Is your forecast too sunny? How to improve the accuracy of sales forecasts.

Written by Graham Yemm

Continued from page 1

Think about your business – and be clear aboutrepparttar average order size or purchase level of each customer. (If you have several very different product or service groups or lines you may need to do this for each one.) Does this vary for existing and new customers? From this analysis you can see how many sales you need to get each month and what those numbers will be in each category.

Based onrepparttar 142496 averages, how many orders or customers do you need each month?

How many of these can be relied on for repeat business – and how much new business do you need to obtain?

In order to get torepparttar 142497 point of orders coming in you will have to go through a number of stages, which may look something like this:

The stages might have different names within your business,repparttar 142498 principle will hold true.

To help your forecasting become more accurate you need to be able to move throughrepparttar 142499 process and assess how things stand at each stage and what isrepparttar 142500 potential of moving through torepparttar 142501 end. The more you can break each stage down into specific activities,repparttar 142502 better your ability to see whether you will continue moving through.

You need to initiate some form of sales reporting system to record what arerepparttar 142503 planned activities andrepparttar 142504 actual ones which take place. There are many variations available electronically, which can improve efficiency and effectiveness. Most of these will enable you to create your own sales “pipeline” or “funnel” so that you can monitor progress. Basic systems such as ACT, Goldmine or SalesLogix will also allow you and your sales people to develop customer records, keep everything related torepparttar 142505 customer in one place, and manage their diaries. You can have an even more thorough tool such as SalesCentric, which can let you incorporaterepparttar 142506 sales process and activities and carry support material onrepparttar 142507 customer record. There are ways to use all of them to help with your forecasting, though SalesCentric will probably allow you to be more accurate with it.

Alongsiderepparttar 142508 need to set some form of percentage weighting at each stage, it will help you to knowrepparttar 142509 ratios between each stage ofrepparttar 142510 sales process. The way to go about this is to work backwards!! * As we stated earlier – how many orders (commitments) do you need each month?

* How many proposals will you need to be doing to achieve this number? (and what isrepparttar 142511 time lapse between presenting them and gettingrepparttar 142512 response?) Do you convert 1 in 3, 1 in 2 or what?

* To get to formal proposals, how many people need to be atrepparttar 142513 “analysis” stage?

* To be able to do this – how many do you need,,,,,,,,,,you can getrepparttar 142514 idea!

These numbers will help you to createrepparttar 142515 right sales controls for yourself. If you are not talking to enough people atrepparttar 142516 start ofrepparttar 142517 process, you are extremely unlikely to get sufficient sales!

The next phase is to look at each ofrepparttar 142518 stages and think about how you can assess your chances of generating business. What criteria can you use for each one? Past relationships, number of contacts you have, relevant experience, number of competitors inrepparttar 142519 frame etc.,etc. You will need to work this out for your own organisation. You may then make some decisions about how you progress opportunities. What can you do to increase your chances? When do you decide to pull out ofrepparttar 142520 opportunity?

When you are creating your forecast these percentages and numbers can then be combined to give yourepparttar 142521 potential – and with some anticipated timescales. For example, if you have £150,000 of business being discussed, proposed or tendered you can dorepparttar 142522 maths. If £60,000 is atrepparttar 142523 30% stage, that equates to £18,000. The other £90,000 might be at 50% - giving a potential of £45,000. Thereforerepparttar 142524 forecast would be £63,000. You might be able to get more than this if you take action to increaserepparttar 142525 % probability – but based on a realistic assessment, your forecast is not £150,000!! It is having figures like that in mind which can cause problems, being far too sunny! Encourage everyone to use an effective sales planning and reporting process that is relevant for your market, or even insist on it! Then manage that process, correcting problems early on rather than when sales are not happening – and setrepparttar 142526 weightings forrepparttar 142527 forecast. Let your sales people give you accurate forecasts, do not compel false optimism. There is no harm in being sunny, just be sure it will happen!!

References:, Saleslogix, ACT and Goldmine are available from many suppliers.

Graham Yemm a founding partner of Solutions 4 Training Ltd. He has worked with many different organisations around the world conducting both training and consultancy assignments. He is a Master Practitioner of NLP and an accredited trainer for the LAB profile programme – “Words that Change Minds”. Contact,

Bite Your Tongue

Written by Kelley Robertson

Continued from page 1
2. Anytime you ask forrepparttar sale. When you ask a person to make a financial commitment (aka a buying decision) you need to give them time to think about their decision and to respond. Too many sales people talk themselves out of a sale by continuing to speak afterwards. I recall one sales person telling me he would give me time to make a decision even though I had told him I wanted his product. 3. When you are not sure what to say next. From time to time, I have found myself unsure of what I should say after a comment made a prospect or customer. In these situations, an effective approach is to remain silent. It takes patience and a lot of control. However, in most cases,repparttar 141862 other person will fill up that dead air space and give you information you would not have learned otherwise. 4. When people express disappointment. In situations of conflict our natural tendency is to explain why something went wrong or to immediately offer a solution. However, allowing peoplerepparttar 141863 opportunity to vent gives yourepparttar 141864 chance to offerrepparttar 141865 best possible solution. Many years ago I had a disgruntled employee and I gave her time to express her opinions. After several minutes of heated words and angry dialogue, I discovered that all she really wanted from me wasrepparttar 141866 opportunity to vent her frustration. In another situation, my customer actually told me what he wanted done which was less than I had originally planned to offer. I remember readingrepparttar 141867 following advice from an author some years ago – spend one day every few months being as quiet as possible and responding only when it adds value to that particular conversation. This will be incredibly difficult forrepparttar 141868 majority of people but imagine how much you will hear and learn that day. Most people who sell a product or service mistakenly think that they must do most ofrepparttar 141869 talking. However, my experience has taught me that some ofrepparttar 141870 best sales people are alsorepparttar 141871 quietest. And it’s because they actually hear what their customer or prospect has to say. They learn what’s important to that person. They find outrepparttar 141872 motivating factors behindrepparttar 141873 purchase. They allowrepparttar 141874 other person to dominaterepparttar 141875 conversation. And let’s face it,repparttar 141876 majority of people will always talk when givenrepparttar 141877 opportunity. © 2005 Kelley Robertson, All rights reserved

Kelley Robertson, works with businesses to help them increase their sales and motivate their employees. He is also the author of “Stop, Ask & Listen – Proven Sales Techniques To Turn Browsers Into Buyers.” Receive a FREE copy of “100 Ways to Increase Your Sales” by subscribing to his free sales and motivational newsletter available at Contact him at 905-633-7750 or

    <Back to Page 1 © 2005
Terms of Use