Gartner has recently advised businesses to review their forecasting methods and use more predictive indicators on the dashboard to weather the storm of Covid-19. However, even during more normal times, less than 50% of sales leaders indicate they have high confidence in sales forecasting accuracy.
A forensic understanding of the pipeline enables leaders to manage based on fact. Key to this is being able to forecast accurately. Closed loop management processes are also essential to reveal shifting customer priorities and capture latent opportunities.
Salespeople do what their managers measure. Responsibility for the sales function means achieving sufficient control over seller activities to ensure predictable, reliable and consistent business results.
We have explained in our previous blog, How to create a Framework for Robust Sales Process Management, how efficiency measures paint a picture of a busy sales team but negate data on the true quality of opportunities, leaving teams wasting valuable time on deals they will lose.
A robust opportunity management process can identify early warning signs of slips and insufficient winnable business so remedial action plans can be built. Inspections points should therefore be based on events that make up the sales process. Inspect the process and measure the quality of outcome from each event. It is the results of these events that are important.
We suggest attending to four key areas of inspection.
Prospecting activity or pipeline generation metrics that drive awareness should reflect the number of C-level engagements, hunting licences, timetables agreed and budgets qualified.
Coverage should be managed by a process that optimises the costs of doing business. By deploying a powerful qualification methodology, sellers will focus only on deals that are winnable. Inspection points that ask what issues were identified from the last qualification review must feed into this.
Inspection points that focus on productivity monitor the use of selling hours. The premise being that to increase sales we must use selling time effectively. There are four key levers to measure: available selling hours, conversion rates, velocity and transaction value. Sales leaders should measure each and be able to support sellers in ways each can be improved; the cumulative effect can have a significant impact on the top-level numbers. (We will describe this in more detail in our next blog).
Customer relationships are measured by monitoring revenue and product/services growth and investigating changes in loss rates. Inspect how many account reviews have been done, how many organisation charts have been collected and more importantly whether business needs have been identified.
The gathering of inspection data should not be counterproductive. So many organisations put onerous reporting requirements on their sales force that are resented. Data should only be asked for if it is going to be used to make decisions. Otherwise, the task becomes more of an impediment, negating the value of the knowledge created.
Explore with sales staff, the various stages of the sale and the number of variables that exist throughout the lifecycle. Examine what inspection criteria would work best for your business and set quality parameters in your CRM that focus on how staff are engaging with customers. If done as a collaborative process, the team will be crystal clear on what is expected.
By adopting closed loop processes, inspections criteria can be continually evaluated and refined based on individual deal data ensuring the business is able to quickly respond to change.
We are seeing agile businesses providing sellers with guidance on key messages to use and pre-approved solutions to common customer barriers to close deals. Both of which can alleviate any incorrect assumptions customers may have made about doing business during this time.
Such initiatives are made possible only when a strong closed loop process exists pulling through qualitative data from customer engagements.
The end result, of course, is greater forecasting accuracy, a common language amongst sellers and greater control of the sales function.
To find out more about how we help businesses with their inspection practices please take a look at our Performance Management solutions.