We’ve all been there. A sales forecast is done and a corresponding sales quota set for a quarter or a year.
About four-fifths of the way through that sales period everyone realizes that without a few miracles the quota will not be met. In the last few weeks, miracles are indeed brought about—and the sales quota is achieved. The champagne corks pop. Bonuses are issued. Executives are happy. Everyone has a job for at least another quarter or year.
It only hits everyone afterward how expensive this kind of operation actually is. To get those deals in the door on time unusual discounts and terms were given, lowering profit. With the sudden and unusual influx of business delivery areas—shipping, installation—are overwhelmed to the point of making mistakes or at the least falling behind on promised schedules. Customer service and support cannot keep up with the sudden skyrocket inactivity. Accounting is slammed with having to manually input special discounts and terms for this sudden rush of orders. Complaints start coming into the sales reps: “You sold it to me—now where is it?” or “Why did I get the wrong thing?” or “This isn’t the price you said I would get!!” or worst of all, “This isn’t what you promised me so I’d buy right then—the order is canceled.”
This way of conducting business is also something your customers will become wise to; they’ll wait to purchase until the end of a sales period knowing they can get a better deal.
Taking a very broad look, this is actually a problem of accurate sales forecasting. Forecasting is, of course, the accurate prediction of what deals will come in the door and when. But—and this is what many seem to miss—sales forecasting also includes the method of operation taken by the sales force.
Everyone on the Same Page
That operation, of course, begins with the members of the sales force all moving in the same direction and taking the same steps with their sales. This is the sales process. To the degree that this is done, the prediction of sales is more accurate. To the degree, it is not done and everyone is moving in different directions, forecasting becomes more guesswork and hope rather than predictable.
Measure of Progress
Accurate sales analytics are used to measure progress through the sales process. Not only do accurate metrics make it much more possible to control and manage sales—both from a sales management and salesperson view—they lay the very foundation for accurate forecasting. Such forecasting can only be accomplished with real data which comes about through precise metrics.
An intuitive, flexible CRM solution is obviously crucial bringing about both of the above.
Changes in Thought
Establishing and accurately measuring the sales process will bring a company quite a ways toward accurate forecasting—but without a radical change in the way everyone thinks about a sales period, the problem still won’t be solved. It must become an individual goal for everyone to actually predict and close deals regularly all throughout the sales quarter or year instead of all at once near the end.
This might mean getting creative, doing something like offering incentives for early closes, or establishing penalties for coming in late with special discounts or terms, or setting quotas for smaller periods throughout the quarter with incentives to meet them. But the idea is to get everyone operating consistently throughout the sales period so that it’s not such a crunch at the end, and so that forecast targets can actually be achieved with minimal stress on the company and without lost profit.
So if your company is having to scramble madly at the end of every sales period, take a look at the above broad steps. It’s a company-wide decision and operation to bring about accurately made and smoothly met sales forecasts. It can be done, and you’ll be very happy you did.
What kind of CRM solution totally integrates your sales process and provides accurate sales analytics? Check out one of our free webinars and find out.