Wednesday, April 11, 2012

Sales Forecasting: The Facts and the Fantasies

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To many, the term "sales executive" conjures up images of five-star dinners and long afternoons on the golf course. But, as I'm sure any sales executive would tell you, the job entails more than simply schmoozing with clients and courting prospects. In reality, sales executives face enormous pressure to drive revenue and improve the profitability of their company, particularly since their performance has a direct impact on the bottom line. Their ability to provide accurate sales forecasts and deliver results based on those projections is essential to the overall health of the organization. Predictability is of the utmost importance.

Given the importance of their role, one would assume there are myriad tools and technologies available to assist sales executives in generating accurate sales forecasts. Unfortunately, there aren't.

Traditional CRM systems go a long way toward helping companies keep track of their sales activities and customer contacts, and they provide some reporting to help sales executives manage their functions. But sales teams need clear visibility into their pipeline -- past, present and future -- to help prioritize which deals to focus on in order to maximize revenue. This is where today's CRM solutions fall short.
From the "front lines" of sales to the corner office, sales forecasting solutions are needed to positively impact every level of an organization. While technology clearly cannot do the job alone, it can go a long way toward helping sales teams meet their goals and objectives.

Below are some facts (and fantasies) about sales forecasting solutions and how they impact each level of an enterprise sales organization.
  

Sales Representatives

Fact: Sales forecasting solutions retain historical data and trending information, helping sales reps properly prioritize deals and allocate their time efficiently.

As a sales rep, hitting quarterly numbers is a top priority. In order to do so, reps must learn from the past and focus on the most worthwhile deals in the pipeline. By using sales forecasting solutions, reps have immediate access to essential historical data captured by CRM systems, allowing them to conduct careful pipeline analysis with their sales managers and efficiently manage opportunities.

For example, analysis of the details behind historical won/lost deals can reveal patterns for success. These patterns can then be applied to current pipelines, segmenting deals into highly likely, highly unlikely, and those in the middle. With this understanding, reps and managers can then make sure that resources are appropriately apportioned, with a particular focus on those deals in the middle bucket, where you have a good chance to change the outcome of your top line.

Fantasy: Sales forecasting does the work for you.
It would be nuts to think that sales forecasting solutions close deals for sales reps -- but it sure can help with the heavy lifting. Identifying the most promising deals is only half the battle; it is just as critical that sales reps have visibility on where to focus their energy, continue to build best practices, and then move forward to close deals once the best course of action has been identified.

 

Sales Managers

Fact: Sales forecasting solutions provide sales managers with actionable sales data, saving them time and giving them additional opportunities to manage sales reps effectively.

The primary goal of sales management is to create an environment in which sales representatives can achieve outstanding results. But due to the high-pressure nature of sales, it is difficult for managers to focus on anything but numbers, leaving very little time for learning and development. By delivering quality data about a rep's current deal status, what's changed in the pipeline, and how the individual rep ranks against others on a team, sales forecasting solutions allow sales managers to conduct high-value, one-on-one coaching sessions. With this information at their fingertips, sales managers pick out specific areas that need improvement and address them, rather than waste time simply trying to make sense of CRM data.

Fantasy: Sales forecasting solutions automatically turn sales managers into all-star coaches.
Although forecasting solutions give sales managers more time with their direct reports, there is no guarantee that they will excel in this role. Often, sales managers are promoted because they are top-performing reps, not necessarily because they are recognized as leaders or coaches. Transforming from a top sales rep into a top sales manager takes more than sales forecasting technology, it takes the right employee and the right coaching.

 

Sales Operations

Fact: Sales forecasting solutions allow those in the sales operations role to implement an efficient sales process and provide high-value information to their organization.
One of the key components to running a successful organization is implementing an efficient sales process, a responsibility that falls squarely on the shoulders of sales operations. The biggest pain point sales operations must deal with while implementing a sales process is the time spent analyzing and compiling CRM data. Because traditional CRM systems do not offer forecast customization, sales operations are unable to quickly and accurately gauge sales velocity and close rates, forcing them to spend hours building extensive reports. With the additional insight offered by forecasting solutions, sales operations can bring the sales process out of spreadsheets allowing them to focus on higher level reporting.

Fantasy: Sales forecasting solutions won't make your CRM data more valuable.
By highlighting where data is incomplete and inaccurate, those in the sales operations role can identify people or groups that are not entering correct data into the CRM system. Insufficient data is a "people problem" that can be corrected by identifying those not properly inputting information into a system and taking the appropriate action.

 

Vice President of Sales

Fact: Sales forecasting solutions give the vice president of sales visibility into the big picture by offering a look at the overarching health of their teams and resources.
At the highest level of a sales organization, it is essential for executives to know how their team is performing against company goals and identify who might need additional support. By using sales forecasting solutions, sales executives can determine how likely it is that a company will meet its revenue goals based upon what the sales pipeline looked like the previous year.

Additionally, they can evaluate their top-line revenue acquisition rate and decide upon a course of action accordingly. Whether they need to push a little harder on the sales team, put more executive focus on key deals or be more aggressive with discounts, proper use of sales forecasting solutions uncovers subtle signs early on and can confirm trends.

Fantasy: Sales forecasting solutions are effective without senior-level support.
When it comes to implementing sales forecasting solutions, best practices start from the top and adoption by senior management is critical. Without a commitment from the vice president of sales, company-wide adoption of these solutions is extremely difficult.

 

The Bottom Line

CRM just isn't enough -- sales teams need sales forecasting technology solutions to help them get the results they strive for. Now is the time for organizations to move beyond traditional CRM. It is possible to have more accurate forecasts.

Companies deploying sales forecasting solutions today have this and more. Higher win rates, increased sales rep efficiency, and accelerated revenue are possible with the right technology in place

http://www.frontrow-solutions.com/