How Do You Accurately Forecast Sales Pipeline?
Sales people spend 80% of their time on deals they will not win.
Why is this? Are they not good enough to win the deal? Or, do they simply not know how to go about preparing an accurate sales pipeline forecast?
Forecasting often tends to be dependent on a combination of sales person’s ‘gut’ feel, and how suitable a client is based on a set of internal factors. The salesperson knows where in the market their price and product fits and when their offering seems like the ideal choice for the client. At this stage the salesperson feels it is only a matter of time before the client signs on the dotted line. However, often the sale is then lost right at the end of the process. The sale was forecast as a successful one, so what went wrong?
I have yet to hear a sales person admit that a deal was lost because they weren’t good enough. Usual reasons given are “we just didn’t have the right product”, or “the client went for a cheaper option”.
In reality there are only two reasons you didn’t win the deal:
You weren’t good enough
It was never yours to win
And no, no deal should ever be lost on price. If price is crucial to the deal, this should be identified early on in the process.
Every deal lost is a learning opportunity to identify which of the above two categories it falls into. Somewhere something was missed! Not being good enough means insufficient time was spent exploring exactly what was important in this sale.
- What were the key drivers?
- How would the decision be made?
- What would the tangible impact be?
If it wasn’t yours to win, that simply means that there were key criteria the client was looking for that you could never fulfil. If identified early in the sales process, the salesperson will walk away having saved as much as 80 per cent of their time chasing something that was never theirs to win.
Robust Sales Process
Imagine cutting that 80% figure down by half, resulting in the sales team being able to reinvest their time pursuing winnable business. Implementing a robust sales process, and making sure that it is followed, is proven to increase success. It’s not enough to rely on a good product at a good price – and this is especially true in hard times.
You will need two important bits of information, namely:
1/ the bigger picture of why your client needs a particular product, and
2/ what steps and criteria are involved in order to sanction purchasing that product.
By following the sales process, the salesperson will unearth all of the factors that are involved in making a decision, leading to a much greater chance of a successful sale. At the end of the sales process they will know the client inside out: what’s important to them, who is involved in the decision, and the people who can influence it. If all of these factors are discovered, it’s a foregone conclusion that the sale will be won because the sales recommendation shows the client how all of their criteria can be fulfilled.
Bridging The Sales Gap
How do you build a robust sales process? First, you finding out where the gaps are in the ways sales are taken on and managed. You then fill those with some targeted training. The sales process needn’t (and shouldn’t) be complicated. It should be as simple as giving the sales team five steps to take during each stage of the sales process, and showing them how to master each one.
Managing the Sales Process
How can you tell if the sales team have found out everything about a client before at the start of the sales process? Have all the elements of the cycle been followed, from the very first meeting right through to signing the deal? By implementing a consistent robust sales process, and using the same steps to manage it, the answers become clear. Forecasting likely successful sales then becomes much more accurate. The added benefit of following the sales process is that in the early stages of a sale you find out if the client is not an ideal candidate for what you are trying to sell – no more time wasted.
Hit the ground running with a sales process
It is obvious that at the beginning of next year, targets will increase by a higher rate than over the last six years. Thankfully the economy is now recovering, and businesses will have the confidence to invest in the future, as long as they are comfortable that they can trust that sales targets will be met.
Accurate sales pipeline forecast is crucial!
A pipeline populated with deals that are winnable means that sales people will have a head start in the first quarter. As a result, they will have a successful and profitable year. This in turn, will give their company the confidence to invest in new products, marketing and recruitment.
The key to your sales strategy lies in the understanding of:
- What’s the Problem?
How well did you fully understand the problem that your client was trying to solve by buying your service or product? Who were the ultimate decision-makers and what timescale were they working on? Did you know exactly who you were competing with and their strengths and weaknesses?
- What’s the Value?
Could you articulate the tangible value your proposition offered your client compared to the competition? How much time did you spend investigating this?
- Is There a Fit?
How confident were you that the client felt you were the right fit for them? How close are your values and theirs? Was the client a match at the right end of your market?
- Can you Make it Happen?
Did you speak to the right people often enough? Were they always available when you needed them?