Why Accurate Sales Forecasting is so Difficult

Two Sales Directors were talking to each other. “How’s it going?” asks the first. “Great” responds the second, “we are having a fantastic week. The trade show was a big success; we received a lot of positive feedback on our new product. We have been nominated for an industry award, our new website is receiving double the traffic and we have hired a super guy from one of our competitors”

“Same here” says the first, “we didn’t sell anything either!”

Imagine you asked your Production Director whether the company was going to achieve it’s production targets and she replied “Well, I have a pretty good feeling that we might” or the quality director said “things are looking pretty good so far, but this quality thing, it’s really just a numbers game”

So, why do we take this sort of response from our Sales Department?

Typically, it’s for one of three reasons...

1. It’s conceptual. We don’t believe that the job of the sales department is to focus on building systems and processes that give a reliable, predictable, boring outcome. Instead, we get sucked into conversations about the outcomes themselves, about  “exciting opportunities” and “hopefully this deal will close before the end of the month”.

2. It’s technical. We fail to take the time to build an ideal “sales template” and break the sales process down into discrete events. Or we break it down into discrete events but we fail to develop the appropriate skillset to ensure that a binary decision is made at the end of every event. Is this opportunity staying in my pipeline and moving to the next stage in the process, or are they disqualified? Instead we get emotionally attached to every opportunity treating each differently.

3. It’s personal. We hire the wrong people for Sales roles! Sure they have great CV’s and of course they interview well. They can even sell! But will they?  Will they build a reliable, repeatable sales process that will get consistent results over time? We fail to ask the right interview questions like “ What’s your process for ensuring accuracy of your sales forecasting? “What are the criteria you use for keeping an opportunity in your pipeline?” “Describe your current sales process”.

Sales need not be different to manufacturing. Build a process, commit to the actions, fine-tune and you can forecast the outcome.

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