Sales Blog with Sales Tips

There are only a few things that really matter to sales management. Let me present them in order of importance:

1. How much you’re selling (specifically, your last month/quarter).

2. The quantity and quality of what’s in your pipeline.

3. Your sales forecast.

Why Does The Sales Forecast Come In Last?
Conventional sales forecasting comes in last because we all know it’s a fairly worthless exercise. We also know it’s a bad habit the sales profession can’t seem to replace with something that works.

The TAS Group recently completed a survey of 200 companies that showed the average sales professional spends 2.5 hours per week on sales forecasting.

For the majority of companies in that study, their sales forecasts had an error rate of 25%+. Does it make sense for sales professionals to spend almost 11 hours per month on sales forecasting when the accuracy is less than 75%?

Why This Matters
Poor sales forecasting practices can negatively influence organizations in many ways:

• It wastes the sales professional’s time.
• There is no real feedback loop for sales professionals and their managers to prioritize and channel their efforts.
• Accurate allocation and planning of resources (e.g. sales support, operations, marketing) is compromised.
• Every sales professional’s forecast is moved upstream in the sales management food chain. His or her forecast is touched (i.e. manipulated) many times. The time wasted each month extends well beyond the time investment from just the sales force.

Is CRM (Customer Relationship Management) The Answer?
Large companies that use CRM systems list the ability to accurately forecast sales as number two on their wish list for their CRM software.  Isn’t this supposed to be a key functionality built into CRM systems?  I’m confused.

The TSA Group states that the majority of CRM companies don’t use their own software for sales forecasting. Sobering thought.

CRM, in its current form, is not getting the job done. It’s simply not seen as a provider of accurate sales forecasting.

How Things Might Be Improved
Organizations need to simplify their sales forecasting process. Most sales forecasting systems (CRM and non-CRM) put too much emphasis on the “who, when and why” instead of the “what and how.”

Sales management is frequently guilty of forgetting that the primary benefactor of a good sales forecasting process is the sales professional.

CRM providers need to start over. The complexity of these systems is beyond ridiculous. No sales professional (or anyone in sales management for that matter) is going to seriously deal with all the data entry, drop downs and radio buttons involved in these systems masquerading as forecasting tools.

I feel that dozens of people designed each of these systems and all of them got their way.

Most salespeople bang in the minimum amount of information the CRM system requires and quickly move on to something important – like selling. The information coming out of the CRM system is unreliable as a result.

Sales Tips Conclusion
Sales forecasting is important in sales. I’m surprised that most sales organizations still operate without the accurate metrics they need.

©2010 Scott R. Sheaffer

Your techniques for qualifying prospects should always be evolving. Why? Changing economic climates and industry variables.

I see sales professionals every day who haven’t adapted their qualifying skills since they first started selling. Nothing stands still. We have to constantly fine-tune our criteria in this area.

Below I’m briefly going to cover 5 principles for qualifying prospects in 2010.

Principle #1
Will the prospect survive in a global economy? Don’t spend large amounts of resources courting an opportunity that isn’t going to be able to compete in a global economy.

The global economy is killing, and will kill, more American businesses than most people realize. I don’t need to give you examples here.

Principle #2
Will the prospect survive this recession? I know it sounds cold, but don’t hitch your cart to a horse that’s going to die 300 yards down the road.

Principle #3
Is the company profitable? If the opportunity you’re looking at is public, you’ll have access to their financial statements that makes this a black and white exercise.

If they’re a private company, you don’t need an income statement to know. Companies that are losing money have a stink about them that is hard to ignore during an onsite sales call.

Principle #4
Can you help them make money? I overheard a medical salesperson pitching his products to a doctor recently while I was waiting in the doc’s office. The doctor flatly asked the salesperson, “How will this make me money?” Doctors’ offices aren’t the only businesses asking that question today.

Principle #5
Is the prospect technology-phobic or technology-friendly (e.g. EDI, eCommerce)? If they’re technology-friendly, this allows you to provide better service while keeping your costs down. Result: happier long-term customer, higher margins for you, better pricing for the customer.

Conclusion
It’s all about taking a long-term view of how you want to invest your business development efforts. The 5 principles above will reduce the chance that you’ll waste your time and resources on prospects that have no future for you.

©2010 Scott R. Sheaffer

When I was a freshman sales representative, the VP of Sales told me if I kept 95% of my customers happy, I’d be doing a great job.

That might have been good advice even a few years ago.

It represents 100% bad coaching today. Here’s why.

You’re On Stage And Everyone Is Watching
Things have changed dramatically in the last five years. I’m not sure we fully appreciate how exposed all of our actions have become and the resultant level of customer service that is expected of us.

Because of social media (e.g. Twitter, Facebook, LinkedIn, etc.), if the company we work for makes a false step, or we do, the whole world knows about it. Instantly.

Decision makers use social media when purchasing, especially when it comes to capital expenditures. Blunders can have more than a trivial impact on our sales. Have you ever considered that potential customers are googling your name before buying from you? They are.

The old formula that said, “If you provide poor service to one customer they’ll tell 10 people,” is from the Paleolithic era. That number is now unlimited.

When You’re On Stage, There Is No Room For Mistakes
Why do you think film producers and directors are so obsessive about their work? They know that millions of viewers will be watching. With so many eyes focused on their work, shortcomings are quickly reported and exaggerated.

Because of social media, things are no different for us.

Sales Tips Wrap Up
In 2010, customers expect perfection from our employers and us. When I say perfection, I mean just that. No errors. There are too many eyes watching and reporting.

Ensure that you follow what is being said about you and your employer on social media. You can lessen any negative mentions by quickly responding before an ember becomes an inferno.

But don’t despair. All of your competitors are working under the same set of rules. The game can also work in reverse. If you do something great, the whole world can know about that too.

©2010 Scott R. Sheaffer