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Sales Leadership
Oct 19, 2009 | Bill Sayers lock

Do you give your forecast the focus and attention it deserves? If you are not honest and ruthless about your forecast-and at what stage it is truly at-how can you be successful? How you manage your forecast is usually a good indicator of how you manage your business in general.

What does your forecast tell you?
Your forecast is the direct barometer of what is happening and going to happen in your business. If you are not treating that as a priority and as a serious measurement in your success, then you are destined have a lot of disappointment.

I have been interviewing CEOs about the sales game. What they love most about sales people is their energy and their "do-what-it takes" attitude. The thing they dislike most about sales people is misinformation and inaccurate forecasting. The phrases I heard most often were: "overstating numbers,"fabricating of information" and "general BS." CEOs want honest and truthful answers because they manage their business based on actual results, not what sales reps think the results will be.

There is no secret to why the CFO rarely believes and, in fact, even more rarely uses sales reps' forecasted numbers. He/she use historic and trend numbers and gut feeling. Why do they do this? Because most sales forecasts are not even vaguely accurate.

Here is a tip for sales reps and managers: Go and talk with your financial people and ask them how they forecast. Then, take that information and use it in your own forecast. More importantly, turn it into a game and see how accurately your forecast can mirror your actual results. If you do one thing differently this year, I would suggest you manage your forecast like the CFO and see what happens. I can promise you that your CEO will wonder why you have become so accurate and may even ask you how you are doing it! (Also, read The Great Game of Business by Jack Stack. These sales reps must be accurate to within +/- 5% on a six-month rolling forecast, and they are.)

Why be accurate?
This sounds like a pretty simple question; yet 80 per cent of sales- people aren't in the ballpark most months when it comes to accurate forecasts. I would rather have management know I am going to miss my month's target before it happens than after the fact. Yes, I may have missed my target; however, management knows and can react accordingly from a cash flow, ordering and business standpoint. From management's perspective, it's a lot easier to manage knowing those issues versus having a warehouse full of products that didn't actually get sold.

More importantly, on a personal level, your accuracy allows you to react appropriately. If your forecast is low on revenue, you can get more business into your funnel. If you have a lot of business to finalize you can focus on that knowing that the next month or two will be slower as you complete all your deals. If you are fooling yourself about deals that will never close (or will not close for six months), then you're wasting time and giving your CEO even more reason to believe that the sales department doesn't know what will close.

Being accurate also gives you a confidence to manage your business base, set appropriate, expectations with clients, your sales manager and with your bank account. If you are unsure of a prospect's intentions you can ask them if they're going to purchase this month. If not, you can take them off your forecast and manage accounts that will close, or find new business that will close. If you're not honest about your forecast the only person you are kidding is yourself. Your sales manager, vice-president and CEO will all know your forecast can't be trusted.

Knowing your business
Set the expectation with yourself to be accurate and you will be. Period. Ask top performing reps why they are so accurate and what they do each month to manage their forecast. Great sales managers will challenge your numbers and accuracy. Pretend you're that sales manager and challenge yourself on your numbers and their accuracy.

What makes your forecast accurate?

  •  know your sales cycle
  •  have honest conversations with your customers
  •  know what you need to do to be successful with each deal you are working on.

To have sustained success you need to:

  •  organize and manage your daily activities
  • create a strategic plan for your top accounts and overall business.

If your forecast is not accurate, look at your activities and behaviours and determine what you need to change. If you are not prepared to change, then you'll keep returning your current results and disappointments. Are you ready to make that change

About the Author:

Bill Sayers speaks, coaches, leads education sessions and provides management consulting services to a variety of companies. For the past five years Bill has run his own sales consulting practice. He has recently completed the writing of his new book Funnels and Forecasts, The Great Game of Sales. He has been a professor at George Brown College teaching Personal Selling Skills to the Sports and Event Marketing Graduate Program, and is on the faculty of the Canadian Management Centre.


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