You Relied on What You Were Told
Emotional or “gut feelings” are not the way to create a sales forecast. As Bob Nicols stated, buyers have four compartments of information they evaluate: product, price, support, and the company. Customers aren’t buying a smiling face. They buy what they are trying to accomplish as an organization.
“Never ever mistake the smile upon my face as agreement to the words coming out of your mouth. There’s no telling what I may be thinking.” – Lisa Pool
There are plenty of reasons I may be smiling while you talk. One of the most common misconceptions people make is that a smile means agreement, acceptance, understanding, approval, or endorsement. If I teach any new sales rep one thing, it is, “Don’t trust your gut!”
There are likely other reasons for smiles.
- They read a leadership article citing all the reasons leaders should smile more.
- Smiling boosts confidence.
- It makes difficult tasks easier.
- Their mind wandered off to their impending vacation.
- It’s good manners.
You Relied on Bad Data for Your Sales Forecast
Hate to tell you this, but most of the data in your CRM is missing, inaccurate, not what you need, or out of date. Most salespeople don’t want to enter information into a CRM. And truthfully, why would they? First, it’s cumbersome. They’d rather spend time in front of customers than behind a computer screen. Second, you’re not holding them accountable for the information being entered or not entered.
You Relied on a Dirty Pipeline
When was the last time you summoned your sales team, threw down the gauntlet, and challenged the sacred cow we call a pipeline? Have you really looked at the stuff in there? How long has that opportunity been in the pipeline? When was the last time the opportunity was touched? Are your sellers knowledgeable about what information is needed to make a valid lead? Is the customer profile ideal? Do the leads in your pipeline match your ideal customer profile? Is the proper buying criteria known? If not, it’s time to do some housecleaning.
Your Sales Forecast Relied on the Wrong Dates
One of the most common mistakes sales managers make in forecasting is telling the sales team how many sales have to be made by a specific date. Just because your organization has a date, it doesn’t mean your clients have to have the same date. That’s a little like telling a baby the date and time down to the minute what time it will be born, how much it will weigh, and how long it will be. Good luck with that. Like babies, organizations make their decisions based upon their own needs, not yours.
You Relied on Fallax Indicium
My Latin is likely off, but the idea is you relied on false information based upon survival rather than accuracy. Did you actually ask your salespeople how many sales they were going to make? You did, didn’t you?
Salespeople are not willing to risk their job security by openly admitting they are going to perform below expectations, and most likely neither are you. Forecasts become a mixture of hope and fear. Even some of the most successful sales reps would prefer to avoid the embarrassment of an upcoming off month and make up a forecast. In some cases, salespeople will fill their CRM with an activity that isn’t authentic just to keep you off their backs.
I’m only slightly embarrassed to admit I have also behaved in that manner. Every week, I had a sales manager wanting a report saying what deals I was closing the following week. Seriously? I’m the girl who doesn’t believe anything is solid until the ink has dried and the client has taken possession. I didn’t have a crystal ball, and I couldn’t read minds, but sure, let me make a number up for you.
Unfortunately, sales managers often use these kinds of criteria for sales forecasting. You may as well go to Las Vegas and play the craps table. Moreover, you have better odds at a craps table in Vegas than you do making an accurate sales forecast.
Increase Your Odds of an Accurate Sales Forecast
There are better methods to increase your odds of an accurate sales forecast that don’t involve “gut feelings” or “instinct.” Firstly, if you like your odds, go for it. Secondly, all you need is a seven or an eleven. Thirdly, if it’s a different number, the rules adjust. Lastly, get busy forecasting.