Sales forecasting for beginners
Wednesday, July 1st, 2009
Pulling together the basic sales forecasting information you have to have
Every business should have a sales forecasting process. Sales forecasting should receive just as much attention as cash flow management. Sales are the life blood of any business as cash is the oxygen supply. The cash flow and sales forecast reports are inextricably linked. The adoption of good sales forecasting software and a well enforced sales forecasting policy can make an substantial difference to the health and performance of any business.
Key inputs
There are three key inputs or factors to consider when creating a sales forecast. The sales person, the customer and the product. Good sales forecasting software lets you to sort,correlate and present these inputs and give you a clear assessment of the activity in your sales pipeline and what is and isn’t going to come in when.
1. Getting sales people to gather accurate sales forecasting information.
Sales people vary in their levels of skills, experience and knowledge of your target market or industry. But with a small amount of training, encouragement and discipline they can be made to submit accurate sales forecasts. Drill the questions that you need answers to into your salespeople and make sure as the undertake the sales process that they are talking to the right people at the right time and posing the right questions in the right way. Therefore the first discipline sales people should have drilled into them is planning. Don’t ever call or arrange to meet a customer without a plan. The plan should contain what information is needed and what questions will be asked in what order. Their call plan should be recorded in the sales forecasting software for later review. There is nothing that annoys me more than sales people who turn up for a call without a planned set of questions and a means of taking down my answers.
2. Gathering Customer information
Keeping detailed information about the customer’s organisation, the market they operate in and the progress they are making is really useful when it comes to assessing the basis for the salespersons sales forecast assumptions
A good example of this is the customers credit rating. Every detail about the customer should be recorded in the sales forecasting software. Therefore every sales person should develop a habit of finding out as much as they can that is in the public domain about the customer. Naturally this information is good content for conversation when the sales person interacts with the customer. It will always lead to questions and most customers are impressed by sales people who appear to have a genuine interest or good working knowledge of their customers. Remember the art of the sale is about solving the customer’s problem. The more problems you can spot in your customer’s business, the more creative you will become and the more you might sell if what you have can address these problems.
3. Educating the Customer
This is where the third factor, the product comes into play. The easiest way to sell a product or a service is to make sure your customer is educated as much as is possible about what you do. I am not talking here about thrusting brochures into their hands. Here I would recommend using the timeless art of the story. There is nothing more complelling than a great story teller. Stories about how other customers have uses your products and services to solve their problems are invaluable. “Story” is a much better way to describe a case study or testimonial. These terms are tired and worn. You will get so much more information back from a customer if you tell detailed and carefully woven stories as they paint good pictures of the possible outcomes of using your product or service.
All of this information rigourously entered by all into a good sales forecasting software system should give you the vital data to make higher quality decisions and avoid errors of judgement in cash management.
