By now, you should have already completed your sales forecasting for 2024 and be well on your way to laying the groundwork for a wildly successful year. Sometimes I find, however, that many companies still struggle with gathering the pertinent information they need to accurately gauge the effectiveness of their selling and business development efforts.
Sales has traditionally been an intuition-driven profession, more akin to a guessing game: “What’s in your pipeline? What do you think is going to close?” But, these days, that approach puts organizations at a major competitive disadvantage.
In this data-driven era, sales leaders need to make decisions in response to real-world market changes, up-to-date assessments of the marketplace, knowledge of the customer and their preferences, awareness of the competition and company-wide data trends. Relying on opinion, or “gut feel,” means losing ground in that marketplace, particularly when it comes to forecasting sales and revenue. If, after a month into the New Year, your company is still “trying to hit a moving target,” here are some thoughts.
As the cost of acquiring new customers continues to rise, sales teams are challenged with forecasting more effectively, which often means selling more efficiently. This is what customer relationship management systems, like HubSpot, are designed to do. These tools make data-driven forecasting easier by collecting, and using, specific metrics to inform all sales decisions, such as:
Deal creation
Sales activities (e.g., phone calls, email outreach, in-person meetings, etc.)
Average revenue per sale
Average length of sales cycle
Percentage of revenue from new business
Percentage of reps achieving quota
Sales leads by source
Cost of selling as a percentage of revenue generated
Using this type of data can help you, and your reps, create more accurate forecasts, improve productivity and save precious resources wasted in pursuing customers who aren’t a good fit for your product or service. Implementing a data-driven approach can streamline your sales process in a way that maximizes revenue and business impact – and gives the company’s senior leadership a more accurate picture of what kind of revenue is forthcoming.
Once we gather that data, however, you also need to gauge exactly where your reps are in the sales cycle, with regard to managing each particular deal. That’s where sales pipeline management software, working in conjunction with your CRM, enters the picture. One such tool is DealIQ, which allows management to better monitor the progress of deals and more accurately forecast revenue. The system gathers, and leverages, Seven Imperatives that help determine the likelihood of closing each opportunity, including:
Who are the buyers?
Who are the influencers?
Who’s our competitor?
Why will we win the deal?
Why will we lose the deal?
What are the key milestones?
What have we taught them?
…and it integrates seamlessly with most major CRMs: Salesforce, Hubspot, Microsoft Dynamics, Pipedrive, etc.
For most organizations, however, this transition from intuitive to data-driven processes does not happen overnight. When moving to a hybrid sales process, it is important to understand that your team can’t just flip a switch and make the change.
To adopt this kind of data-driven selling process, your sales team needs to be aware of what you want them to do. They need the knowledge of how to do it. And, they need a safe place to apply that knowledge, to practice, fail and learn. They will need to learn to use new tools, develop new skills and begin to form new habits, all of which takes time and repetition. Your job, as the leader, is to provide those tools, create those opportunities and coach your team through the learning process.
You’ve heard the old axiom “knowledge is power.” In today’s ever-competitive environment, the more knowledge a company has about the dynamics of their new business prospecting and selling efforts, the higher the likelihood that their lofty revenue projections and expectations will be attained. Resources, like a good CRM and pipeline management software, are keys to unlocking the performance code for your team and generating meaningful data that connects to data-driven sales forecasts … as opposed to hunches and best guesses. ♦
Jim Marshall is owner, and president, of Sandler Training of Tampa Bay, which provides sales, corporate and management training to high-achieving companies and individuals. Contact him at 813.287.1500 or [email protected].