Forecast Your Sales More Effectively

The 10 Commandments of Sales

I came across this article by Hanzo Ng, a renowned sales trainer. This is an amazing article discussing about forecasting in your sales and how to do it effectively. Here it goes ..

Scenario 1…
Sales Leader: “James, what’s your forecast for the next quarter?”
Sales Person: “It’s going to be RM125,000”,says hesitantly
Sales Leader: “Bravo James. I’m sure you will be able to achieve it.”

Scenario 2…
Sales Leader: “James, what’s your forecast for the next quarter?”
Sales Person: “It’s going to be RM125,000”,says hesitantly
Sales Leader: “give me proof”
Sales Person: “Err..”returns with a blank state.
The secret to forecasting, according to Hanzo is by having proof! You got to have data, information and proof!

Without proof, your sales team is merely wishing for the deal rather than winning the deal. If you open up your sales pipeline, you have two situations, one you don’t see much in there, meaning your sales people aren’t doing much sales activities like meeting more people or building relationship by following up.

Second situation, you have lots of prospect in the list, but you don’t know if they are qualified or not, so, you don’t know whether you should take out the prospect from your pipeline or not, and this is the killer of forecasting- the ‘maybes, maybe yes, maybe no, maybe don’t know. It’s good to have a yes or no but maybes mess up your forecast and plans.

You have six issues to worry about if your forecast is inaccurate;

1. Employee headcount- you don’t know if you should hire more people

2. Inventory – you don’t know if you should increase stocks

3. Marketing – you don’t know if you should launch another campaign

4. Revenue – without money in the bank, 1,2 and 3 can’t be done

5. Profits- no sales, no profits

6. Cash flow- don’t know when money is coming in? how do you know if you have the cash to run the company or department?

What’s the top cause of inaccurate sales forecast and pipelines?

Poor and incomplete sales qualification!
While meeting new people is important to fill the pipeline, no matter how good your closing skills are, how fantastic your products are, how persuasive your sales your sales people are, you will never or seldom get sales from unqualified prospects. These are the people who have no need of your products, they just want to see what’s available, as much as they want your stuff, they have no money to buy it, or they are sticking their neck out for their existing vendor and they will only switch if their current vendor is not capable to deliver.

As a sales leader, you probably want to see activities that will lead to sales. True. Additional question to you is, what kind of activity are my sales people doing? Who are they meeting? Do they have strong need? Do they have a strong business issue that you can solve? Do they trust you enough? Do they have the money? Are you well positioned against your competitor s? Can this person you are meeting with influence the sale and move it forward?

There are dozens of questions you need to ask yourself and the team to make sure your forecast is accurate.

Remember this, accurate forecast = proof/information. The more you have, the more accurate it will be.

Hanzo Ng is also the author of Secrets of the Sales Ninjas. He has been called the most influential ‘sales trainer’ by his participants and is highly demanded for his Sales ninjas programs.