July 14, 2020
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
|NEED - DESIRE||TIMESCALES||BUDGET||MAN|
- 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
- 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
- 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.