Sales forecasting
I believe that good forecasting techniques contribute so much to an entrepreneurs overall sales effectiveness. Forecasting, of course, provides the salesperson with a current listing of those prospects who, hopefully, will buy product. Forecasting presents the sales manager with an up- to-date summary of projected business. It also can give the current status of each account on the forecast sheet.
Forecasting is an excellent method for monitoring the sales effectiveness of each salesperson. Are new prospects being added to the forecast consistently? This would be a good measure of lead generating techniques. How many prospects appearing on the forecast are actually being sold? In other words, what is the ratio of sales to forecasted leads? Is this closing rate acceptable?
Forecasts should be up- dated weekly once a prospect is registered on your forecast sheet, the account can be removed in only one of three ways. The prospect was sold by us; the prospect was sold by someone else; the prospect decided not to buy at this time.
Your forecast sheets should be simple in form. The account name, phone number, type of equipment projected with dollar amount, the date of prospect registration: these are the essentials which should be listed on each person’s forecast. It is also helpful to designate prospects as A prospects (those expected to close within thirty days), or B
prospects (those accounts which still need work to move them into the A category. These forecasting sheets should be submitted weekly to the sales manager.
The sales manager constructs a summary sheet from the individual forecasts. Each week, all newly registered accounts are added to this summary sheet; accounts are also removed as active prospects according to the criteria noted above, but not deleted from the summary sheet. In effect, the sales manager has a listing of every registered prospect, both sold and unsold. This data base can be of inestimable value for future mailings, territory changes, personal contacts, etc.
From these weekly forecasting sheets, you can prepare an extremely valuable report, revealing the success or failure of the overall sales strategy. Obviously, you now have referenced data for future business. You also have data on lead generating as well as closing effectiveness. This information is listed by individual salesperson, but it also summarizes the entire sales effort.
I might add that it is important to disseminate this information to the salespeople as a self produced rating of their effectiveness. The report simply lists, by salesperson, total prospects, new prospects added during current week, number of prospects closed year-to-date, and percentage of closings relative to prospects registered on forecast sheets.
It seems to me that forecasting reports are the most valuable means a sales manager has to monitor and administer an effective sales program. They provide factual data for the sales manager’s projections to management regarding future business. At a glance, the sales manager can tell the status of all significant business. Each salesperson’s strengths or weaknesses are apparent -not from the subjective judgment of the manager, but rather from the data provided by the salespeople themselves.
A good sales forecasting program can go a long way in establishing high standards, implementing good monitoring techniques, and identifying sales problems that can be corrected.
