The art of throwing darts is a difficult and highly skilled talent. To stand 7 feet 9.25 inches from a target which is 12.7milimetres in diameter (the bullseye) and perfectly aim a pointed projectile so that it lands in the centre of said target takes a lot of skill, hours of practice and a finely honed technique. Now take a total amateur at darts, blindfold them, spin them around 5 times and challenge them to hit that bullseye with a single shot! The odds? It's fair to say... a very long shot! Our B2B Telemarketing company's research has indicated that for many companies B2B sales forecasting can be akin to that blindfolded amateur trying to hit the bullseye. Hitting the target can realistically be put down to an extreme dosage of luck. The more likely outcome is a wild miss with a potentially ominous outcome.Sales forecasts impact on every area of the business, having both short term and long term implications. Not only do they affect your projected revenue, they also have operational implications, purchasing implications and impact upon supply chain, marketing activities and so on. There are many unforeseen circumstances that can impact on your forecast revenue, so it is fundamentally important to implement some best practice procedures. In this article let us focus on the building blocks required to enable you to generate sales forecasts with greater accuracy.Analyse your historical sales data.The most important and relevant source of information regarding your sales forecast is your own historical data. By analysing past sales and identifying trends and patterns you will gain an understanding of your customers' purchasing characteristics and align your sales strategy accordingly. This is not an easy task by any means. There are many highly effective applications and tools in the marketplace which can assist you with this exercise.Understand your customers buying process (as opposed to your preferred selling process)Not understanding the buying process of your target audience is a common mistake made by many companies. Your sales cycle is dictated by your customers buying process and, depending on your product or service area, you can identify common milestones in the purchasing process that should be used to determine a key aspect of your sales process: how you define your sales stages.Define Specific Pipeline Stages
Each sales stage represents a step forward in your customers buying process. Do not over-complicate this process hence creating too many stages, but Be Specific. Typically between 4 and 6 key stages will suffice. Commonly used examples of these stages are 1) Exploring Needs; 2) Value Proposition; 3) Resolving Issues; 4) Final Proposal/Negotiation; 5)Closed Won/Closed Lost. A good CRM will offer you the ability to create these sales stages and manage your live opportunities in a structured manner.Identify "at risk" OpportunitiesSales which are ultimately lost can spend up to 50% longer in your sales pipeline than those which are won. This has massive implications for you if you are preparing your sales forecasts. Identifying these "at-risk" opportunities will serve as a reality check and assist you in refining your forecasts allowing for a more accurate reflection of your forecast revenue. This reverts back to building timelines around your sales stages. If an opportunity is stagnating and spending too long in any one stage it may indicate that your prospective customer has stalled and there is a risk that you could potentially lose the deal.A steady stream of qualified sales leadsLet's face it - B2B sales forecasting is a futile exercise unless you have a healthy sales pipeline from which to pull your forecast data from. A certain percentage of the deals in your pipeline will not close - FACT! The importance of having a steady stream of qualified sales leads being fed into your sales pipeline cannot be emphasised strongly enough. Outsourcing this aspect of your business to a specialist lead generation company who offer a cost effective and results oriented solution can help you achieve this. Defining your key lead qualification criteria and implementing a consistent sales lead generation process is your ultimate goal. Maintaining a healthy sales pipeline and strategically progressing these leads through your sales pipeline stages will most certainly lead to the generation of more accurate sales forecasts, which in turn, of course, will mean achieving your sales goals in a far more efficient manner.So it is time to remove the blindfold, stop spinning around in circles and focus your efforts in a strategic, structured and analytical manner. Go forth and forecast!