“Never make forecasts, especially about the future”
-Samuel Goldwyn

While the quote in the title is tongue-in-cheek, in Sales, forecasting is a fact of life.  And many members lament that the quality of their sales forecasting is lacking.  Information isn’t always entered by the sales force – and if it is, it might not be accurate – and even then our ability to analyze the information may not be up to par.

So to help us out, I went to the definitive source on financial tracking and analysis – the CFO suite.  I sat down with Myles Vander Weele, Executive Advisor with our Corporate Finance practice, to talk about sales forecasting from Finance’s perspective.

According to Myles, forecasting is a critical responsibility of Corporate Finance.  They work to figure out what the organization is capable of and then set targets to track actual performance against those expectations throughout the year.   “Since forecasts are assumptions,” says Myles, “Finance continuously checks to determine how the business is performing relative to those assumptions.”

And, getting sales forecasting as accurate as possible is critical to a well run business.  As Myles explains, “Sales forecasts help the company make better decisions on how to manage spending and what expectations they should be setting with investors.”

However, relatively speaking, forecasting Sales is difficult. Read More »

We hope you’ll read this and share this.

It’s a unique occasion when we get to step back from the day-to-day of supporting our members’ decisions and reflect on where we believe the world of sales is headed. In 2011, the SEC had thousands of interactions with sales executives around the globe, held dozens of conferences and intimate roundtable discussions with leading CSOs, and examined hundreds of thousands data points.

Given this, we’d like to share the fundamental shifts we expect to play out in increasingly significant ways in 2012.

Granted, it’s not a MECE list – there is overlap and implications shared throughout these trends, but we hope you’ll take a minute and reflect on how these trends are manifesting in your own organization, disagree if appropriate, and highlight trends you expect to see that we missed. It’s meant to be a reflective, but fun list. We look forward to your input! Read More »

In uncertain times (sound familiar?), information on what might happen next becomes king.  Early Monday morning, CFO’s all over the world sent urgent e-mails asking for updated forecasts in light of recent financial news.

Many responses were inaccurate, because they failed to adhere to a law of nature first observed centuries ago and that most of us learned in high school physics: for every action, there’s an equal and opposite reaction.

Most sales organizations track sales reps’ actions. But few systematically track the customer’s reaction to those efforts, despite mounds of evidence that this data is key to deciphering actual purchase intent.

In fact, only 3 out of 20 of their regularly tracked metrics are even aimed at the customer.  Within that, just 6% of organizations measure customer responses at different stages of the sales cycle – most instead rely on a more passive (and less predictive) sense of customer sentiment like satisfaction.

Observing customer reactions strengthens forecasts because, definitionally, they are present tense – they reflect what is happening right now. Read More »

In one of my recent member conversations, a VP of Sales was quite frustrated because his reps never seem to be on the same page with their customers – “Just when we think that we are ready to shake on a deal, the customer pulls away. How do we know where the deal really stands?”

Some companies choose a traditional route of tracking sales reps’ actions to gauge a deal’s progress – have reps made X number of calls to the customer, have they sent the proper collateral, have they taken the right subject matter expert on a customer visit.  This approach could work, if not for these two big problems.

• First, it’s highly prone to rep bias – it’s relatively easy for reps to overestimate the impact of a particular activity on the customer (just as it’s relatively easy for the rep to exaggerate the quantity and quality of the activities themselves).

• Second, and more importantly, there are many things that influence customer buying decisions other than rep activities – competitor activities, market forces, end-user demand, internal stakeholder priories, etc. All these have a profound influence on customers’ decisions—often in ways that are completely non-transparent to our sales people.

So, what’s left? How do we really know where customers are in their buying process and whether the deal is moving forward?   Read More »

Gamblers of the world, unite!  Did you know you can place bets on the outcomes of almost any reasonably well-known event?  There are what’s called “prediction markets” for everything under the sun – a quick search on Google for “Prediction Markets” gives nearly 1,030,000 results, with companies offering contracts on sports, financial markets, politics, and what not.

Browsing through Intrade, one of the many online prediction market companies out there shows what issues are making news and the likelihood of these events playing out in the future:

1)   ‘Obamacare’ health care reform to become law before midnight ET 30 Jun 2010 — Last Price = 52.0*

2)   Tiger Woods to play in PGA Tour event before 30 Apr 2010 — Last Price = 60.1*

3)   Crystal Bowersox to win American Idol (Season 9) — Last Price = 20.0*

4)   Dow Jones to close on or above 9,500 on 31 Dec 2010 — Last Price = 65.0* Read More »

Most large sales organizations have teams working full-time trying to achieve a globally standardized sales process.  These teams develop all kinds of methodologies to attain the coveted “common language” – Six Sigma techniques to denote the smallest of errors, communication plans, voice of the customer studies, productivity audits, and training materials to name a few.

But how much of these efforts are a waste of time?

Portions of our most recent work show that sales process can be over-done, and the ROI of perfecting ‘the science of sales’ may be lower than ever: 

1)  Following a formal sales process actually has zero correlation to the success of a Challenger sales rep™, the dominant way to be a star performer in this environment.  In fact, it’s better to be agile. Standardizing activity can be a hindrance.

2)  Mere completion of scripted sales process activities doesn’t necessarily provide better pipeline visibility. Leading edge forecasters have found tracking customer reactions (rather than your actions) far more predictive. Read More »