A question most sales people get asked often, maybe dreaded by some. Surely this is one of the most important things which any CEO wants to know and what keeps him/ her awake at night.
Many of the senior executives whom I meet give this as their top priority. It’s so important, not just from a financial perspective but it drives so many operational parts of the business. Also, getting improving the forecast accuracy increases the stature of the sales operation, on the basis that ‘if they can get this right, there’s a good chance that the others things they’re doing, must be right too’!
So, it’s worth spending time on it.
The key thing behind accurate sales forecasting is the quality of the information which sales get about current prospective new business and then how they use this to make their judgements. Ensuring you know exactly what information is needed, and being comfortable that your sales process provides this are crucial stepping stones to improve forecasting.
I’ve heard Sales Directors say, ‘all opportunities must be put into CRM, otherwise they don’t count’. That’s fine as far as it goes, but unless sales staff are given clear instructions about what to enter, where and when, it will be chaos. All the opportunities will be there, but not worth the time taken to put them in.
Senior Management need to decide the key bits of information which sales are expected to get at each stage of the new business journey – and make it simple. Each business will know what these are and, for sure, some will be more difficult to get than others.
For example, to get the name of the decision maker may be relatively easy, but to understand the intricacies of the approval process and the politics surrounding it may be far more complex and requires a good rapport with the prospect. Getting a good feel for whether there really is an opportunity or not requires some digging and asking some tough, possibly uncomfortable questions. But that’s what selling is really all about.
In Summary, define precisely what you need to know (maybe no more 10 items) and spend time with sales to develop the ways in which questions can be framed to get the, sometimes difficult but important, information needed. Then watch your sales forecasting in CRM really improve.