Many businesses start geting excited at the end of the financial year because they are about to enter the beginning of a new year, one filled with opportunity and growth.
This is the time new sales targets are set and everyone lurches forward with energy renewed. “Hurrah! Let’s get rich!”
But it doesn’t stick.
Unfortunately, within the first 90 days businesses start to lose momentum as the initial new targets are missed, and businesses owners and sales teams start to lower their heads.
It is an age old story, told over and again.
Sales forecasting is often done wrong. Business people are using guesswork to put numbers on paper for the accountant but they aren’t grounded in reality.
End of month reporting is driven by the accountant instead of the team. Too often businesses are reporting on what happened at the end of the month, instead of what they can affect weekly or even daily. They are focusing on results (often missed targets) instead of actions that can change the result.
Sales targets are often based on aspirational numbers – you know, “let’s raise our targets by 20% this year! Yeah!” Which means a whole heap of action needs to happen to build momentum towards achieving those new, higher targets.
A forecast is a projection, not a promise. But what if you could take away the guess work?
As much as the accountant wants certainty around cashflow, sales people need to focus on the actions they can take today to grow their business. They need to know exactly what they need to do daily in order to reach the targets, not because they think they can, but because they know exactly what to do to influence the outcome.
Too often money is also left on the table because sales people are given targets that are too easily achieved because the actions and probabilities haven’t been mapped out. They just do what they have always done, no extra effort, no additional growth. So, either way the business is missing out on additional revenue because the targets aren’t grounded in achievable actions and activity.
Sales forecasts are often based on hunches. “Oh, we had a great meeting, I really liked the guys, I’m sure this will become a sale…”
“Oh, she said she is definitely keen, she said to send an email and she would come back to me…”
Stop guessing! Define your buying stages!
Relying on a hunch is no good for anyone. If you know exactly how many meetings or engagements, you need to have with a prospect before they are ready to buy (*Hint – its probably five or six – not one or two!) then you can map out the exact activities that you need to do daily to take prospects through these buying stages and close deals.
This way, you aren’t guessing based on how nice somebody was – you are forecasting based on knowing exactly what activities are left to perform, within what timeframe and when the deal is likely to close.
Your accountant will start to trust you again too!