How much revenue will you generate this quarter? How many leads or prospects will you convert from your sales funnel?
Are these questions being properly addressed by your sales manager?
The reason behind continuous failure is due to poor vision in projected sales which is an outcome of the out dated sales forecasting methodology. Accurate and efficient forecasting has always been a major concern for sales reps lagging behind their sales target. Studies have shown that “74% of sales leaders felt their company’s sales forecast were either only somewhat accurate or, in worst-case scenarios, not accurate at all.” Thus, a sales methodology without a proper sales forecast in place tends to degrade the quality of your team performance.
Most of the companies typically follow gut feelings of their sales reps and sales manager to forecast the sales in the coming quarter. This is where such organizations take a back seat for their competition as the sales managers are unable to solve the issues arising in their pipeline. Moreover organizations use ill-suited solutions which are not generally designed for forecasting and thus providing unhealthy results. Due to such activities most of the sales manager are unable to spend time on important activities such as regular review meetings, monitoring and mentoring, coaching and training etc. and are mostly occupied managing the pipeline and fixing the forecasting results.
Obstacles to efficient sales forecast process
Gut based approach: Predicting monthly achievements and ROI on intuition can hamper your sales process. With this technique you will always lack the capability to untangle the loops in your existing strategy.
Insufficient information: Due to insufficient information, sales reps go through a phase where they face incompetencies in finding out the right requirement of the target market.
Manual process: Using a manual process for forecasting sales can be one of the major barrier in achieving success in sales career. Thus, sales reps do not have any intelligence in their planning process.
Lack of real-time data: The ability to see the future can only be unravelled through the real-time data available in the sales crm or the sales software. Lack of real-time data creates a dent in the performance visibility which ultimately slopes down the sales graph.
Lack of accountability: Inefficient sales forecasting process can provide a way to sales reps for manipulating their poor performance data.
Thus, efficient forecasting process is considered as a prudent way to plan and implement strategies. It helps in managing risks by providing appropriate budgeting and goal setting parameters. Since, the data-driven sales forecast helps in achieving sales success and addressing issues on a real-time basis it is advisable for organization to define their sales goals and align them more accurately with sales forecast to ensure that everyone in the team understands and buys the new process.
What’s more important in today’s competitive environment is the kind of USP your sales methodology demonstrates. Refurbishing the old sales forecast process making it more data-driven can naturally help sales reps in curbing the root cause of poor conversions. Data-driven sales forecast is a proven methodology to attain immediate and accurate outcomes by reducing risk and identifying opportunities.
The approach is simple yet complex. Simple in a way that you have to certainly use data-driven sales forecasting in order to achieve better & informed results, and complex because forecasting is not an easy task. But over here, everything is sorted as we discuss how to create data-driven sales forecast with these 6 smooth steps
5 Simple Steps to a Data-driven sales Forecast
Define the opportunity stages: In order to forecast more accurately, it is important for sales managers to create a process that clearly explains the stage where buyer exactly is. Your sales rep must be following a particular strategy to target their prospects but as a sales manager it is more than important to understand the willingness of the buyer after each stage. Thus instead of the actual nurture cycle you can include stages like: Call Confirmation with Sales rep, Attended a Demo and agreed for a consultation, Reviewed existing business strategy and inquire for suitable offering, and agrees to offering with/without some changes. Thus all these steps support actual data from your prospects giving you a better visibility of your pipeline.
Keep a track on historical data: In order to perform forecasting efficiently, it is of utmost importance for managers to keep a track on the existing history of the accounts. With this kind of practice they have the capability of defining their prospects needs in advance. History of the past data helps the reps in keeping a close track over the underlying opportunity from a particular account.
Define key performance metrics: Accepting the gut based reports each month can create a very inaccurate sales forecast where the reps do not have any idea about the amount of business that they will generate in a particular month. Thus, predefining some key metrics can be beneficial in setting the monthly or quarterly goals. Also, limiting the metrics to some important function can be of great help to reps as they have a clear view on the kind of effort that they have to put in on an individual metric.
Differentiate funnel review with forecast meeting: Though funnel review meeting is much similar to sales forecast meeting. It should be clearly understood that the funnel review meeting defines the stages of a lead or prospect and helps in creating strategies for faster conversion. When it comes to the sales forecast meeting, it is considered as a method to help reps in having a clear picture of the ROI that they will generate through each account. While the funnel review meeting can be done on a monthly basis, it is advisable for managers to conduct weekly sales forecast meeting for the complete team to make the reps aware of their individual goals and steps they should take to add more prospects to their bucket.
Be close to your reps and closer to their forecasts: Sales rep usually enters the date when they expect that a particular deal will certainly see through their funnel. Thus as a sales manager you can make a note of sales rep who are able to record closures on the date mentioned by them and even those who are still running and changing their previously mentioned dates. With this concurrent data you will be able to analyze the results in a much better way and your sales rep will be answerable for the time taken to achieve closures.
As a sales manager you need better forecasts results that will not only help to beautifully manage your team but will also hit the revenue button for your organization. What’s your say on this? In case of any comments or even compliments, please add them in the section below.