Between setting goals and attaining them lives a mindset that will increase or decrease your chances…
You could try a crystal ball to improve sales forecasting but I’d recommend using the following six elements. We all want to increase sales. The benefit of sales forecasting is that it helps management determine and make new decisions based on the forecast that the sales team is putting forth.
How do we do that? It doesn’t happen overnight and it doesn’t happen just because you have a new CRM and you now are tracking opportunities. Below are the six elements we use that can help you improve sales forecasting.
- Trusting Relationship: Have strong trusting relationships between the salespeople and the sales manager if you want to improve sales forecasting. If you have a sales manager who’s grinding their team to fill the pipeline, salespeople are likely going to stuff junk in there. Management needs to know what’s real. The salespeople need to be able to have honest communication with their sales manager. It should be OK to say, “I can’t find the right customers right now. I’m not getting to the qualified folks.”
- Qualifying Criteria: Have clear criteria on what is a qualified opportunity. Spend some time as a team and decide, “What is our criteria that should be acknowledged before we add them into the deal pipeline”. In addition, add that into your stages in your CRM.
- Disqualify Opportunities: You have to have a manager who’s willing to disqualify deals to improve sales forecasting. Salespeople qualify deals and sales managers disqualify them if they are not meeting standards. In other words, we want to challenge them and make sure they really did a good job at qualifying. If they aren’t qualified, they cannot stay in the pipeline.
- CRM Alignment: The sales leads need to be aligned with the sales process in the deal stages of your CRM. Hopefully, you have a defined sales process.
- Refine Probabilities: You want to always be refining your probability percentages. For instance, you have a deal in your CRM and it’s moving along in stages. Usually companies will set a percentage of probability that that deal will happen based on the stage. Over time, you want to refine those percentages. Also, you want to get accurate with your sales folks on adjusting those percentages based on other criteria being met, and not just on gut feel.
- Monitor Pipeline: Monitor deals and stages of your pipelines during your sales team one-on-ones. That’s a great time where you both can drill down and qualify and disqualify opportunities.
Bonus Tips to Improve Sales Forecasting
Here’s some bonus ideas for you if you’d like to take your forecasting even further. Have your CRM notify you when deals are hanging out too long. Furthermore, you can address whether sales should be moving out of the pipeline or if they need attention to progress.
Have peers qualify deals for your sales people. For instance, in order for a deal to enter the pipeline, your sales people need to run it by one of their teammates. They will be challenged to make sure it is a qualified deal.
Lastly, if your sales forecasts are close to actual sales at the end of the quarter, set up a bonus to reward your sales team.
To conclude, when we’re able to predict what sales will happen and have good forecasting out of our CRM and through our sales team, that puts the executive level at the company in a great position to make better decisions for the future.
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