How to improve your forecast accuracy?
By Pascal Persyn on November 28, 2009 @ 12:16
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Tags: , buying clock, buying funnel, forecast accuracy, forecast visibility, funnel management, sales funnel, Sales-Process
How to questions from readers and customers prompted me to write an add-on to my previous post on funnel management.
The first thing that has to be said is that few companies have changed their sales approach in an appreciable way over the last few decades. Yet buyers are seeking to buy and not to be sold to for over a decade.
I still see sales trainings and managers telling their sales and to look at the sales cycle and behave in an way that is inward looking. Sales force automation (SFA) and customer relation management systems (CRM) haven’t really helped to convert the front-line in an outward looking mode and helping people to buy from them instead of being sold to.
I was pleasantly surprised to see one of the outcomes of the 2009 sales conference in Miami where the buying cycle emerged as the new standard for funnel management. I trust this to be a stimulus for all the Perpetos customers bringing this into practice since 2005. But their is still a long way to go. It is indeed the best way to get subjectivity out of your funnel, yet it demands a mind-shift of the whole sales organisation and another way for management to coach and interact with their sales team. They all must learn to ask way more questions and ‘really’ try to understand what the customer is saying.
The principle is simple: Ask the customer questions which allows you to know the readiness to buy of each individual in the decision making unit (DMU), align them all so that they move through the buying cycle in a synchronised way and adapt your actions to it.
A couple of tips to improve your funnel management:
- Stop tracking and discussing sales steps and process. Start using readiness to buy phases based on reactions and answers to questions from each individual involved in the buying process. Ideally start using the Buying Clock. Using the time on the clock is an easy way for implementing a, consistent used, common language.
- Are we asking for and tracking the next step or are we engaging the sales rep to first decide on the next objective to facilitate the buying process on a project level before deciding what the next step should be, when and with whom? Do we track this in our funnel?
- Track the pain level of the customer by also knowing the impact of the challenges on the customer. Is their a compelling reason or an urgent need?
- Has your sales rep access to the decision maker? Is he continuously involved in the process and kept up to date by the sales rep?
- Is the go-live date the most important date we discuss with the customer? Is it a fixed date and why or can it easily be postponed? Do we know and are we tracking the go-live date?
- Has the customer actually confirmed your solution fit and did we postpone drafting the proposal until that moment?
- Split the weight % in 2 distinct ones: project%=what is the probability of the customer actually buying and win% = the probability of you winning the deal.
- Are you tracking the most important mandatory buying criteria and what is the perceived scoring of the customer compared to the competition? Do you discuss ways to influence these buying criteria?
Finally:
- Convert your weighted funnel in a scenario based funnel on which you coach the sales rep.
- Engage in vivid 1:1 discusions with sales to set a continuous improvement process in motion.
Your benefit and result: An accurate forecast with a highly improved visibility.
