Value Strategy News: Increase Your Success Through a Better Sales Forecast

The Value Strategy News
Business Performance Improvement

September 8, 2009 Revenue CaptureStrategies

CEO-Coaching Editor: Gerhard Vierthaler

Welcome,

In this issue, we talk about 6 reasons why most
sales forecasts are inaccurate and why they
hamper profitability.

Also in this issue - a free offer to attend Thursday's
"How To Grow Your Company" Teleseminar.

Through this FREE Teleseminar, we will give you detailed,
specific action steps to grow your business in this economy
now, regardless of how deep the recession goes. These best
practices are proven and work if you follow our systematic
programs and recommendations.

Attend and start increasing your company success today!

Sincerely,

Gerhard Vierthaler
Editor - The Value Strategy News
Value Strategy Group, LLC
907-222-2703

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Increase Your Success
Through a Better Sales Forecast

By Paul DiModica

6 Reasons Why Most Sales Forecasts
Are Inaccurate and Why They
Hamper Corporate Profitability

One success driver for companies to grow their top line revenue is the accurate management of their sales forecast. A sales forecast is a leading business driver that when used correctly, increases corporate cash flow, accelerates operational success, and allows companies to manage their business model by proactive metrics, not reactive emotion.

When incorrect sales forecast data is collected
or improperly managed . . . companies fail.

So why do many companies manage their business revenue forecast as if it was an after-thought?

Sales forecasts are incorrectly managed for multiple reasons, including lack of business understanding of their value contribution, lack of sales management controls and insufficient training and guidance for the sales team of why executive management needs accurate input.

When your sales forecast is wrong, all of your other departments aversely affected.

6 Reasons Why Most Sales Forecasts
Are Inaccurate and Why They
Hamper Corporate Profitability

Management pulls un-scrubbed sales forecasts directly from their customer management system (CRM) without their senior sales manager giving input.

Sales forecasts are unfiltered human data based on metrics (hopefully) supplied by positive business professionals, which need to be smoothed by the active sales manager who understands the personal nuances and selling capabilities of each sales team member.
Salespeople just guess.

Some salespeople who just fill up the sales forecast with useless information to look busy. They don't understand that sales is a premeditated process and their sales cycle must be managed.
Management has no metrics on determining what each sales step represents quantitatively, no written process of what a qualified sales step is, nor guidelines on what should be included in a forecast.

Often management does not understand the intricacies of setting up and managing sales forecasts. Their lack of leadership just confuses and at times alienates the sales team when forecasts are requested. It is easy to blame salespeople for inaccurate sales forecasts, but if management does not set down specific criteria for defining what a qualified lead is and is not, then inaccurate sales forecasts are not the fault of the sales team.
Salespeople insert data into their customer management system weekly instead of daily.

Sales forecasts are snapshots of time that change constantly. Prospects rapidly move from being qualified to not being qualified based on new management decisions as well as national economic changes. Due to this volatile nature of decision making by prospects, sales forecasts must be updated continuously.
Salespeople premeditatedly exaggerate the sales forecasts opportunities to look busy.

Sales forecasts are visible reflections of sales team members' activity. Some salespeople outright misrepresent their sales forecasts (or hide deals often called bluebirds) to management so they can maximize their commissions by bundling deals for higher commission payouts at the end of the year or end of the quarter.
Management does not link accurate forecasts to company objectives (i.e., bench utilization goals, marketing budgets, capital investments, etc.).

Sales forecasts are not secular data reviewed once a week in a sales meeting. It is a living, breathing business tool that must be managed proactively and linked to all other department actions, investments, and team staffing and implementation goals.

To increase your revenue -- manage your sales forecast like it's the amount of cash you have in your checking account. Know exactly what is in your account and run your business by it.

P.S. : We hope you enjoy the newsletter and encourage you to
share it with anyone you think might benefit from the
business and skill-building tips it provides.

The Value Strategy News / Revenue Improvement Strategies is published bi-weekly and provides proven tactical and strategic sales techniques to help you accelerate your revenue capture. The Value Strategy News provides best practices that Senior Management, Marketing and Sales Executives can use to increase corporate profitability with proven strategic and tactical sales techniques to help you sell to senior management of Fortune 1000 companies and presidents of privately held firms.

If you wish to send a specific correspondence to Gerhard Vierthaler, please send your message to the editor. If you have a general question or wish to inquire about an event, please send your message to Customer Service.

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Gerhard Vierthaler is president and founder of the Value Strategy Group and offers sales &
marketing best practices workshops, business strategy engagements & executive coaching in North America & abroad tailored to clients needs.

We develop dynamic strategies and processes that sustain competitive advantage and company value to succeed in any market condition. Our content rich workshops and strategy sessions on leadership, sales, management and marketing bring about immediate changes and long-term results.

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