Most sales managers agree that sales forecasting is a cumbersome task and many fail to see the benefit in a process that is by and large, a guessing game. The truth is, sales forecasting should not rely upon a hunch and must be done consistently to fully realize its value. Done correctly, sales forecasting can provide valuable insight that allows organizations to make strategic decisions on how to effectively manage the business.
One thing that sales leaders may do is use sales forecasting to help develop a sales strategy. This is a practice that may ultimately lead to unrealized profits and disillusioned sales professionals. Your organization must have an effective sales strategy in place in order to develop sales forecasts that are more accurate and beneficial to the organization.
Another thing organizations should do when forecasting is to analyze not only what the sales professionals have done in the past, but what their clients are doing now. Think about how your current clients decided to go with your business. If you can clearly understand how clients make their decisions and what stages along the sales process the decisions are made during, then you will be more likely to develop a forecast that accurately represents the sales potential.
Keep it simple and consistent. In order for sales forecasting to provide accurate data to help the organization, it helps to keep your forecasting model similar year over year. Developing a standardized format which doesn’t require a statistician to analyze will ensure your organization can quickly and easily review the forecasts and improve the way the organization manages its sales force.
It’s important to keep in mind that good sales forecasting requires flexibility on the part of the organization. Once your organization develops a sales forecast, it’s essential to revisit it throughout the year. You may need to edit a particular portion of the forecasting due to an unforeseen economic change, or maybe you have more data about when in the sales process you get the most closures that enables you to refine your forecast to increase the accuracy. It’s a great idea to schedule time in your calendar each month to review the forecast and ensure your team is on target and also develop new strategies or make educated decisions based on the data thus far.
Duane Campbell is a Global Accounts Manager for Jaroop, a web application development company that develops business intelligence, social interaction and client services for businesses. Jaroop is also the creator of the cloud based sales proposal application ClientSky, an online platform for professional service firms to generate, send and track sales proposals online. Duane can be reached at 860-357-2060 ext 302 or firstname.lastname@example.org.