Let me first state a few aspects of my opinion about sales forecasts:
- They are the only rational basis for setting the priority of items on your ToDo list
- They are therefore indispensably essential
- They must be updated continuously; by every sales rep, manager and executive
- If you whine about submitting your forecast and/or tell me it’s not possible to forecast accurately, you’re fired! (Yes, I mean it that bluntly!)
- Reasonably accurate forecasts aren’t that freakin’ hard to do
OK, now that the rant is out of the way, let’s take a look at the mechanics of maintaining a sales forecast. Any CRM system worth anything enables simple, easy, forecasting. (What I’m about to describe is available, for example, from Zoho CRM for $12 per user per month.) Here’s how to do a forecast:
- Enter each sales opportunity you have decided to pursue
- For each opportunity, document your best guess for the $ value, close date and odds to close
- Sort the resulting list by each of the above three items and update your prioritized action plan accordingly (Please Note Well: This is where the true value of a CRM kicks in. This is where a rep develops a ToDo list that exactly supports the goal of working the biggest opportunities with the highest odds to close soonest.)
- Further classify each opportunity as:
- Unlisted – A really, really long shot that probably will never happen, but what the hey, you never know
- Pipeline – It’s in the funnel or pipeline and I’m at least considering putting some effort into making it happen
- Best Case – If the stars align properly and I do everything right, this deal will happen
- Commit – I’m going to make this one happen
- Click the button on your CRM to produce an amazingly accurate picture of what’s going to happen in the territory
- If the “Commit” forecast meets or exceeds goal, work your ToDo list
- If the “Commit” forecast does not meet or exceed goal, work your ToDo list and be sure to include “find more opportunities” near the top of the list
Not to keep beating the same dead horse, but… How on earth could a rep possibly create a valid, prioritized ToDo list without having a clear, detailed understanding of which opportunities are most likely to yield the desired results? A rep simply must have a list of opportunities sorted by $value, odds to close and close date to do so. Otherwise it’s just randomly wandering through the territory chasing the next shiny object. Without the Unlisted/Pipeline/Best Case/Commit forecasts a rep has no clue if goal will be achieved. It’s nothing more than a wild guess.
Shut up and do your forecast!
