5-14-2014
The headline really says it all: When you talk to sales managers these days and ask them about their business, there are two themes that come up almost every time. Sales managers are centered on the issue of needing to win more of the pending business that is being presented, and on the significant need for more accuracy when it comes to forecasting beyond the current month. And, let?s face it, even in-month forecasting can have its challenges.
Let?s tackle these two issues separately ? although, as you already know, they are closely related. If you had a better grip on how to increase your win percentage, forecasting would be much easier.
Three ways to increase your win percentage:
1. Know your numbers. The first thing you need to do is to get a solid understanding of your specific situation. I?m not talking about having a ?good idea? of what percentage of business you are currently winning; I am talking about knowing exactly what percentage of business you?re winning. The numbers you should have are overall win percentage for all business, as well as win percentage by type (transactional vs. direct) and category of business. In addition, you need to have this same information broken out for each salesperson on your sales staff. Getting started with this information will give you a great understanding of where you are and allow you to set performance goals to improve.
2. Don?t present until the client is ready to buy. A significant number of proposals don?t close or are lost simply because the client or prospect wasn?t ready to buy. In fact, in many of these same cases, the client wasn?t even ready for a proposal. A great way to improve in this key area is to simply ask the salesperson to give you the reason she thinks the client is ready for the proposal. You can ask, ?What specifically did the client or prospect say that makes you think they are wanting to see a proposal from you? And do you have any reason to believe they would not say yes on the spot to your proposal?? This sort of discipline will increase the winning percentage of your pending deals.
3. Use the ?no surprise? proposal. You may remember me writing about this in the past, but this is a big deal and worth bringing up again. The concept here is that absolutely everything in the proposal has been discussed and confirmed by the prospect before the proposal is presented. Essentially, there should be no surprises in the proposal and zero reason for it not to be signed off on and confirmed. This one always seems simple in writing about it, but in practice it?s not always done.
Three ways to improve forecasting:
1. Examine what is working now. Take a look at your current system and determine what is working and what?s not. Identify the areas you would like to improve for your particular sales operation. Set specific and measurable goals for your improvement in forecasting. Without setting specific goals, you will never know if you achieved success.
2. Set strict guidelines for how you want your salespeople to predict what they will close and how they?ll finish a month. The old method of ?Tell me where you think you?ll finish next month? is not good enough anymore. Neither is asking them to just look at the business they feel is 85 percent or better ? everyone has a different idea of what ?85 percent chance? means. The more specific you can make your definitions with regard to pending business, the more accurate your forecasts will become.
3. Ask questions and challenge the numbers. In most cases sales managers are basing their forecasts on two primary pieces of information: what the salespeople say they have pending and what they predict they will close, and a look at the remaining inventory for a given period of time. While the inventory part is computer generated and is consistent information, the other is based on a lot of random and most likely inconsistent information. That makes the job of forecasting extremely difficult. Ask your salespeople questions, and challenge the numbers. The best forecasters out there are asking a lot of questions and digging deep, allowing them to forecast more accurately. Big data for radio forecasting is just around the corner. Start today.
Matt Sunshine is EVP of the Center for Sales Strategy. E-mail: mattsunshine@csscenter.com.
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