Forecasting is one of the most important functions for a successful sales rep. Accurate forecasting ensures a rep is qualifying prospects appropriately, managing her/his time accordingly and allows the organization to properly forecast to management.
Forecasting will show management, which reps are in the field and those who are not. As a rep, forecasting needs to be looked upon as your barometer of how successful you are in your territory. Your forecast also becomes your guide to what your activity is generating in opportunities. My rule of thumb has been that you need to have 2 –3 times your quota in your forecast and funnel at any given time in the year.
If you honestly work with your forecast you know every day exactly where you are in your sales cycles with each account you are working on. You need to have a system that measures where each prospect is in your sales cycle. You need to show – Initial meeting, Demo of product or discussions of services, RFP and/or proposal stage, Decision to move forward, and Implementation date. By tracking each of these stages then you know what needs to be done to close the business, and more importantly to know how long this will take. If you have six prospects at the demo stage and it takes six months, on average, to close the business, then you are going to struggle for the next six months.
I remember being on a sales call with the VP of Sales and all his managers for North America. We were doing the forecast for the month we were in. Everyone on the call was asked to commit to the number they would close that month. They were asked to put their reputations on the line as to the number they submitted. At the end of the call the number was set at 17m. Two weeks later at the end of the month we finished the month at 12M. We were off nearly 30% on that month. It was very clear that the managers had no system in place to manage their forecasting.
If your organization does not formally do forecasts, you need to take the time to do a formal forecast for yourself each and every month. Without doing this you will struggle to be successful, as you will not know where you are in the sales cycle during the year.
Your forecast becomes your road map to success. If you track your travels and manage the daily routes you take, you will know exactly what you need to do to be successful. If you do not track your travels then you go to places that you were never expecting to go. This means that you will not make the money you are expecting to. It will result in you having gut wrenching meetings with your sales manager each month, attempting to explain what you have done last month and what you will be doing next month or the next 90 days.
I have been in sales for 20 years and during that period every time you get a new sales manager, you will get a new forecasting format to use. It will be important that you have your own system that you use and that works for you. You then take your consistent and known results and adapt them to the current tool that your company is using.
By doing this, and doing it honestly each month, you will increase your success ratio threefold. You will have meaningful discussions with you sales manager and most importantly, you will have conversations with your customer that are relevant and focused, as you work together to close the opportunity you are working on.
© 2011 by Bill Sayers. Bill Sayers is an inspirational speaker and a visionary business leader. He has spent the past 29 years in the “Sales” arena. He started his career as an inside sales rep and worked his way up the corporate ladder to the level of VP of Sales at an IBM company. During that time he worked for Revelstoke Lumber, King Products, Linotype, Ryder Transportation, GE Capital IT Solutions and IBM. Bill is able to communicate powerful concepts in a manner, which enables practical application in the business world and drives profitable results for his clients. His goal is to help sales people ignite their passion for the game of sales. For more on Bill Sayers, visit www.thesayersgroup.com
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