Sales
forecasting is the hardest and most important task challenging
almost every organization. The actions taken to forecast sales
involve two key components: the pipeline and the forecast. The
pipeline represents the collective sales opportunities actively
being pursued by sales team members to win more business. The
forecast represents an estimation of which of those sales opportunities
are truly viable (meaning they can close), an expected
closure timeframe (conveying when they will close).
Most
companies spend inordinate amounts of time attempting to predict
their near-term forecasted sales; and they typically do so in
an unscientific manner. There is no consistent methodology applied.
Significant variation in the process exists, and decisions are
reached with little or no regard to rational or auditable metrics.
Many view the exercise as “a pound of flesh for an ounce
of truth”. Very few companies actually measure how many
hours are spent weekly between the field and the executive ranks
creating forecasts.
The
primary culprit here is the pipeline. It typically contains inconsistent
information that is based upon emotion, opinion and subjectivity.
Qualitative sales metrics are non-existent. So, the lion’s
share of executive forecasting work spent is an attempt to find
the truth by converting emotion, opinion and subjectivity into
objective criteria worthy of “betting the company”
on this month. (Executives also focus on the near term crisis
vs. managing the pipeline with a longer, more strategic view)
Once “the truth” in the pipeline has been mined, forecasting
becomes less daunting.
CounterIntuitive
Software provides a unique combination of tailored metrics, tools,
and analytics for your sales environment. A series of Sales Metrics
convert emotion, optimism and subjectivity to logical, defensible
numbers. They create an objective, clearer picture of your pipeline
contents. This cuts right through the conversion work many of
executives did this past Monday, and will repeat next Monday morning.
Since a clearer picture of the pipeline is an immediate output,
the predictability of future revenue streams becomes more objectively
quantifiable.
Sales
leadership can strategically focus on the entire pipeline,
instead of managing short term crises. By improving the quality
of sales entering the front of the pipeline, win rates go up,
cost of sales drop and “art” is replaced with a scientific
approach to forecasting.
