Let’s face it. I use phrases like this in my writing a lot (see my last post), but there’s a lot of things that need to be faced!
… Like sales forecasting.
Yes, sales forecasting can be a bit tricky but to your business, it’s absolutely necessary. Accurately forecasting your sales means planning deals, identifying trends and, well, knowing your customer.
Thankfully, there is a science to forecasting (and I love science, so this makes me super happy). However, applying actionable steps to forecasting can be overwhelming which will very likely end in these disasters:
1. Don’t assume that giving your buyer a discount will speed up their decision to commit.
If your customer isn’t ready to buy, an incentive will not make them decide any faster. Take it slow and get them deeper into the sales cycle before you start offering any incentive.
You wouldn’t ask someone to marry you on a first date and expect a ‘yes,’ would you? In fact, if a lovely gentleman asked me to marry him on the first date, I’d make a list of demands and ensure that he actually has the ring (aka the incentive) before I even considered the proposal. Why? Because I want to see:
1. How badly he wants to marry me.
2. If his values line up with mine.
Apply the same scenario to your buyer. They likely only have a vague idea what your company does, and how your company can solve their problem. Customers also take time to see if a product and company aligns with their current or future needs.
Many salespeople assume that buyers drag their feet due to price, but it that really true? It’s your duty to discover the truth about the root cause of their feet dragging and chances are it’s due to lack of information.
What you need to do is ask your buyer questions! Find out what your buyer wants out of the product and find out why they’re hesitating to try it. Once you get those answers, analyze your list of products to find out which one will help them achieve their goals – helping to make the transition closer to a closed deal as painless as possible.
2. Include repeatable milestones in your sales process
We all have a morning routine, but what’s your sales routine? Do you reach out to the buyer, set up a phone call, then a meeting, give them a week consider it, then send more information before you send a proposal, and there do you work to gain their approval before moving through further negotiations? What has the buyer done through all of these steps?
If you’re unsure of where to go next, start by reviewing the basics.
Make sure you capture your lead by getting your prospective buyer’s contact information so you have a way to reach out to them.
If they’re quite hesitant, offer a trial – give them a taste of what they could get out of your product, which will then lead you right into talking about the good stuff, money.
Once the buyer sees the value in the product, it’s a great way to introduce the price along with any added value.
Last, build a long-term relationship with that buyer. Just because you closed the sale, does not mean you have to close the relationship! At one point or another, you’re going to try to sell that buyer the newer, better product and you’ll have that relationship to fall back on that will make the selling process a lot easier.
3. We like to forecast sales on our own timeline, but we shouldn’t
Have you forgotten that you’re the not the most important driver throughout the sale? If you have, I’ll remind you of something: the client needs to move at a pace that they’re comfortable with.
If you haven’t made a sale all month long, pressuring your last customer of the month is unlikely to get you the results that you need. They are indifferent whether you earn a commission or not.
So you might as well focus on your buyer and their needs
What does their buying journey look like? Here are some resources to start mapping out the journey so that you better understand the customer's mindset toward the sale:
4. Don’t forget to adjust the forecast
A sales forecast is just a snapshot of a moment in time, albeit a hopeful future in which sales have been made. If you don’t update it to reflect present realities and future ‘what-ifs’, it becomes less accurate as time goes by.
People’s needs change, sales teams’ goals change, products change and therefore so do sales deals. Prepare for this by mapping out a backward sales pipeline that articulates an end goal and timeframe, and works toward present day. This type of map, coupled with an understanding of industry sales best practices and past mistakes, will change your perception of your pipeline, guaranteed.
There you have it! The top 4 truths that business owners and sales reps need to understand when they’re forecasting, with key action items to ensure you get real results.
Learn more about Dryrun and how it can help you prepare for growth, manage your cash flow, and evaluate your business options.