Over the years, the question- ‘What does it take to be a successful sales manager?’ has been revised, dismantled, and rebuilt to fit into the evolving business ecosystem. Typically, the sales manager came from the ranks of top salespersons and was given a leadership role as a reward without sufficient training.
These days, sales managers may still be hired from among top salespersons, but they are expected to engage with their salespeople, coach them and make way for higher profit/loss ratios. One significant aspect of this role is coming up with a strong forecasting strategy. Incorporating methodologies such as MEDDIC sales training can provide sales managers with a structured approach to coaching and forecasting, enhancing the overall effectiveness of the sales process.
Unfortunately, most sales leaders struggle to keep up. Half of revenue leaders report that it is more difficult than ever to forecast sales, and less than a quarter of organizations feel that they can forecast with 75% accuracy or greater. Many of these challenges could be alleviated by adopting advanced tools like a sales commission calculator and by utilizing customized templates.
Two main issues come to the fore-
- A big part of the challenge is making use of the right tools and processes to achieve accurate forecasts. With a lot of organizations still using legacy systems, it becomes very difficult to accommodate data flow.
- For most organizations, sales forecast templates are limited in their ability to capture unique sales goals and KPIs. Customized templates are not just an add-on, but a necessity.
While there is an abundance of one-size-fits-all templates out there, it is important to acknowledge that these templates were not built with your products and services in mind. It is therefore impossible for them to accurately measure the goals you’re trying to accomplish.
A better approach is to design your sales forecast template internally, keeping in mind your unique KPIs. The ultimate aim should be to create a template that provides a granular and holistic view of your sales performance. Here’s a compilation of the factors you can consider when you’re building a sales forecast template-
What are you forecasting?
Think about the product/service you are forecasting. Forecasts look different for different products! A forecast for a reputable product will be distinct from a forecast for a brand new product. Therefore, narrowing down your strategy to similar products will give a much more accurate forecast. Think of it this way. A startup wanting to expand will be more likely to consider a top-down approach. What this means is that they will rely heavily on external factors, like the market. An old company on the other hand, will use a bottom-up approach. This is because they have an abundance of historical data.
Think of it this way. A startup wanting to expand will be more likely to consider a top-down approach. What this means is that they will rely heavily on external factors, like the market. An old company on the other hand, will use a bottom-up approach. This is because they have an abundance of historical data.
What time periods are you using?
Determining the time periods for your forecasts is extremely important. Ask these questions-
- How granular do you want to get with your data?
- What will your forecast look like? Will it be weekly, monthly or yearly?
Usually, including multiple time periods in your forecast will help you build a more reliable template.
Is your data reliable?
Do you have enough data?
There’s a reason why it’s called Big Data. The aim is to be comprehensive. To collect as much data as is needed for creating a plan that works. The data that you are feeding your CRM needs to be gap-free and have all the relevant information. Remember, the end goal is to have a data set large enough to be turned into actionable insights.
Is your data accurate and trustworthy?
It’s one step forward and two steps backward if you have enough data but do not trust it. In fact, 84 % of CEOs don’t trust the data that they are basing their decisions on according to Forbes. All it takes is one wrong keystroke! Try to minimize errors by reducing manual input and automating your data capturing process.
Is your data uniform?
Think of it this way. Two sales reps may use their own phrases for a similar scenario. One rep may say that your product was ‘too expensive’ while another rep may choose to say a ‘competitor was cheaper’. Simple issues like these may lead to a heterogenous set of data that is hard to work around.
What are the KPIs that you want to track?
One way to achieve this is to ensure that your KPIs pass the SMART standards. Simply address these questions when you’re figuring out which KPI makes the cut-
- Is the KPI specific?
- Can you measure the performance of the KPI?
- Is your KPI attainable?
- Is your KPI relevant to the goals of your organization?
- What is the timeframe for achieving this KPI?
An automated solution with integrations across CRM, ERP, and HRIS can provide sales leaders with the bandwidth and resources to make accurate forecasts by providing real-time insights that drive sales behavior.
To know more about how Incentive Compensation automation can help you with your forecast, book a demo with us!