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

Written by Graham Yemm

As spring moves to summer,repparttar forecast should be for warmer and sunnier weather. What isrepparttar 142496 forecast for your business? Isrepparttar 142497 outlook sunny or cloudy?

Do you know what sales you can expect, whether for a team of sales people or within your own business or practice? How do you feel about putting together a forecast? How dorepparttar 142498 others in your business feel? I wonder why you have these feelings?

Forecasting is vital for any business – well, accurate forecasting is vital!! This is true for professional services as well as commercial organisations. How often are your forecasts accurate? Inaccurate forecasting carries all sorts of hazards. Whether there is a tendency to be too optimistic and sunny with your forecasts, or too downbeat and understating it, there are potential problems forrepparttar 142499 business. Are people encouraged, or allowed, to be pragmatic about their forecasts or do they feel as though they have to tell you they will do well? Do you tend to think that there are too many factors outside of your control and so it is not worth doing anyway?

Why does it matter? Apart fromrepparttar 142500 reality that sales, whether to existing or new clients, arerepparttar 142501 lifeblood of your business! Being too optimistic about potential sales can lead to various issues – anticipating revenues which will not happen, planning resources such as people and products, problems with cash flow, panic management! The other end ofrepparttar 142502 equation, under-estimating has its own problems too! Although it can feel good to see sales coming in which were not anticipated, think aboutrepparttar 142503 problems they might cause within your own business. Cash flow problems of a different sort,repparttar 142504 need to getrepparttar 142505 resources at short notice, quality of customer or client service and response are all probabilities. Becoming more accurate with your forecasts will help you run a smoother and more profitable organisation.

How do you approach forecasting sales? Tea leaves, roll ofrepparttar 142506 dice, checkrepparttar 142507 stars or ask others for their expectations? There are some basic principles to consider or follow and a variety of methods you can use to help and they should prove more reliable thenrepparttar 142508 ideas above! Although we are presuming you are already an established business, many ofrepparttar 142509 principles will apply even for new start-ups.

First point – look at your records forrepparttar 142510 previous couple of years and do some analysis.

  • What arerepparttar 142511 average monthly sales? (or revenues if you prefer!)
  • Can you break this down to weekly figures, if useful to you?
  • Arerepparttar 142512 any obvious patterns or trends to these? Seasonal or market driven?
  • What isrepparttar 142513 breakdown between new business and repeat business?
  • How frequently do existing customers purchase?
  • Can you assess average “order” size from each category?
  • What arerepparttar 142514 trends in all of these, year on year?
  • You may find that looking at a “Z-chart” can help you to take a realistic view of how you are doing. The key line here isrepparttar 142515 top one, which is created by takingrepparttar 142516 rolling total fromrepparttar 142517 previous 12 months. It shows how you are really doing on a year-on-year basis and allows for seasonal dips and highs, which can distortrepparttar 142518 annual figures and cause a knee jerk reaction. Knowingrepparttar 142519 trends is a good start. The next stage is to assess and breakdown your actual sales process. What arerepparttar 142520 specific steps and activities you take to go from identifying potential customers or clients through to getting their commitment? Not onlyrepparttar 142521 steps andrepparttar 142522 best practice activities, but how long doesrepparttar 142523 process take on average? (The sales cycle, sales lead time or whatever phrase suits your business.)

    Too often, organisations and sales managers in particular spend too long looking at results, which are effectively historical data and difficult to do anything about! Fundamentally, sales will come fromrepparttar 142524 right levels of activity directed atrepparttar 142525 right potential clients – usingrepparttar 142526 appropriate skills. If these inputs are wrong, there is an inevitability aboutrepparttar 142527 outputs! Getting to grips with your sales process can help you to createrepparttar 142528 effective measures and control points to improve sales forecasting and sales performance.

    An element of forecasting, and good sales planning and management, isrepparttar 142529 old maxim – “start withrepparttar 142530 end in mind”. What do you need to be generating need to in terms of business? (Revenue, or numbers of units or whatever works for you.) Working back from this you can start to see where your critical checks and controls should be – and how you can assessrepparttar 142531 probability of getting a sale.

Bite Your Tongue

Written by Kelley Robertson

Most people don’t realize how powerful a negotiating tool silence is. I discovered exactly how effective as I recently observed someone discussing a deal with a prospective customer this past week. The customer started describing his situation and after a few moments he paused – briefly. It was an opportune time forrepparttar sales person to make a comment or talk about her product and service. However, she remained silent, sensing thatrepparttar 141862 customer had more to say. Her intuition proved correct - a few seconds later he continued talking about his needs, and when he had finished discussing his point he paused. The sales person refrained from speaking and her customer began talking again. During this last monologuerepparttar 141863 sales person learnedrepparttar 141864 exact information that she needed to closerepparttar 141865 sale without resorting to discounting. If she had spoken during those moments of silence, she may still have closedrepparttar 141866 sale but not as effectively. I remember watching my wife use silence as a customer several years ago in a retail store. She had brought a few items torepparttar 141867 cash desk and whenrepparttar 141868 sales associate rang them in my wife noticed a discrepancy in price. When she questioned this difference,repparttar 141869 employee mentioned thatrepparttar 141870 items in question were not available forrepparttar 141871 price my wife had thought. Instead of complaining or arguing my wife chose to remain silent. The sales associate immediately began talking to fill uprepparttar 141872 “dead air” space, and before long, had talked herself into giving my wiferepparttar 141873 discount she had hoped for. The next time you meet with a client or customer – either face-to-face or overrepparttar 141874 telephone – bite your tongue. Resistrepparttar 141875 temptation to talk immediately after they have spoken. Instead, pause for a few moments. Because most people are uncomfortable with silence they will automatically say something. This is a very effective recruiting technique (calledrepparttar 141876 pregnant pause) and it can be used inrepparttar 141877 sales process as well. Here are a few other situations when biting your tongue will benefit you: 1. After you ask a question. I’ve seen more sales people answer their own questions instead of holding back and allowing their customer to talk. Let a customer tell you what’s on their mind and encourage them to give you more information. This is extremely easy to do when you refrain from talking after asking someone a question.

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