The Secret of an Accurate Sales Forecast

In my post “If you Want to Be Promoted then Correct Your Sales Forecast” I talked about the importance of not only hitting Quota but doing so in such a way that you become regarded as being highly consistent and predictable. CSO’s, VP’s and Sales Directors will look for this trait in salespeople who aspire to management. Please don’t underestimate it’s importance, the consequence of missing a sales forecast can be severe and if you don’t get it right you could find yourself being dragged into the downward spiral of micro-management and spending far too much time on forecasting to the detriment of coaching your team. Therein lies the secret … effectively coaching your team.

The balance of power between the salesperson and customer has changed significantly in recent years, it’s swung heavily in favour of the customer. Technology is acting as an enabler, buyers are much further through the buying process before they engage with you and they are much more informed than in the past. The result creates a situation where salespeople are unable to assert control over the sales cycle, the customer will always follow their buying process whether you like it or not (and rightly so).

This is what creates many forecasting challenges, salespeople simply don’t understand the customers buying process well enough in order to truly know when the customer will be ready to buy, they either :-

  1. Believe that they understand the process well but have failed to validate it effectively with multiple sources.
  2. Make the naive assumption that the customers buying process will naturally mirror their sales process. Oh no it doesn’t !

The most successful salespeople in today’s environment are those who collaborate with their customers, they add insight and deliver value as part of the buying cycle long before whatever the customer is buying is delivered. They are supported by a manager who is an effective coach. Not only are these salespeople the ones who beat their quota, they are the ones who will also tell you exactly when they are going to do so. All the while their coach is supporting, testing, stretching and looking for ways to help the salesperson improve.

The secret of an accurate sales forecast really is not some magic equation, you are not looking through a “crystal ball” or reading the “tea leaves”. An accurate forecast is the result of strong qualification, a clear understanding of your customers buying process, their reasons for buying and a joint commitment to move ahead. You have gained a superior level of understanding of your customer and are moulding your sales process to match their buying process precisely. When you operate with this mindset then creating consistently accurate forecasts is easy, it’s a by-product of how you sell.

Here are five suggested situations that should exist with your customer in order for you to feel comfortable about forecasting accurately, make sure that your coach (manager) is regularly asking these questions of you, keeping you honest and suggesting potential ways that might help you move forwards. If all of these exist then your opportunity is in great shape :-

  1. Has your customer explained why they are buying from you in their own words, do you know and can you quantify the outcome they hope to achieve. Does you customer clearly understand the impact on them of delay or no decision ?
  2. Do you understand your customers buying process in detail. Have you verified every stage of the process with multiple stakeholders and spoken with all those involved ?
  3. Has your customer indicated their commitment to the sequence of steps required to conclude the buying process and the dates by which they are to take place. This is of huge importance … I said “has the customer committed”, that doesn’t mean have you assumed that the customer is OK with your sequence!
  4. Do you have access to and have you spoken with the ultimate budget holder or sign-off. Are they happy and expecting to make the purchase ?
  5. Has the customer formally agreed to a date in the future, following purchase, when some form of event will take place (Delivery, Training, Consulting Engagement etc.)

What are some others that I have missed, I’d love to hear your thoughts ?

Who’s Responsible for Your Personal Development ?

Let me let you in on a little secret … the answer to the question is “you“.

A 2014 research survey by Bamboo HR published in Inc. magazine states that the number one reason that people leave companies is due to lack of advancement or development opportunities. I’ve no doubt that you will also be familiar with the phrase “People don’t leave companies they leave managers”, a well-worn statement that is often substantiated in HR exit interviews.

These two points are undoubtedly connected and the uncomfortable truth is that unless you work for a great leader who believes in you and consciously invests in your future, you are unlikely to be afforded the development opportunities that you crave. It’s a crying shame but that’s the reality for many of us in today’s workplace.

Now given this situation each of us have a choice to make :-

  1. Accept this unfortunate state of affairs and while frustrated with the situation, it’s outside of your control. Although you know the frustration will chip away at your confidence and reduce your motivation, there’s nothing you can do about it other than complain and moan to anyone that will listen.
  2. Accept the unfortunate state of affairs but as you’re so frustrated by the situation you decide to take things into your own hands and be accountable for your own development. You are buoyed by the fact that you have taken control and are steering your own development, you can overcome the frustration because you know where you are heading.

Again, the harsh reality is that the majority of average salespeople, either consciously or subconsciously, choose option one.

Those of you who are determined that you will be one of the few to make choice number two then read on, there are a number of simple steps that you can take to support your own development and it doesn’t have to cost the earth. Here’s three tips for those of you looking to develop yourselves on a budget :-

Develop a Reading List

Pound for pound, a book is the most valuable investment that you can make in yourself. Ensure that you consciously read (don’t speed read taking little in) and apply the teachings into your day-to-day work. You’ll be amazed at what you can learn for a few pounds and a little investment in your time. Here’s my top 5 to get your started :-

  • Drive – Daniel Pink : The secrets to human motivation (and it’s not what you think)
  • How to Lead – Jo Owen : An incredibly valuable resource for people new to Leadership, if you are a new manager get this book.
  • Perform – Keith Hatter, Chris Shambrook and Jim Constable : How to get better at what you do by obsessing over the right things.
  • Winning Teams, Winning Cultures – Larry Senn and Jim Hart : How culture impacts individual, team and operational effectiveness.
  • Switch – Chip & Dan Heath : Simple methods on “How to change things when change is hard”

Get Active on Social Media and Use Evernote

There is a huge amount of material available via Social Media Channels that can help you learn and develop knowledge of just about any subject. Spend some time searching Twitter and LinkedIn for the experts who publish material on subjects you want to learn about, follow lots of them and spend 10 minutes each morning saving articles to Evernote for you to read at a later date. This is so easy to do, simply add the Evernote Web Clipper to your web browser and a single press of the button will save the page/s for you to read at a later date. If you add the Evernote app to your Mobile Device then you can catch-up on reading during your commute each morning or evening (that is if you use the train, please don’t do this if you drive!)

Put your Headphones on. Watch, Listen and Learn

Hearing different perspectives, sharing and learning from others is a great way of developing yourself. YouTube, TED Talks and PodCasts are just three remarkably simple ways of learning from others. Again, spend a little time searching for the people with something valuable to say, follow them and then watch TV – who thought learning could be so easy !

Finally, the most important tip of all, TAKE ACTION … put some time aside every single week and block the slot/s in your diary. It’s too easy to let deadlines and the pressures of beating quota take precedent over developing yourself. But as I said at the beginning of this post, you’re responsible, so stand out from the crowd and make sure that you take control.

The Critical Importance of White Space when Selling to Complex Customers

Everyone’s aware of the old adage “it’s far more expensive to win new customers than to expand current customers”, it’s certainly true. It’s also true that lower than ideal customer retention rates will act as a significant brake on your company’s growth aspirations, you must stop competitors poaching your customers.

The solution to both of these situations is “White Space”, or more appropriately, filling the “White Space”.

What on earth is “White Space” I hear you ask ? It’s simply the area of an organisations structure that remains unchartered territory in your customer plan. The people, teams, offices or divisions that, so far, you’ve not engaged in any form of conversation or relationship. In the majority of B2B selling situations there is more white space in a customer relationship than salespeople realise. The best way of keeping a customer engaged and locking out your competition is to be constantly striving to add value (selling) into the white space and then to bring those peers across the customer together so that they realise the value delivered. Sounds easy I here you say.

Actually it’s far from easy and it takes a huge amount of time to amass the insight and knowledge that will help you build value. All of the reputable Sales Methodologies (Miller Heiman, Holden Powerbase, TAS etc.) have tools to help you map people across your customer and asses their power or influence. They all work very well but you can just as easily build your own visual map of the organisation and set yourself a goal of filling the white space.

Here’s how to get started. Build a spreadsheet that represents your customer, across the top of the spreadsheet (X Axis) list the different teams, divisions or business units. In the 1st Column (Y Axis) list all of the roles or job titles that you are able to sell to. Don’t just include the Executive Decision makers, add all levels of seniority. You need to cover them all (See my post : The Hidden Dangers of Selling to Senior Executives). Use as many cells as you need in order to build an accurate picture of your customer.

Now here’s where the fun starts. Add the names of the individuals that represent each role or title for each of the business units in the appropriate cells. Where you don’t know the name of the individual leave the cell blank. Where you do know the individual’s name, colour code the cell using the following key :-

1. Green : Open Access, regular communication and engaged with your company. Can be a coach to you.
2. Amber : You’ve met the individual but they’re not engaged and you don’t have regular access. Not a coach or supporter.
3. Red : No communication, access or engagement.

Once you’re complete, you’ll have an immediately recognisable organisation map that very quickly identifies where you should focus your efforts. I would hazard a guess that you have far more Red & Amber cells than Green and that the mass of white spaces was a surprise you too.

Now the most important step, TAKE ACTION, there is simply no point doing all of this work and not picking up the phone, it’s crazy, but believe me it happens ! :

1. Ensure that no white space exists, that you have names for everyone that you are able to sell to logged in your CRM and they are being marketed to appropriately.
2. Build a plan that turns the cells in Red, through Amber to Green ideally using referrals and introductions from other “green people” in your organisation map.

Disciplined execution of the plan will see you gain greater insight into your customer with a wider, stronger relationship base. Sales will grow, retention remains strong and you will be making the barriers to entry for your competitors much higher !

If You Want to be Promoted then Correct Your Sales Forecast

Just the mention of the word “forecast” brings many salespeople and sales managers out in a cold sweat, it’s the greatest source of tension in the sales team and has far more time spent on it than is productive.

For a moment let’s consider the objective of the sales forecast. It’s simply the leading indicator that shows how the business is performing vs. the sales target set in the financial plan. Are you on track vs. plan or do you need to make corrective inputs? What salespeople don’t often consider is that expenses are also forecast in exactly the same way, often much more accurately, and this enables the Profit & Loss forecast to be calculated. The P&L is the key financial document that management use to steer the business and investors/shareholders use to track progress.

Here’s where the tension starts … salespeople hate forecasting, they love to be the hero, keeping opportunities nicely hidden up their sleeve until the very last-minute and then producing a sale seemingly out of nowhere. It’s a way for the salesperson to manage the pressure and keep the spotlight away from them. See the image of the shell game, that’s exactly what’s happening.

You also encounter the exact opposite behaviour although less frequently, salespeople who are too bullish or simply don’t understand their business well enough to forecast accurately. The classic over promise and under delivering behaviour is a Sales Managers worst nightmare and needs urgent correction. Be careful though, it’s very easy to swing the pendulum too far and end up back in the “shell game” !

Accuracy is the critical key. As a salesperson, you generally don’t consider the issues that both of the behaviours above create, if left unchecked it causes really thorny problems for whomever owns the P&L. There are severe consequences to an inaccurate forecast :-

  1. If sales finish lower than forecast then your business may need to cut expenses to balance margins and profitability, not a pleasant position to be in.
  2. If sales finish higher than forecast, then your business could be investing even more resources to help drive growth faster, again not ideal.

The moral of the story, do your utmost to forecast accurately. Work hard to strike the delicate balance between forecasting low and playing the hero, or forecasting high and over promising. The sales people who stand out as the very top performers don’t just beat their target, they are reliable and deliver on their forecast accurately. When they do encounter an issue (and everyone will from time to time), they communicate fast and early, looking for ways to recover whilst always having the customers best interests at heart.

If you want to grow, develop and be considered for promotion then show your Manager, Director or VP that you have what it takes to manage your business well. To be regarded as being “at the very top of your game” develop a reputation for “doing what you say you will do”. This is when the career opportunity doors start to open up wide for you.

Watch out for a future post where I’ll talk more about how to forecast accurately and point out some of the pitfalls to avoid.

The Unseen Dangers of Selling to Senior Executives

If I had £1 for every sales person, sales team or indeed company that have challenged themselves with selling to the most senior executives then I’d be a very wealthy man. For many organisations selling to senior executives is regarded as the silver bullet, the remedy to all ills and the path to beating plan.

The reality is often very different.

Senior Executives are very busy people, often every minute of their working day is filled with back to back meetings. They run from one meeting to another without an opportunity to think, to grab a coffee or even speak to their assistant. I’m stating the obvious but their time is at a premium and if you are going to use any of a busy executives precious time then you’d best make sure that you use it well.

Salespeople are often buoyed by winning a meeting with a senior executive, they are so excited and eager to get started that they often fail to prepare effectively and the very important meeting with the executive turns out to be a big let down. Now, at this point, I fully expect you to be saying to yourself “that’s not me, I would never do that”. Really, can you say with absolute honesty that you always put the hours in to prepare effectively ?

Over the years I’ve lost count of the number of senior meetings that turn out to be single, one-off meetings with the salesperson unable to ever gain face time again. Your strategy of selling to senior executives has just backfired big time, rather than strengthening a relationship and opening the doors to future opportunities, it’s probably slammed those doors firmly closed. There’s lots of research into why this happens (The Challenger Sale is one good example) but it simply boils down to value delivered, or rather the lack of it, to the senior executive in the meeting.

In order to be in with a chance of selling to a senior executive you must have superior knowledge and insight, about their business not yours, these are table stakes when selling high. You should aim to be so well prepared that you feel you know as much about the senior executives business as many of their team members (and if you’ve played your part well, you will). You should have read every piece of available material that you can get your hands on, be up to date and following them on all of the social channels and here’s the counter-intuitive crunch … have met with and learned all that you can from their teams, peers and business partners.

If you are to deliver value to a senior executive then you must have knowledge that can only be gleaned from diligently working with their teams, the exact people who you may be trying to avoid by your selling high strategy ! Meeting with the whole decision-making unit is the only effective way of having enough inside knowledge to be able to ask thought-provoking questions that lead to success when you eventually meet with the senior executive.

There are no silver bullets in sales. Yes, selling to senior executives can be a performance game changer, yet the stakes are extremely high. You will not be successful if you take short-cuts, don’t do your homework or are not sufficiently informed. If you use the correct approach having put in the necessary hours of work to deliver real value (both business and personal – that’s a different story for a different day), then you will be in a strong position.

Get this wrong and you are very unlikely to get a second chance. Senior executives don’t waste their precious time on activities that don’t add value.

The golden rule when selling to senior executives – do not, ever, mention product. They don’t care, you will bore them and they will switch off. They will be kind, they will show you the door in a professional manner but please don’t think that you will ever be granted face time again. Only talk about their business, if you feel that you can’t do that with clarity and authority then please take my advice, step back until such time that you can.