Five Reasons Your Sales Forecast Will Be Wrong

sales forecasting fortune tellers ballYou Relied on What You Were Told

“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 are talking. One of the most common misconceptions people make is a smile mean agreement, acceptance, understanding or mutual understanding, approval, or endorsement. If I could teach any new sales rep anything it would be, “don’t trust your gut!”

There are likely other reasons for the smiles.

  1. They read a leadership article citing all the reasons leaders should smile more.
  2. Smiling boosts confidence.
  3. To make a difficult task easier.
  4. Their mind wandered off to their impending vacation
  5. It’s good manners

Emotional or “gut feelings” are not the way to 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 are buying what they are trying to accomplish as an organization.

You Relied on Bad Data

Hate to tell you this, but most of the data in your CRM is missing, inaccurate, not what you need, or out of date.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 sales people don’t want to enter information into Salesforce.com or other any other CRM. And truthfully, why would they? It’s cumbersome. They’d rather spend time in front of customers than behind a computer screen. 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 forth 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? Do your sales people know what information is needed to make it a valid lead? Do you know? Do the leads in your pipeline match your ideal customer profile? Do you have an ideal customer profile? Do your sales people know the buying criteria of each? If not, it’s time to do some housecleaning.

You 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 sales people how many sales they were going to make? You did, didn’t you?

Sales people are not willing to risk their job security by openly admitting they are going to perform below expectation, 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, sales people will fill their CRM with activity that isn’t real just to keep you off their back. 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. Seriously, you have better odds at a craps table in Vegas than you do forming an accurate sales forecast.

Increase Your Odds of an Accurate Forecast

There are better methods to increase your odds of an accurate sales forecast that don’t involve “gut feelings” or “instinct.” However, if you like your odds, go for it. All you need is a seven or an eleven unless it’s a two, three, or a twelve. If it’s a different number, the rules adjust. Get busy forecasting.

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