Annual planning doesn’t have to be overwhelming.
To be honest, it’s slowly become one of my favorite times of the year because I get to marry my inner, data-informed, nerdy side with my creative, risk-taking side as I figure out the best way to help our company meet our growth goals.
Now, one thing I will note here is that you’re going to hear me talking about attribution in this post. For those of you who’ve been following along, you know that I very much subscribe to an ecosystems, not channels or departments approach to customer acquisition. BUT, in order to do annual planning, there still is an element of attribution that needs to be used to be able to do apples-to-apples comparisons with historicals and for resource planning. I’ll explain more when we get to those sections, but noting this now before you all start coming after me with pitchforks 😅
Sponsor: Noble
I've always been skeptical of customer references. I know the company cherrypicks one of their customers who will tell me exactly what I want to hear. So like most buyers, I turn instead to my peers and ask them for their recommendations.
This trend goes beyond me. Today, most buyers buy the same products our colleagues, peers, mentors, and thought leaders that we trust use. And this is also backed up by data:
👉 82% of B2B buyers seek advice from people they know before buying
👉 50% end up buying the same product their colleagues use
And this is why I’m excited about what Noble is building. They’re changing the word-of-mouth and social proof game by allowing prospects to see which members of their network actually use the product. It’s all about giving buyers the power to connect directly with customers they know and trust, making every decision easier.
Your annual planning guide
I wasn’t sure if I wanted to write one of these on annual planning. A lot to unpack. A lot of variables at play. So many different approaches taken by different individuals and organizations. So when long-time follower, and now friend, Elie Daccache replied to the last newsletter asking me to cover annual planning, I was hesitant. But then he said this:
“As long as you frame it as *your* process, you should be fine. Let people take away from it what they will.”
And that’s when I thought to myself, “damn, he’s right.”
So ladies and gentlemen, marketers and GTM practitioners, and even Mom (yes, she subscribes to this, despite that she couldn’t care less about B2B SaaS 🤷♂️), let’s get into how to approach next year’s annual planning.
Step 1: Review the previous year
Before we even get into the new goals, we’re going to start with where we’ve been. I like to think about this in four buckets:
How has the company as a whole been doing the past few years?
How has the collective GTM team been doing the past few years?
How has marketing been doing the past few years?
How have the members of the marketing team been doing the past few years?
Now let’s break these down a little more for you…
How has the company as a whole been doing the past few years?
I don’t go too deep here, this is more to get a pulse on how the company has (or hasn’t) been growing to have a sense for what’s most important for me to solve as a marketing leader. How well-known are we in a crowded space? Is the market we serve reactive to economic ups and downs or relatively stable? Where have internal investments been going? Into further product development? Into retention efforts? Into heavy acquisition efforts?
You can see where I’m going with this. Anecdotal insights primarily here.
How has the collective GTM team been doing the past few years?
We’ve all been there when marketing has a bad month or quarter, and leadership comes cracking down saying that marketing isn’t working and needs to change something ASAP. But what if it wasn’t a marketing issue, and a larger trend across all GTM efforts? That’s what we’re looking at here.
Look at up quarters and down quarters. How did the collective GTM (marketing, sales, BDR, partner, etc.) do? And here’s your first example of where I’m going to use “traditional” attribution to help me. I like to break out qualified pipeline generated and won revenue by the lead source to see trends over time.
Pipeline production dropped in a certain quarter - was that seen across the board with all the departments? Or was it really just marketing that dropped? Seeing this data in a stacked bar chart is a great way to quickly visualize totals and percentages across our GTM teams.
And again, we’re not doing this to say which team is the most important, we’re doing this to spot apples-to-apples trends over time to get ahead of seasonality, resource planning, etc.
How has marketing been doing the past few years?
Now is where we drill into marketing specifically and get ready to do some serious spreadsheeting (definitely not a word, but I kind of like it as a verb + the play on what it sounds like since we all know spreadsheets can quickly become a hot pile of 💩 if left untamed).
Whether you have a single or dual-motion GTM, the below funnel is a good way to visualize trends. NOTE: if you have a short sales cycle (< 30 days), you can get away with “snapshot” reporting (i.e. what was created in period, what was closed in period, regardless of when created). If your sales cycle is more than 30 days, you’re going to want to go with cohorted reporting (i.e. what was created in period, and how those have progressed as time goes on. The closer you are to the current quarter, the more incomplete the dataset will be as you wait for those to mature in the sales cycle).
As you can see, there are 16 rows in the chart below. Another thing you’ll note is that the only “cost” in this is variable spend - headcount, resources, etc. aren’t in this chart. Depending on what you’re responsible for, you may/may not want to include that. If you’re a director/VP/CXO, you’ll want to have your all-up marketing costs so you can get to your marketing CAC + payback period. And if you really want to impress leadership + the board, go a layer higher and pull in BDR, sales, and any other resourcing costs that go into acquisition to get a true GTM CAC + payback period.
As you map out the previous 2 years of data, you’ll start to notice trends. Where are cost pers rising? Where are we getting more/less efficient? Things like these are great because they are signals to dive in to diagnose what’s going on there and come up with a plan to remedy or scale, depending on if it’s good or bad.
How have the members of the marketing team been doing the past few years?
If you’re an individual contributor, this is a great chance to reflect on the past year. What’s the current scope of your role + how have you performed relative to that? What additional responsibilities have you taken on this year? Where have you improved your skillset? Where are you lacking? All of these questions will help give you a sense of direction heading into the new year, and a great starting point for a conversation with your manager.
If you’re a people manager, this is a time to have an honest assessment of the team. Note: not everything you get into here needs to be shared with the individuals, part of this is just for you as a manager as some of the insights will highlight areas you need to improve as a people manager.
Who are the best performers on the team? Why? Is this anecdotal? Data-supported? Dig into this and really outline the skills, habits, traits, actions, and types of results these individuals possess or have driven.
Who are the lowest performers on the team? Why? Is this anecdotal? Data-supported? Again, dig into this and really outline the skills, habits, traits, actions, and types of results these individuals possess and where they’ve come up short.
Use this as an opportunity to inform how you should manage them moving forward. And use the insights uncovered to inform what to look for in potential candidates if your plan for the upcoming year will include increasing headcount.
Step 2: Review the upcoming year’s goals
The initial goals that are shared from leadership will be at the company level. Things like:
Revenue target to hit by EOY next year ($)
Month-over-month or quarter-over-quarter growth rate (%)
Gross revenue retention (GRR) target (%)
Net revenue retention (NRR) target (%)
Net new acquisition revenue ($)
The job from here is to determine which goal(s) are applicable to you/your team. I like to think of these in two ways:
“Straight line” mapping
These are the goals that your role/team should own or be a partial owner of. For marketing, the 2nd and 5th bullets above would be goals that I would map in a straight line to us as responsible for accomplishing. Pretty straightforward here.
“Dotted-line” mapping
These are the goals that your role/team shouldn’t own, but that you have the opportunity to impact or help achieve. The 3rd and 4th bullets above would be goals I would map in a dotted-line to us.
For example, you can run an analysis on existing customer segments to understand which ones churn at the highest/lowest rates, which have the highest/lowest ACVs, etc. This can then inform your ICP definition and targeting for marketing efforts. While certain segments may be easy to bring in, if they churn quickly or don’t make for great customers, they’re going to hurt your GRR + NRR numbers. And that comes in a dotted-line back to the acquisition strategy marketing runs.
Steps 3 + 4: setting your goals and crafting your plan
Now that we know which goals we’ll own and which we’ll help support, we’ll be able to get into steps 3 and 4: setting your goals and crafting the plan to achieve those.
Stay tuned for these steps next weekend as I’ll cover those in part 2 of this annual planning series.
And if you have questions based on the above or other areas of annual planning, reply back to this, drop a comment, or DM me! I might just include that in the next email or a follow on after part 2, depending on how many come through.
LinkedIn post of the week
Self-serving, but given the overwhelming interest that came in the comments from the post, I wanted to make sure I shared this with you all here.
This past Tuesday I led a session for Exit Five's Marketing Leadership Accelerator on how to work with other execs, sales, and the CEO.
And since this is a topic near + dear to my heart (and something I wish someone had shared with me earlier in my career), I shared all the slides with anyone who wanted them. The original plan was for people to simply comment they wanted them + I would DM them their way, but after a few hundred requests came in for this, I gave up and simply dropped the link to the deck straight on the post.
So for any of you interested in checking it out, here’s the link to it.
In it you’ll learn:
→ How to build strong relationships with other execs and cross-functional leaders
→ Effective communication strategies for collaborating with sales and the CEO
→ How to align marketing initiatives with broader company goals and priorities
And yes, this will also be a future newsletter, so more context to come within the next handful of weeks :)
See you next Saturday,
Sam