Sales Forecasting

When managing a sales force, the most difficult process is forecasting sales. The more pressure you place on the sales force, the lower the quality of opportunities that show up in their pipeline and with unrealistic probabilities. Only qualified opportunities should be foretasted.

What is a qualified sales opportunity. No, it is not one just because they agreed to a meeting or a demonstration! You need to regularly do a line by line audit of a sales pipeline to sort out fact from fluff. There are some simple questions to be asked about each opportunity to validate that it is qualified:

1. Is there a budget? Most tire kickers love to meet with sales people to gather intelligence. Vendors are a great source of competitive information, gossip, and price metrics. A qualified buyer has a budget already approved to so something. The salesperson must determine whether there is an approved budget and for what. It will be difficult to pin down an actual amount but it is important to get a definitive yes or no.
2. Is there a definitive mandate to enter into a contract for something like you are selling? You may feel that you provide a better option than what was budgeted, but what was mandated will almost always prevail.
3. Have you determined that there is an acknowledged need for what you provide? You may be selling benefits but do they agree that they need those benefits? Assuming interest because of ongoing dialogue does not cut it. You have to get them to fully acknowledge they have the need.
4. Have they acknowledged you have a potential solution that matches what they are seeking. Too often you will get later surprises if you do not specifically ask. Bravado and assumptions lose the deal.
   

Helping buyers make informed purchase decisions is the primary sales function but proper qualification is the key success factor for your organization at large. Too much energy is wasted and wrong decisions made based upon unqualified sales forecast data. The first phases of the sales cycle are Interest Development and Education and these phases earn the right to ask the above four qualification questions before investing your professional time and organization time further. If you do not have an affirmative on all four, the salesperson must continue to work on the first two phases until you do or you walk away. Forecasting anything until you have qualified opportunities is putting your head in the sand with wishful thinking. Using a forecast to measure salesperson productivity is also a poor metric. Audit each forecast one-on-one with the salesperson and you will see improvement not only in your own forecasting but with salesperson productivity.

Unique Selling Proposition

Build it and they will come. Sounds easy but what is "it"? No matter how many ways we tackle that challenge analytically, the old adage remains true... that you must "find a need and fill it". If you are in any business that is focused on ongoing relationships, what makes you unique must be worthy of repeat transactions with the same customer. No hit and run snake oil scheme will work.

A USP is derived from latent needs. Needs are latent either because the pain has yet to be felt or it has been felt but they have given up looking for a solution that does not appear to exist. Looking at competition will never uncover the latent needs that will inspire your USP. They do not have the answers for you or the need would no longer be latent.

Like most business strategy, the way forward is defined by people, process, and technology.

People - the type of person who can uncover latent pains has a very different profile than you usually have in a business organization. They see possibilities conceptually. You will recognize them as individuals that are often referred to as being composers, architects, and catalysts.

Process - many business strategy books provide useful thought catalytic frameworks that are useful communication tools between the conceptual and non-conceptual people on your team. You absolutely need subject matter expertise through the eyes of those with the latent needs. Most often those in sales and service within your own organization regularly hear about the latent needs but no process exists to collect these thoughts. The key process is scheduling regular latent need review meetings to consider new offerings and the USP of your business.

Technology - these days communication is the key to uncovering latent needs and nothing creates a buzz better than social network optimization. Social media has become the modern Roman Forum for thinking and learning. Your CRM is the other key repository of information that can uncover patterns that suggests latent needs through your records of client interactions.

If you do not have a disciplined process to help you uncover latent needs through your interactions on an ongoing basis, you cannot expect to have a unique selling proposition. The Cirque de Soleil success shows that you can keep creating USP's if you foster an innovative culture that listens to your clients.

Books Provide Inspiration

Let's face it. All business books try to create a packaging according to the KISS formula. Being simplistic does not make them any less inspirational. As humans, we tend to get into a rut and sometimes need a "whack on the side of the head" to see the obvious. Oh, right! That was from an inspirational business book too.

Blue Ocean Strategy

Through some great business strategists, I was recently introduced to this book and concept. In many ways, I find it to be "thinking outside the box" lite. They remind us that all the sharks battle over the same feeding areas creating a "red ocean" and too often forget that there is a larger "blue ocean" with many more uncontested fish that can be had, all of your own.

It was apparent that the authors shoehorned their examples from a rear view mirror perspective to fit the hypothesis. Cirque de Soleil is a good example. The book infers that the founder went through an analytical strategy process to uncover the blue ocean with a new form of entertainment. In actual fact, we used to watch him and his fellow buskers collaborate on the streets of Old Montreal in what looked more like a theatrical jam session. The new offering emerged from trial and error honed to audience feedback and voluntary donations. What led them from coins to billions was simply being very talented and their willingness to pay their dues. There was no instant strategy or Eureka.

The Blue Ocean Strategy analytical premise and tools are very good ones. What we can't forget is that you do not create new winning categories of your own in a vacuum. It is an iterative process of testing reactions and evolving until the market declares you a winner. You have to pay your dues working with and learning from those who can choose you or not.