Is sales forecasting an art or a science? Are you just "guesstimating" from last quarter's results, or do you have an effective process in place that produces accurate forecasts? Many companies rely on a forecasting spreadsheet with projected sales based on historical data, but are they accurate, up-to-date and reliable? In many cases, Sales Managers fail to keep their spreadsheets up-to-date and are unable to obtain accurate, timely data from their sales team.
Using Sales Force Automation Tools
Companies employing sales force automation (SFA) tools can often produce more accurate forecasts, but these tools must be used correctly. Here are several tips to improve your forecasts via SFA.
- Choose sales force automation software that fits your business
- Provide thorough SFA training for new sales people
- Provide refresher SFA training for existing sales team
- Create a policy in which all sales people must document their daily activities as they happen, not later in the week
- Include required documentation of phone calls, e-mails, proposals and contracts
- Make sure your sales team includes reasonable individual account forecasts, probabilities and closing dates
- Enforce the policy by regularly reviewing activities for all sales people and accounts
- Penalize violators of the policy with one or two warnings, followed by reduced compensation or account responsibility
Producing Accurate Sales Forecasts
Software alone provides only a vehicle for improving sales forecasting results. Training personnel and enforcing a rigorous policy requiring all sales people to use the software are the keys to successful forecasting. Once you have accurate data in place you can create a variety of reports on demand:
- New leads and opportunities (by period or by sales rep)
- Leads by source or region
- Sales leaderboard
- YTD and monthly sales totals and trends
- Pipeline status by rep or group
- Forecast reports by quarter, by rep, by region
- Neglected leads
- Campaign performance
- Outstanding tasks (to-do list)
- Activity report (compliance with policy)
How are you generating sales forecasts, and how accurate are they?