November 22, 2021
Forecasting - why do we need to forecast? Because our sales manager says so? Well that is one reason but there are a few more.........
- We need to forecast sales so that we can:
- Plan the sales activity, manufacturing, cash flow, staffing, meet payroll, pay suppliers
- Build a real and adequate revenue pipeline
- Set priorities and "action manage"
Forecasting a sale
- You can only really forecast a sale when you have a qualified prospect
- With a qualified prospect you know:
- What the customer wants and you know you can deliver
- When the customer expects to place the order
- They have the budget and when you can invoice them
- The person you are dealing with has the appropriate level of authority
Qualification Matrix
|
NEED - DESIRE |
TIMESCALES |
BUDGET |
MAN |
| Forecast |
Y |
Y |
Y |
Y |
| Prospect |
Y |
Y |
Y |
? |
| Opportunity |
Y |
Y |
? |
? |
| Lead |
Y |
? |
? |
? |
- The qualification matrix is a simple way to see if you have a qualified prospect
- If you do not have a yes in all the boxes then you cannot forecast a sale
- Where you do not have a yes this becomes your advancement plan
Where forecasting fails
- Forecasting fails when you either do not have enough information
- Or you have the wrong information.
- Needs and timescales tend to be variables
- Where as budget and the decision maker/s tend to be constants
- You need to manage the constants but influenced the variables
Influencing need and timescales
- You can influence the need and timescales by understanding about them in greater depth
- The customer may want your product but why?
- Something has happened making them want or be interested in your product
- These are business drivers
- They want the product by a certain date or by a specific deadline - we call this the compelling event
Business drivers and compelling events
- Business drivers - something that is happening in the business that is forcing change or action
- Compelling events - the time or deadline by which the action must take place
- Establishing business drivers and compelling events will:-
- Enable you to forecast accurately - you know what will happen when
- Speed up the sales process - you can point out to the customer the consequences of missing the compelling event
- Let you set your priorities - you know the timescale the customer is working to, you can plan your activities accordingly
Summary
- You can only forecast when you have a properly qualified prospect
- The more objective information you have the easier and more accurate your forecasting will be
- Uncover the business driver and the compelling event
- Make sure that you differentiate between the two, there is sometimes a fine line
- The business driver and the compelling event give you the leverage to speed up the close
- Use forms and reports and keep rolling forecasts to assess progress and deals on the forecast for too long without being closed.
Posted in Articles. Tagged as business development, Power Base Selling, sales leadership, sales skills, solution selling.
