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Andrew Penny, December 10 2019

5 - Sales Forecasts and Other Lies

Sales management is a deep topic but this series of podcasts is focusing on the quick and easy ways to increase revenue. So let’s look at some of the obvious stuff which many companies forget to do.

The adage “If you don’t measure it you can’t manage it” is absolutely true. “But I do measure sales results” you say! Fair enough.. but do you just manage the results or do you also measure the activities that lead to those results? Too many organizations leave the sales team to be lone-wolf hunters without helping them to develop an effective framework for their activities. And it’s the activities that matter! And, to expand on the adage – “What gets measured, gets done”.

Think of sales as a machine – leads go in one end and sales come out the other. What happens inside the machine? How are they processed? There are an infinite number of ways to break down the sales process: Lead, Prospect, Qualified Prospect, Presentation, Demo, Proposal, Contract etc... Each company will have a unique framework depending on the type of customer and the product or service being sold. The important thing is to be able to measure the efficiency of the process and you do that by measuring what percentage of opportunities move forward at each stage – and how long that takes.

The objective here is not necessarily to monitor your sales staff but rather to manage them and the process. If few leads are converting to prospects then your lead generation system is inefficient. If you are investing in a lot of demos and not being asked for a proposal then perhaps your demos are flawed. With this data you can start to improve the process. In an ideal world 100% of all leads become clients. (If you can achieve that let me know!). The earlier in the process you can weed out those who won’t buy, the less time and energy you’ll waste] and you’ll be on your way to a continuously improving lean sales process.

Note that we are talking about activities here - and not skills- and 80% of sales is simply doing the work. Sure the skill level matters but only if you also do the work.

This will also allow you to forecast sales with more accuracy. For example, if you have few leads and a sales cycle of 2 months – you’ll have some lean days ahead.

At a minimum, your business plan forecasts the annual, quarterly and monthly targets. Have you broken these down into weekly objectives? Are you reviewing your sales team’s activities each week?

So, codify your sales process, set objectives based on your business plan, measure your team’s activities and review progress weekly to provide coaching and identify ways to continually improve your process.

If you’d like some help designing a sales framework for your organization, will you give me a call?

Podcasts.  We have started a series of Business Podcasts.  Click this link to hear how you can take your company to the next level:   Next Level Thinking for CEOs and Business Owners

Written by

Andrew Penny

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