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 :-
- Believe that they understand the process well but have failed to validate it effectively with multiple sources.
- 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 :-
- 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 ?
- 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 ?
- 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!
- 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 ?
- 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 ?