Sales forecasting

Words of Wisdom / By

Words of wisdom for this week.

“There’s only one way to succeed in anything, and that is to give it everything.”
– Vince Lombardi

Now more than ever, accurate sales forecasting is vital. To assume anything about past or future sales prospects is to live with a blindfold on.

One of the activities management expects of salespeople is to provide bottom-up feedback in the area of sales forecasting. Unfortunately, many sales managers shove their sales forecasts down the throats of their sales staff due to the demands /expectations for sales increases of senior management.

Now I am not inferring that senior management should not play an active role in determining the sales expectations of their salespeople. I am only suggesting that a bottom-up approach is far more accurate of what a sales territory can or will produce if the salespeople have the ability to accurately access their territory potential. Salespeople, if they are in touch with their customer and/or prospect’s needs, problems, budgets, changes and competitive initiatives, are far better equipped to forecast future sales results. In order to come up with numbers that are reflective of ‘the real world’ and satisfy the demands of management, salespeople must understand the factors that impact their future sales results. Some of these are:

  • present sales levels per customer/prospect
  • future needs, concerns, desires of customers/prospects
  • competitive activities in the sales territory
  • general market conditions
  • the quality of the relationship between the salespeople/organization and the
  • prospects/customers
  • new or future product/service opportunities
  • whether the territory has real potential or is a maintenance territory
  • the sales competence of the salesperson
  • the self-image of the salesperson (the ability to be honest with management with
  • territory limitations and issues)
  • the relationship of the salesperson with his/her manager
  • There are many others, but these tend to determine the accuracy of any sales forecast whether weekly, monthly or yearly. The key premises to remember when forecasting are:
  • people buy when they are ready to buy – not when you need to sell
  • ignoring competitive initiatives will ensure a lack of integrity in your numbers
  • you can’t make up for poor sales skills or attitudes with extra effort or time
  • giving management the numbers they want when they are not possible or
  • realistic is to only postpone the ultimate frustration of everyone
  • just pulling numbers out of the air will haunt you later in the sales cycle