3 Ways Sales Management Can Stop Obsessing Over the Forecast

November 12, 2011 at 7:00 AM

In our consulting business, we observe Sales Managers wasting their time on this obsession with forecasting.  We find that 37% of Sales Management time is spent on Forecasting sales. The need to be accurate is driven from a CFO who wants to be precise.  Unfortunately, this obsession with forecasting is preventing Sales Management from actually riding with their sales people to help coach them to sell.  

Ironically, riding in the field eliminates the need to spend so much time on forecasting.  It eliminates the need to triple check the deals to make sure they close.  And it eliminates the need for a Sales Manager to call the sales rep 15 times the day before the forecast review with their boss.

We work with Fortune 50 companies daily. Some interesting time trends get noticed:

  • Every other week most VPs of Sales are ‘unavailable’ for a day.  They are in forecast meetings. 
  • Every other week most Sales Managers are ‘unavailable’ for a day.  It is always the day before the VP of Sales forecast meeting. 
  • Every other week most Sales Reps are ‘unavailable’ for a day.  It is always the day before their Sales Manager forecast meeting.

(Notice the trend)

This is called ‘The Toilet Bowl’.  (Round and Round we go before we finally get ‘flushed’ (aka: fired) by the company)

Why does this happen?

  • Limited Customer Contact.  Only 15% of all VP’s of Sales visited a customer last month. Only 35% of Sales Managers visited a customer last month. If you are not in front of a customer, then you must trust your sales reps to reveal what is happening in the field.
  • Not Trusting Your People.  Trust is at an all-time low in sales.  Survey results from Sales Managers reveal only 23% actually trust their sales people to use the sales process and forecast off of it. 
  • No Sales Process.  Only 65% of companies have a defined sales process.  And 15% of those use the one that came with the CRM.  What do you forecast to?  Your gut instinct?  Unless you have all superstar talent on your team, you need a sales process.  
  • Poor Talent.  My father once told me “There is no right way to do something wrong.” Do you have the right talent on the team?  We perform talent assessments on sales organizations every month.  On a scale of 1-6 (6 being the highest score) on sales competencies, the average score is 2.5.  With average quota attainment in the low 40% and sales competency scores in the bottom 1/3, sales talent is degrading.  You need better talent.

3 Ways to Stop Obsessing Over the Forecast:

  1. Go See Customers.  Below is a schedule of how a Sales Manager should construct their week.  Do you have an ideal week mapped out for yourself?  Do you try and stick to it? (Notice no forecasting calls and lots of field time)Sales Manager Schedule
  2. Sales Process.  Adherence to a Sales Process is the absolute way to limit the time spent forecasting. Train your Sales People to follow the process.  The process needs to be mapped to a Buying Process and have Buyer driven stage exit criteria.  If it does, your sales reps will use it (because they will know how your buyer is thinking).  You then will be able to understand the true probability of close at each stage (not some made up percentage ripped out of thin air).  Tell them to accurately place each opportunity in the appropriate stage.  You just eliminated 2 full days of forecasting calls.  You now will be in the field visiting customers.  You will now increase your pipeline. Here is a sample Sales Process in which the customer does not obsess over forecasting (Note the actually probabilities based on an average 6 month historical data)sales process
  3. Talent upgrade=Trust.  Every single sales force we work with wants to upgrade their talent. You must trust your sales people to do the correct thing.  If you don’t trust your current people, get some who you do trust.  We know thousands of sales people in hundreds of companies in over 19 industries.  We provide sales managers names of great sales people and tell them to give these people a call to upgrade talent.  Nothing. Nada. No Way.  The call is rarely ever made.  Stop being complacent and upgrade your talent. Or your boss will upgrade you.

A VP of Sales called us 18 months ago.  Struggling with underperformance and new on the job, he knew things needed to change or 19 months from now (average tenure of a VP of Sales) he would be looking for a new job.  After some discussions, we found there was no sales process in place.  John was spending 4 days per month on forecasting sales for the CEO.  ‘The Toilet Bowl’ Syndrome was beginning. We worked with him and implemented a sales process.  18 Months later, sales are growing at double-digits and he spends 2 hours per month on the forecast which is 93% accurate.  He sees customers 3 days per week and has upgraded 35% of his sales force with much better talent.   He is living the Ideal Life. 

Are you?

Are you in ‘The Toilet Bowl’?

If you are, implement the 3 actions above.  Attend our webinar discussing territory improvements.  This will help you be in the field and increase your accuracy in forecasting.

But whatever you do, don’t obsess over forecasting.  Get out there and build your pipeline.

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Topics: Sales Performance Management, Sales Management

Posted by Dan Perry

Dan Perry
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