What is Sales Planning? How to Create a Sales Plan

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Key Takeaways

According to a report by HubSpot, businesses that document their Sales Plan are 1.5 times more likely to achieve their revenue goals.

The Sales Management Association found that 90% of high-performing sales teams attribute their success to effective Sales Planning and strategy.

A study by CSO Insights revealed that organizations with clearly defined Sales Plans experience a 22.7% increase in win rates.

Sales Planning is a strategic imperative that aligns sales efforts with business goals for sustainable growth.

Regular updates and technology integration are vital in adapting Sales Plans to dynamic market conditions.

In today’s fiercely competitive business landscape, the art of Sales Planning stands as a beacon of strategic prowess, guiding organizations towards their revenue goals and sustained growth. At its core, Sales Planning encapsulates a meticulous process of crafting strategies and tactics that seamlessly align with a company’s overarching objectives. It’s not merely a tool; it’s the compass that navigates businesses through the tumultuous waters of the market, ensuring they reach their desired destinations.

Sales Planning is, in essence, the blueprint for success. It begins with a comprehensive understanding of what it entails – the harmonization of goals, resources, and market insights to chart a course for victory. Its significance cannot be overstated, for it empowers businesses to make informed decisions, allocate resources judiciously, and adapt swiftly to changing market dynamics. As we embark on this journey to demystify the intricacies of Sales Planning, we will unveil its multifaceted aspects and equip you with the knowledge needed to create a Sales Plan that not only thrives but also propels your organization to new heights.

1. Introduction to Sales Planning

Sales planning is a fundamental process that drives the success of businesses in today’s competitive landscape. It serves as the compass that guides organizations toward achieving their revenue targets and market objectives. In this section, we will explore the core components of sales planning, its significance, historical context, and the key benefits it offers.

1.1 What is Sales Planning?

Sales planning can be defined as the systematic process of formulating strategies and tactics to achieve sales goals and targets. It involves a comprehensive analysis of market dynamics, customer behavior, and competitive forces to chart a course for a company’s sales efforts. Sales planning provides a structured framework for sales teams to follow, ensuring that their activities are aligned with the broader objectives of the organization.

1.2 Significance of Sales Planning

The significance of sales planning cannot be overstated. It serves as the foundation upon which a company’s sales success is built. Sales planning enables businesses to set clear objectives, allocate resources efficiently, and monitor progress effectively. It ensures that sales efforts are directed toward the most promising opportunities, leading to increased revenue and profitability.

1.3 Sales Planning vs. Sales Strategy

It’s important to distinguish between sales planning and sales strategy. While sales planning focuses on the detailed execution of specific actions and tactics to meet short-term goals, sales strategy takes a broader view. Sales strategy defines the overarching approach to achieving long-term success, including market positioning, target customer segments, and competitive differentiation. Sales planning is a critical component of a well-defined sales strategy.

1.4 Historical Context of Sales Planning

Sales planning has a rich historical context, evolving alongside the business landscape. In the early days of commerce, sales efforts were often ad hoc, with little strategic planning involved. However, as businesses grew and competition intensified, the need for structured sales planning became evident. Over time, sales planning methodologies and tools have evolved, adapting to the changing dynamics of markets and consumer behavior.

1.5 Key Benefits of Effective Sales Planning

Effective sales planning offers a multitude of benefits to organizations. It provides clarity and direction, ensuring that sales teams know their objectives and how to achieve them. It helps in resource allocation, ensuring that budget and personnel are utilized optimally. Moreover, it enables organizations to adapt to market changes swiftly, staying ahead of competitors. Ultimately, the key benefits of effective sales planning include increased revenue, enhanced customer satisfaction, and sustainable business growth.

2. Foundations of Sales Planning

Sales planning is a critical aspect of any successful business strategy. It provides the framework for achieving revenue targets, aligning sales efforts with broader business goals, and ensuring that resources are allocated efficiently. The foundations of sales planning lay the groundwork for a well-structured and effective approach.

2.1 Understanding Sales Goals

At the core of sales planning lies a clear understanding of sales goals. These are the specific, measurable targets that a company aims to achieve within a defined timeframe. Sales goals can include revenue targets, market share objectives, or sales volume benchmarks. Understanding these goals is the first step in creating a sales plan that drives results. Sales teams must be well-versed in the details of their objectives to focus their efforts effectively.

2.2 SMART Objectives in Sales Planning

SMART objectives are a fundamental concept in sales planning. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. This framework ensures that sales goals are well-defined and actionable. Specificity ensures that objectives are clear and unambiguous, measurability allows progress tracking, achievability ensures goals are realistic, relevance aligns objectives with business needs, and time-bound sets a deadline for achieving the objectives. Utilizing SMART objectives helps sales teams set targets that are both challenging and attainable.

2.3 Aligning Sales Objectives with Business Goals

Effective sales planning extends beyond just setting sales goals. It involves aligning these objectives with broader business goals. This alignment ensures that the sales team’s efforts directly contribute to the overall success and growth of the company. When sales objectives are harmonized with business objectives such as profitability, market expansion, or customer satisfaction, it creates a synergy that enhances the company’s competitive advantage.

2.4 Sales Planning Metrics and KPIs

Key Performance Indicators (KPIs) are essential tools in sales planning. These metrics provide a quantifiable way to measure the success of sales efforts. Common sales KPIs include conversion rates, customer acquisition costs, sales cycle length, and customer lifetime value. By monitoring and analyzing these metrics, sales teams can identify areas for improvement, optimize their strategies, and make data-driven decisions.

2.5 Sales Planning Software and Tools

In today’s digital age, technology plays a crucial role in sales planning. Various software and tools are available to streamline the sales planning process. These tools can range from Customer Relationship Management (CRM) software for managing customer interactions to sales analytics platforms that provide real-time data insights. Choosing the right sales planning software and tools can significantly enhance the efficiency and effectiveness of sales teams.

3. Market Analysis and Research

In the realm of sales planning, conducting thorough market analysis and research stands as an indispensable pillar. It forms the bedrock upon which well-informed decisions and effective strategies are built. Market analysis entails scrutinizing the external forces and dynamics that influence your business. This process serves as a compass, guiding organizations to understand their market’s landscape, opportunities, and challenges.

3.1 The Role of Market Research

Market research is the cornerstone of market analysis and a critical facet of sales planning. It involves systematically gathering and analyzing data about your industry, target audience, and the broader market. This data-driven approach provides valuable insights into consumer behavior, preferences, and emerging trends. By comprehending these factors, businesses can make informed decisions about product development, pricing strategies, and marketing campaigns. Market research helps organizations stay agile and responsive to shifting market dynamics.

3.2 Identifying Target Markets

A fundamental aspect of market analysis is identifying and defining your target markets. In essence, this means determining the specific groups of customers who are most likely to benefit from and purchase your products or services. Precision in identifying target markets is paramount, as it enables businesses to tailor their sales efforts, messaging, and product offerings to meet the unique needs and preferences of their ideal customers. A well-defined target market ensures that resources are allocated efficiently, maximizing the return on investment.

3.3 Competitor Analysis in Sales Planning

Competitor analysis is a strategic component of sales planning that focuses on evaluating the strengths and weaknesses of rivals within your industry. By comprehensively assessing your competitors, you gain a competitive edge. This process involves studying their market share, product offerings, pricing strategies, marketing tactics, and customer feedback. By understanding what your competitors do well and where they fall short, you can identify opportunities for differentiation and innovation. Competitor analysis guides businesses in positioning themselves effectively within the market.

3.4 SWOT Analysis for Sales Planning

SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is a structured framework used in sales planning to evaluate the internal and external factors that can impact a business. It provides a holistic view of an organization’s current state and helps identify areas for improvement and growth. By assessing strengths and weaknesses internally and opportunities and threats externally, businesses can devise strategies that leverage their strengths, mitigate weaknesses, capitalize on opportunities, and prepare for potential threats.

3.5 Customer Segmentation and Profiling

Customer segmentation is the practice of categorizing your customer base into distinct groups based on common characteristics, behaviors, or demographics. Profiling these segments helps businesses tailor their sales and marketing efforts to resonate with each group’s unique preferences. By segmenting and profiling customers, organizations can create personalized marketing campaigns, deliver targeted messages, and provide products or services that meet the specific needs of different customer segments. This approach enhances customer engagement, fosters loyalty, and ultimately drives sales growth.

4. Building a High-Performing Sales Team

A high-performing sales team is the backbone of any successful sales planning effort. Building such a team involves a multifaceted approach, addressing recruitment, training, leadership, motivation, and collaboration. In this section, we’ll delve into each aspect to understand how they contribute to the creation of a high-achieving sales team.

4.1 Recruiting Sales Professionals

Recruiting the right talent for your sales team is the initial step toward excellence. It’s crucial to identify individuals who not only possess the necessary skills and experience but also align with your company’s values and culture. The recruitment process should include thorough interviews, assessment tests, and reference checks to ensure that candidates are well-suited for the demands of sales roles. Furthermore, considering diversity in your hiring process can bring a range of perspectives and approaches to your team, enriching its dynamics.

4.2 Sales Training and Development

Even the most experienced sales professionals can benefit from ongoing training and development. Sales training programs should cover product knowledge, sales techniques, objection handling, and customer relationship management. Regular workshops, seminars, and webinars can help keep your team up-to-date with industry trends and evolving customer expectations. Additionally, providing access to relevant sales tools and resources can empower your team to excel in their roles.

4.3 Sales Team Leadership and Management

Effective leadership within the sales team is essential for guiding and motivating individuals to perform at their best. Sales leaders should set clear expectations, define goals, and establish a supportive and communicative environment. Moreover, they play a crucial role in aligning the team’s efforts with the overarching sales plan and business objectives. Strong sales team leadership fosters accountability, encourages creativity, and ensures that everyone is working toward the same goals.

4.4 Motivation and Incentive Programs

Sales professionals thrive when they are motivated and incentivized to excel. Developing comprehensive incentive programs that reward top performers can boost morale and drive results. These programs can include bonuses, commissions, recognition, and career advancement opportunities. Recognizing and celebrating individual and team achievements not only motivates but also reinforces a positive sales culture within the organization.

4.5 Sales Team Collaboration and Communication

Collaboration and effective communication are at the core of a high-performing sales team. Salespeople should be encouraged to share insights, challenges, and best practices with their colleagues. Regular team meetings, both formal and informal, can facilitate knowledge sharing and foster a sense of unity. Additionally, ensuring that sales teams have access to collaboration tools and platforms can streamline communication and enhance efficiency.

5. Sales Strategies and Tactics

Sales strategies and tactics are the core components of any successful sales planning process. They provide a roadmap for how a company will approach its target audience and convert prospects into loyal customers. In this section, we will delve into various aspects of sales strategies and tactics, highlighting their importance and how they contribute to the achievement of sales goals.

5.1 Choosing Sales Strategies

Choosing the right sales strategies is a critical decision that can significantly impact the success of your sales plan. Sales strategies encompass the broader approach your company will take to reach potential customers. These strategies may include:

  • Direct Sales: A strategy where your sales team directly engages with potential customers, either in person or through phone calls.
  • Content Marketing: Leveraging valuable content to attract and nurture leads through blog posts, videos, and webinars.
  • Social Selling: Using social media platforms to connect with prospects, build relationships, and showcase your products or services.
  • Partnerships and Alliances: Collaborating with other businesses to expand your reach and tap into new customer segments.

The choice of sales strategies should align with your target audience, industry, and overall business objectives. It’s essential to evaluate the effectiveness of each strategy and adapt them as needed to maximize results.

5.2 Sales Tactics and Techniques

Sales tactics are the specific actions and techniques your sales team employs to engage with prospects and guide them through the buying process. These tactics play a crucial role in converting leads into customers. Some common sales tactics include:

  • Cold Calling: Initiating contact with potential customers who have not expressed prior interest in your product or service.
  • Product Demonstrations: Showing how your product works and addressing potential customer concerns.
  • Negotiation and Closing Techniques: Persuading prospects to make a purchase through effective negotiation and closing tactics.
  • Upselling and Cross-Selling: Offering additional products or services to existing customers to increase revenue.

Effective sales tactics require a deep understanding of customer needs and the ability to build trust. Sales teams should continuously refine their techniques based on feedback and changing market dynamics.

5.3 Sales Funnel Management

Sales funnel management involves tracking and managing prospects at different stages of the buying process. It’s a critical aspect of sales planning as it ensures that potential customers are nurtured and guided toward making a purchase. The sales funnel typically consists of stages like awareness, consideration, and decision-making.

Effective sales funnel management includes:

  • Lead Qualification: Determining which leads are most likely to convert into customers.
  • Lead Nurturing: Providing valuable content and information to guide leads through the funnel.
  • Sales Conversion: Converting qualified leads into paying customers through targeted sales efforts.
  • Customer Retention: Ensuring customer satisfaction and encouraging repeat business.

By understanding the dynamics of the sales funnel, businesses can optimize their sales processes for higher conversion rates and revenue growth.

5.4 Inbound vs. Outbound Sales Approaches

Sales planning also involves deciding between inbound and outbound sales approaches. Inbound sales focus on attracting customers through valuable content and personalized experiences. In contrast, outbound sales involve proactive outreach to potential customers.

Both approaches have their merits. Inbound sales often lead to highly qualified leads, while outbound sales can generate immediate results. The choice between the two depends on your target audience, industry, and resources.

5.5 Personalization and Customer Engagement

Personalization and customer engagement are integral to modern sales strategies. Customers expect tailored experiences and solutions that cater to their unique needs. Personalization involves:

  • Customizing sales pitches and offers based on customer preferences.
  • Leveraging data and analytics to understand customer behavior.
  • Engaging in meaningful conversations and building relationships with customers.

Effective personalization and customer engagement can lead to higher conversion rates, customer loyalty, and long-term business success.

6. Budgeting and Financial Planning

6.1 Creating a Sales Budget

Creating a sales budget is a fundamental step in the sales planning process. It involves meticulously outlining the financial aspects of your sales strategy. To begin, you need to set clear and achievable sales goals. These goals should be specific, measurable, and aligned with your organization’s overall objectives. Once your goals are established, you can start estimating the costs associated with achieving them. This includes expenses related to marketing campaigns, sales team salaries, technology tools, and any other resources required for sales activities. A well-constructed sales budget serves as a roadmap, ensuring that your sales efforts are financially sustainable and in line with your revenue projections.

6.2 Sales Forecasting Methods

Sales forecasting is a critical aspect of budgeting and financial planning. It involves predicting future sales based on historical data, market trends, and other relevant factors. There are various methods for sales forecasting, including quantitative methods like time series analysis and qualitative methods like expert opinion. Effective forecasting helps you make informed decisions about resource allocation, inventory management, and production planning. It also provides insights into potential revenue streams and helps identify growth opportunities. By employing accurate forecasting methods, you can optimize your budget and allocate resources more efficiently.

6.3 Resource Allocation in Sales Planning

Resource allocation in sales planning is about distributing your budget and resources strategically to achieve your sales goals. It involves making decisions about how to allocate funds among different sales channels, marketing campaigns, and sales team activities. Prioritization is key here—determine which areas require the most investment and which can operate with leaner budgets. Resource allocation should align with your overall sales strategy and goals. It’s an ongoing process that requires periodic reviews and adjustments as market conditions change.

6.4 ROI Analysis for Sales Initiatives

Return on Investment (ROI) analysis is a crucial component of financial planning in sales. It involves evaluating the effectiveness of your sales initiatives and marketing campaigns. By measuring the ROI, you can determine which activities generate the most revenue and which ones may need adjustments or reallocation of resources. ROI analysis helps you identify high-performing strategies and optimize your budget allocation to maximize profitability. It’s a data-driven approach that empowers you to make informed decisions about where to invest your resources for the best returns.

6.5 Contingency Planning and Risk Management

Contingency planning and risk management are essential elements of financial planning in sales. While you create a budget and allocate resources, it’s crucial to consider potential risks and uncertainties that may impact your sales plan. This includes market fluctuations, unexpected events, and competitive challenges. Developing contingency plans involves outlining strategies to mitigate risks and adapt to unforeseen circumstances. It’s about being prepared for the unexpected and having backup plans in place to ensure your sales objectives can still be met even in challenging times. Risk management is an integral part of maintaining the financial stability of your sales operations.

7. Sales Plan Implementation

After meticulously crafting your sales plan, the next crucial step is its implementation. This phase involves turning the well-thought-out strategies and objectives into tangible actions. Successful sales plan implementation is the bridge that connects your vision to reality, and it’s where your sales team’s efforts translate into results.

7.1 Putting the Sales Plan into Action

Putting the sales plan into action requires clear communication and alignment within your sales team. It starts with a detailed roadmap that outlines the specific steps and tasks needed to achieve the set objectives. Each team member should have a clear understanding of their responsibilities, timelines, and performance expectations.

Effective execution also involves monitoring progress regularly. By tracking key performance indicators (KPIs), you can identify potential bottlenecks and areas that require adjustment. Flexibility is essential in this phase, as it allows you to adapt to unforeseen challenges and changing market conditions.

7.2 Sales Team Roles and Responsibilities

A well-defined sales plan should include a section detailing the roles and responsibilities of each team member. This clarity ensures that everyone knows their part in achieving the collective sales goals. Roles may vary from sales representatives who engage with prospects to sales managers who oversee team performance.

Team members should be aware of their individual targets, and there should be a mechanism for accountability. Regular meetings and reporting structures can help keep the team aligned and on track.

7.3 Sales Pipeline Management

Sales pipeline management is a critical aspect of implementation. It involves visualizing the various stages of your sales process, from lead generation to closing deals. Each stage should be well-defined, with specific criteria for moving prospects from one stage to the next.

Effective pipeline management allows you to prioritize leads, allocate resources efficiently, and forecast revenue more accurately. It also helps in identifying areas where prospects may be getting stuck or dropping out of the sales funnel, enabling you to make necessary adjustments.

7.4 Lead Generation Strategies

Lead generation is the lifeblood of any sales plan. Implementing lead generation strategies involves identifying and reaching out to potential customers who are interested in your products or services. This can be achieved through various methods, such as content marketing, social media campaigns, networking, and more.

The choice of lead generation strategies should align with your target audience and sales goals. Implementation may require creating compelling content, running ad campaigns, or nurturing leads through email marketing and follow-ups.

7.5 CRM Systems and Sales Automation

To streamline sales plan implementation, many businesses leverage Customer Relationship Management (CRM) systems and sales automation tools. CRM systems help in managing customer data, tracking interactions, and organizing leads. They provide insights that can inform decision-making and improve customer relationships.

Sales automation, on the other hand, can handle repetitive tasks, such as email follow-ups and appointment scheduling, allowing your sales team to focus on high-value activities. The integration of CRM and automation tools into your sales plan can enhance efficiency and productivity.

8. Performance Evaluation and Analysis

Effective performance evaluation and analysis are essential components of successful sales planning. This stage allows businesses to gauge the effectiveness of their sales efforts and make informed decisions for improvement. In this section, we will explore various aspects of performance evaluation and analysis within the realm of sales planning.

8.1 Key Performance Indicators (KPIs) in Sales

Key Performance Indicators, commonly known as KPIs, are measurable metrics that provide valuable insights into a company’s sales performance. Sales planning involves the identification and tracking of KPIs relevant to the organization’s goals. These may include metrics such as revenue growth, conversion rates, customer acquisition cost, and customer lifetime value. By monitoring KPIs, businesses can assess the progress of their sales initiatives and make data-driven adjustments to their strategies.

8.2 Assessing Sales Team Performance

The performance of a sales team is a critical factor in achieving sales objectives. Sales planning necessitates a systematic approach to assessing the performance of individual team members. This evaluation considers factors like sales targets met, customer satisfaction, and adherence to the sales plan. Effective assessment enables managers to identify top performers, provide targeted coaching for improvement, and recognize areas where additional resources or training may be required.

8.3 Sales Data Analytics and Reporting

Data analytics plays a pivotal role in sales planning. It involves the collection and analysis of sales data to gain actionable insights. Advanced tools and technologies allow organizations to track customer behavior, sales trends, and market dynamics. Sales data reporting provides visibility into what is working and what needs adjustment within the sales plan. It empowers decision-makers with the information needed to refine strategies, allocate resources wisely, and seize new opportunities.

8.4 Sales Meetings and Reviews

Regular sales meetings and reviews are integral to the performance evaluation process. These gatherings bring together sales teams, managers, and stakeholders to discuss progress, challenges, and opportunities. Sales planning includes scheduling structured meetings to review KPIs, share best practices, and strategize for the future. These meetings foster communication, alignment, and a collective commitment to achieving sales goals.

8.5 Continuous Improvement Strategies

Continuous improvement is a fundamental principle in sales planning. Businesses must be agile and adaptable to evolving market conditions. Sales planning involves the identification of areas for improvement based on performance data and feedback. Implementing continuous improvement strategies ensures that the sales plan remains dynamic and responsive to changing customer needs and competitive landscapes. This iterative approach enhances the effectiveness of sales efforts over time.

9. Adapting to Changing Markets

In the ever-evolving landscape of business, adaptability is the key to survival and growth. Adapting to changing markets is a fundamental aspect of effective sales planning. This section explores various strategies and considerations for staying agile in the face of market dynamics and shifts.

9.1 Market Dynamics and Shifts

Market dynamics and shifts refer to the continuous changes in customer preferences, economic conditions, and industry trends. Sales planning must encompass a thorough understanding of these dynamics. Regular market analysis and monitoring are essential to identify emerging trends and opportunities. By staying attuned to customer demands and industry shifts, businesses can adjust their sales strategies and product offerings accordingly.

9.2 Agile Sales Planning in a Dynamic Environment

Agility is a core principle of successful sales planning in a dynamic environment. This involves having the flexibility to pivot quickly in response to market changes. Sales teams should be empowered to adapt their approaches, revise targets, and explore new sales channels when necessary. Moreover, the adoption of agile methodologies in sales planning allows for iterative improvements and quick decision-making to address evolving market conditions.

9.3 Competitive Analysis and Benchmarking

A vital component of adapting to changing markets is conducting competitive analysis and benchmarking. This involves evaluating how your competitors are responding to market shifts and identifying areas where you can gain a competitive edge. By benchmarking your sales performance against industry leaders, you can identify gaps and opportunities for improvement. Continuous monitoring of the competitive landscape enables you to fine-tune your sales strategies for maximum effectiveness.

9.4 Market Expansion and Diversification

Diversifying into new markets or expanding your product/service offerings can be a strategic response to changing markets. Sales planning should include an assessment of potential growth areas and the development of strategies to enter or expand in these markets. Market diversification spreads risk and can provide a buffer against market downturns in specific sectors. However, it should be approached with a well-thought-out plan to ensure success.

9.5 Crisis Management in Sales

In times of crisis, whether it’s an economic downturn, a global pandemic, or other unforeseen events, effective crisis management is crucial for sales planning. Businesses need contingency plans that outline how to adjust sales strategies, manage resources, and communicate with customers during challenging times. Crisis management in sales requires a rapid response to mitigate negative impacts and, in some cases, seize new opportunities that may arise during crises.

10. Conclusion

In conclusion, the world of Sales Planning is an ever-evolving landscape, one where adaptability and foresight reign supreme. The journey we’ve undertaken in this article has shed light on the critical role Sales Planning plays in modern business strategies. We’ve explored its fundamentals, from setting clear objectives to conducting market research, assembling high-performing sales teams, and devising effective strategies.

Yet, our exploration is far from over, for Sales Planning is not a static process. It’s a dynamic force that requires constant refinement and adaptation. As we look to the future, we see the integration of technology, data-driven insights, and sustainable practices becoming pivotal in Sales Planning. The successful organizations of tomorrow will be those that embrace change, leverage innovation, and continue to prioritize Sales Planning as the compass that leads them towards enduring success.

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FAQs

Q1. What is the primary goal of Sales Planning?

The primary goal of Sales Planning is to strategize and optimize sales efforts to achieve revenue targets while aligning with the broader objectives of the business.

Q2. How does market research contribute to Sales Planning?

Market research provides crucial insights into customer preferences and competitive landscapes, enabling businesses to tailor their sales strategies for better results.

Q3. What role does technology play in Sales Planning?

Technology facilitates data-driven decision-making, enhances CRM capabilities, and automates sales processes, increasing efficiency and effectiveness in Sales Planning.

Q4. How often should a Sales Plan be updated?

Sales Plans should be regularly reviewed and updated to adapt to changing market dynamics, typically on a quarterly or annual basis.

Q5. What are the consequences of neglecting Sales Planning?

Neglecting Sales Planning can lead to missed opportunities, inefficient resource allocation, and a disconnect between sales efforts and overall business goals.

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Team EMB
Team EMB
We are Team EMB the voice behind this insightful blog.

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