Why Is the Sales Forecast Wrong?

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I was talking to a potential CRM prospect yesterday. A sales executive at a large manufacturer and I asked him how he is doing the sales forecast. Typically, companies if this size, are scrambling to roll up spreadsheets to try to get to a reasonable number. This is time consuming and onerous, plus the sales guys hate it. I have been in sales positions where the management email came out late Friday telling the sales team to get the forecast to him by close of business.

Now, lets go back to the sales exec that I asked about forecasting. He said, ” Geez, we don’t do that. The numbers are always wrong and how the heck can I get accurate data from our 3000 plus distributors that are selling our products? ” I listened and agreed, and gently asked if he will consider, just consider maybe a better way.

Many of our electronics clients using our CRM have complex sales channels. The account base is rated and directs, manufacturers reps and distributors carry the sales bag. This can change, components of the sales channels can be de-coupled and coupled, usually in a 30 day time frame. The sales data resides in many different systems and typical CRM fails miserably in shedding a light on the true sales picture.

You see, the picture is painted by several different components. There is the manufacturers rep in the US or Europe that is exchanging data with the customer. This is design data, production dates, perhaps production locations and even the contract manufacturers which are building the products. This data can change, the dates can move, the CMs and the locations can change and the forecasted units can ramp up, ramp down. Sales execs in the US have are trying to pay commissions to transfer reps here in the states when the part is consumed offshore.

These changes present a problem. The super distributor that holds inventory in Singapore and is delivering parts to the Jabil line to build the customer’s product. This distributor is certainly interested in an accurate forecast. The rep and the RSM want to be paid for work. The exec is balancing overpaying and underpaying on projects.

With all this “SFA or Sales Force Automation” why is the forecast still so inaccurate?

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