Forecasting is a powerful tool; when consistently exercised correctly, it can have great benefits that flow across the whole organisation.
The ability to govern the power and effectiveness of this tool initially begins with the sales people; it’s only in the trenches that accurate intelligence can be gathered. When information on available opportunities, revenue for grabs, competitive offers, and contract end dates are captured and ordered into a plan, they build the foundations for future strategy and success, not just for an individual and their own portfolio, but rolling up to the business level.
Below are some ways in which the whole organisation can benefit from diligent, accurate sales forecasting from an effective sales team:
The Sales Person
Successful salespeople know how to combine business tools with information that they have gathered to build a business plan around their portfolio. By capturing relevant, accurate data about their portfolio opportunity which includes white space up for grabs, and areas of threat that need protection, a smart sales person will be able to plan their next 30, 60, 90 days around the activities that they need to focus on in order to hit and over achieve their targets.
Powerful information can be derived from data captured from closed won and lost opportunities. Trends can be formulated on a wide range of areas including win rates, average sales cycles, success of product by region and return on investment per sales staff. This information, combined with sales forecasts, can help management get a clearer idea on important items such as the optimal size of a sales pipeline specific to their team and where to focus more training and development to in order to achieve even greater success.
It is only through accurate forecasting of opportunities by sales people that the business can make informed decisions on where to focus its strategies and investments. For example, if there is a large pipeline of opportunities due to close in the next quarter for a specific product set with a high win probability, the business will need to ensure that there is capacity to fulfill the delivery of that product should (when) those opportunities convert to real deliverable sales orders.
In summary, forecasting is a critical activity that needs to begin with the sales person. Data needs to be captured and updated accurately and in a timely fashion. Strong tools need to back up the easy collection and analysis of this data. In combination, good forecasting practices can result in a highly effective sales team and organisation.
Joanna Choe is the Sales Operations Manager at Brennan IT.