Sales Forecasting

Take this short assessment to see if you are in synch with top sales management practice.

Read through the five forecasting questions and give yourself an honest assessment from 1 to 5.

The score of "1" meaning I need serious work in the area and a score of "5" meaning I could give lessons to others in the area. Be honest with yourself. Accurate forecasting starts with a clear understanding of why and how forecasts fail to materialise.

1) Do you frequently move close dates back or see quotation price changes? If you see frequent close-dates pushed back and quotation price changes these are indicators that an opportunity may be unlikely to convert. If an opportunity in your pipeline changes close date or value three times or more, you should mark it as at-risk in your forecast.

I could give lessonsI need serious work
2) Do you know your ideal or average deal size? Most companies close deals of a certain size with more frequency. However opportunities that are more than 3x your company’s average deal size typically convert at lower rates and take longer to convert when they finally do, so flag them accordingly in your forecast.

I could give lessonsI need serious work
3) How well do you know the average duration of Won deals? Study your pipeline and look for opportunities that have lingered in the same stage for significantly longer than the average duration of Won Deals and flag them up.

Generally, buyers know what they’re looking for and don’t hesitate to buy once they find it. So if you have opportunities that are languishing in the pipeline they will often tend to convert at a lower rate than quickly progressing ones.

I could give lessonsI need serious work
4) How often do you ensure you are dealing with the ultimate decision maker? Orders can only be signed by decision-makers, so if your sales person has a late-stage opportunity in his pipeline but he isn’t yet speaking to a decision-maker, that opportunity should be flagged as at-risk in your forecast.

I could give lessonsI need serious work
5) Do you let early sales stage opportunities enter your forecast? Regardless of when your sales person expects a deal to close, opportunities in the first stage of the sales cycle should not be in your forecast – they are still far from becoming a Closed-Won deal and it is overly optimistic to rely on them. Instead, limit your forecast to opportunities that have steadily progressed through the sales process stages rather than these ambulance chasers.

I could give lessonsI need serious work

The Sales Strategist Book Image - Peter Holland