In good times a sales forecast could be regarded as a rough road map.
In an extended period of economic uncertainty an accurate and authentic sales forecast is the shining light in the darkness…not just for internal purposes but also to manage external business relationships and expectations.
Major issues arise in dealing with inaccurate, disappointing or poorly judged sales forecasts; and these issues are compounded as a business will only truly know how accurate a sales forecast has been post event….unfortunately managing sales historically is rarely a wise option.
Things to consider:
- A sales forecast is a proactive, dynamic document, and should be referenced daily
- There should be a defined set of company wide criteria that everyone adheres to about what should be included in the sales forecast and what information should be obtained, i.e. quantity, order size, payment terms, delivery details, special conditions etc… obviously the more details the better
- Within any month, think about grading the prospects A, B, C. Therefore movement in the sales forecast is not just from month to month but from A to B to C (and potentially back again).
- Beware of the sales person who starts of with lots of A’s and B’ s sales prospects and ends up with lots of C’s at the end of the month. Poor judgement is very dangerous in a sales environment. Whilst their intentions will rarely be malicious, this type of behaviour could indicate their inability to close, ask smart questions or engage in details in specific sales conversations with the prospect.
- Equally, be wary of the sales persons forecast where the bottom line says £Xk will be delivered but they don’t know where from yet!!!
- A sales forecast is a document that is used to drive the rest of the business, manage resources, manage relationships with the bank, as a proactive decision-making tool – there are high levels of accountability attached to a sales forecast…and there should be high levels of accountability attached to poor reporting or false reporting
- Sales Managers often fall foul of believing the sales forecast – as a Sales Manager do what you need to do in order to convince yourself of the authenticity of the sales forecast before you put your name to it. This may include receiving indications of intent from the prospect, reviewing email trails, accompanying the sales person on key visits, speaking to the prospect about operational details…a careful hand is needed, of course. The cost of misjudging the sales forecast is all to well known by too many Sales Managers.
Carol Griffiths – Lead Consultant and Director
Morton Kyle Limited
0779 002 1885