There are few certainties in sales, but the more reps can feel confident about what’s ahead of them, the better.
At one time, for example, sales reps might have been assigned territories or accounts with very little to go on. If there were customer records, they were either paper-based or stored locally on individual desktops.
Even when reps were given background on key accounts, there was always the chance the information was inaccurate, out of date or both. This could make things incredibly awkward for reps when they actually got to speak with customers.
They might make reference to the buyer’s most recent purchase in their pitch, for example, only to be informed they’ve made additional investments with the company since then.
A rep might make assumptions about what they believed a customer’s budget to be, and then learn it had, in fact, been cut for the previous two years.
Then there’s the risk of asking a contact who works with your customer — and who had previously played a strong role in getting the go-ahead to make a purchase — and discovering that person left the company long ago.
Focusing on forecasting
Thanks to the adoption of a CRM in many organizations, a lot of those surprises have gone away. That said, it’s still not always easy for sales teams to do the one thing their managers need most: to deliver a forecast they can count on.
If you give reps enough pressure and a sharp deadline, they’ll certainly give you a number, but not one you’ll want to report to members of the executive team.
When a forecast turns out to be a false prophecy, it represents the worst surprise of all. Companies use those forecasts to determine everything from their budgets for equipment to new product development and even the number of people they can afford to hire.
Look for the leading and lagging indicators
The best way to ensure there aren’t surprises between the time a forecast is made and the actual results come in is to closely study both leading and lagging indicators.
As you set up your dashboards in a CRM, for example, try to gather as much of the data as you can on all the activities reps do which indicate they’ll close the volume of deals in the forecast.
Some examples of these leading indicators are things like the number of calls reps make each day and the number of emails they send out. There’s also the number of meetings they book with customers and prospects, and how many of those meetings convert into an actual sale.
Keeping an eye on leading indicators allows you to head off potential surprises by giving reps the coaching they need before it’s too late.
If you see them booking a lot of meetings that don’t convert into deals, for instance, there might be something wrong in how they’re attempting to close with the client. Maybe you can offer guidance to overcome some of the final objections, or offer compelling proof points that get them over the finish line.
Lagging indicators focus more on what you can look at after the fact. This includes the end of the month, the quarter or even the company’s fiscal year. If the last forecast didn’t pan out, dig deeper and examine what reps managed in terms of average deal size, average deal length or number of product lines sold.
Those lagging indicators can confirm what you might have already suspected, but offer numbers you can work with to come up with specific improvements.
Getting a handle on this data will allow you to make a better forecast the next time around, because you’ll know what’s influencing growth and where your weak spots are. The more often you go through this exercise, the less of a surprise your sales results will be.
Locking down leads and looping in marketing
Not everything in the forecast is dependent on reps’ performance in the field, of course. Your dashboard should also give you a window into the leads they’ve given to work with, and where they’re coming from.
Depending on the organization, leads will have to be scored or qualified by the marketing department first, then approved by the sales team afterwards. If this process isn’t running smoothly or if you’re not attracting the same volume of quality leads for any reason, the forecast is going to come up short.
This is just one of the reasons you should establish and maintain as strong a relationship as possible between marketing and sales.
How aligned is each team on the target customer? Is the number of leads needed attainable? If not, how can campaigns be adjusted or lead scoring accelerated to keep reps busy talking to the right customers?
Your CRM becomes essential across all these areas. First, it allows everyone to keep customer data organized. Second, it brings all that data into the same place, organizes it and makes it accessible to everyone in the company who needs it.
Developing a sales strategy based on what gets put in the CRM means no one’s relying on guesswork to do their jobs. They’re not making assumptions because they have no easy or fast way to get at the truth. Guesswork and assumptions are the key ingredients that lead to nasty surprises in sales.
Instead, the ability to set up and use a dashboard to guide everything from lead generation and management to tracking leading and lagging indicators will build forecasts everyone can stand behind.
The forecast becomes the game plan that drives key decision-making, and represents the goals that everyone is working towards.
Of course, unexpected changes may still occur, but if you have the right data in place it will be easier to pivot as necessary and get back on track.
In the end, having a great quarter or year might lead the company to throw a party, but it won’t be a surprise party. As a more cohesive team, everyone will have realized there is going to be ample reason to celebrate.
