Over many years, I have reviewed many sales forecasts. There are thousands of books on sales techniques and the life cycle of a sales prospect. However the most difficult prospects to qualify, are the prospects at the initial sales meeting stage. A company can say they have a great sales forecast simply by stating they have lots of prospects and hence the outlook is looking great. However sometimes the business finds the volume of prospects does not convert to customers. The company suffers financially, as they were geared up to a bigger forecast than happened in reality, and unfortunately I have seen companies really struggle to survive.
A common problem is over optimism after meeting a prospect
You can ask a salesperson how the first meeting went, and they will relay what a great meeting they had with the prospect, the salesperson fully understood the business problem but the prospect does not want to do business imminently or does not have an immediate compelling event. However the salesperson STILL wants to put the prospect on the sales forecast system, with a low probability of conversation or puts the prospect on because they believe it may convert in many months time with a high sales probability. The horrible sales qualification word ‘may’.
However after being more rigorous in the sales qualification process, both meeting scenarios, in reality should have equal low percentage forecast and the prospect should go on the marketing database versus the sales forecasting system.
Many businesses have many meetings with potential prospects, and the size of the sales hopper and overall sales forecast, is dramatically altered if these early meetings are well qualified or not.
A very simplified solution to this problem, is to be very pessimistic after every initial prospect meeting, and only allow a revenue and percentage to be put on the sales forecast system, after a second event has occurred, another meeting, a serious telephone conversation, detailed e-mail contact etc
If you would like a second opinion on your sales forecasting techniques, please contact myself Tim Jenner firstname.lastname@example.org or any of my fellow SGBA colleagues.