Sales Forecasting

Marketing

Sales Forecasting
by Tim Connor



One of the weakest skills of many salespeople is the ability to accurately forecast future sales results. Sales managers and sales executives are constantly asking for bottom-up estimates of sales results. Over the years, I have interviewed hundreds of salespeople from a variety of organizations, and one of the questions I have asked is, “How do you arrive at an accurate forecast of potential sales for your management team?”  The answer is almost always the same: “I give them what they want to hear.”  There are a number of factors that contribute to the ability to develop an accurate sales forecast. Some of them are:

The strengths and weaknesses of the organization.

The sales philosophy of competitors.

The trend toward downsizing, restructuring and reorganization.

The changing needs of the market place.

The changing needs of customers.

The ability of customers and prospects to use the Internet for comparative research and shopping.

Increased competition from offshore organizations.

The increasing difficulty to get to decision-makers.

The trend toward client partnering with current vendors.

The interdependence of organizations for parts, distribution and R & D.

Uncertain economic trends.

A lack of accurate sales knowledge by the sales staff of customer goals, needs, and demographics.

Top-down pressure for increased sales margins, volume and customer loyalty.

The strengths of competitors.

The fickle nature of some customers.

Increased involvement of a variety of departments in the decision process.

The drive toward lower prices.

With all of these factors in mind – the salesperson has to attempt to accurately forecast next quarter’s or year’s sales results. A Herculean task under the best of circumstances.

There is only one way to effectively forecast future sales growth and results. It is to take all of the above into consideration. Unfortunately, most salespeople neither have the time nor the skill to accomplish this task. Therefore, they just give senior management what it asks for – a number – in the hopes that a miracle takes place in their territory and everything cooperates in order to come close to this objective.


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Tim Connor, CSP, is a professional speaker and expert in the fields of management, sales, team building, and customer service. He's the author of 19 books and can be reached at 704-895-1230, speaker@bellsouth.net or www.timconnor.com.