Does Your Sales Forecast Shrink?
Does your sales forecast shrink at the end of the month? In the final week of each month do the close dates for "solid opportunities" forecasted to close by end-of-month suddenly shift to a date in the future? It has nothing to do with George Costanza or cold swimming pools! Here's why sales forecasts shrink and what you can do about it.
1) Weak Sales Process - if you don't have a rigorous, milestone-centric sales process your salespeople are just guessing. How does your sales process stack up?
2) Happy Ears - your salespeople are overly optimistic and only hear the positive feedback (instead of the real feedback they need to pay more attention to). When they really want to believe an opportunity is moving forward they only hear prospect feedback that support that viewpoint.
3) Need for Approval - if it is more important for salesperson to be liked than win the business, they will avoid the tough, timely questions that create urgency for the prospect to make a decision to move forward. What happens without urgency? Stalls, put offs and delays!
4) Weak Accountability - ultimately it is up to the sales manager to hold their team accountable for a) following a rigorous, milestone-centric sales process; b) maintaining a healthy skepticism throughout the sales process; c) asking tough, timely questions to create urgency; and, d) be disciplined about what goes into the sales forecast.
I recently had an opportunity to talk about this topic on a podcast with Tim Hagen from Progress Coaching.
CEOs and leadership teams who can count on the accuracy of their sales forecasts - both in terms of total revenue as well as the timing of when that revenue will hit - can make better decisions about when to invest in operational capacity, when to hire people, when to increase or decrease marketing spending, etc. How accurate is your sales forecast? You can listen to our podcast on this topic here.