gain a competitive edge. Communication, both internal and external, should be a key part of any innovation and differentiation strategy.
Sales budgeting is not just about short-term goals. Organizations should also have long-term plans and targets for market share growth. This may involve researching and planning to enter future emerging markets, staying abreast of policy changes and regulations that can drive new business, and, of course, building a strong brand presence over time.
In conclusion, sales budgeting is a dynamic process that relies heavily on market share data and analysis. It guides organizations in setting realistic sales targets, allocating resources effectively, and developing strategies to either maintain or increase their market share. Market share is not a static metric or just another statistical benchmark; it is a dynamic, critical factor that informs decision-making throughout the budgeting process and is closely tied to a company’s overall success and growth in the marketplace.
DISC has been providing thoughtful and reliable market intelligence and forecasts for both the supply and the demand sides of the electrical distribution community since 1985. We are here to help you understand your market and devise a roadmap to success.
Chris Sokoll – October 6, 2023
