As the New Year begins, it\u2019s natural for sales teams to start thinking about ways to fine-tune their sales forecasting process. Below are some simple rules that will help you and your team improve the accuracy and efficiency of its forecasting.<\/p>\n\n\n\n
The first two rules apply to the common situation where a sales manager must either create a forecast for the coming year \u2026 or \u201csign off\u201d on the viability of a sales target that\u2019s been handed down from on high. Use these first two forecasting rules to ensure that the annual target you commit to is realistic.<\/p>\n\n\n\n
RULE #1. Regardless of how sophisticated the forecasting method, the forecast will only be as accurate as the data you put into it. <\/strong>It doesn\u2019t matter how fancy your software or your formula is. If you feed it irrelevant, inaccurate, or outdated information, it won\u2019t give you good forecasts! Metrics you should record and monitor consistently for each individual salesperson include: total <\/em>conversations I had today with new unique prospects<\/em>; s<\/em>cheduled meetings I set with a clear Up-Front Contract in place <\/em>(no \u201cI\u2019ll drop by Tuesday afternoon\u201d); m<\/em>eetings I went on (physically or virtually) that resulted in a yes or no decision<\/em> (no \u201cmaybe\u201d outcome meetings); c<\/em>losed agreements that created new income for me.<\/em><\/p>\n\n\n\n RULE #2. <\/strong>Forecasts must have STAR (Simple, Timely, Accurate, Reviewed) quality to be useful.<\/strong>Track and update the hard numbers that connect to each of the SIMPLE metrics you just read. Update them each week to keep them TIMELY. Analyze them so you have ongoing ratios that ACCURATELY establish the current patterns that will help you predict future outcomes. REVIEW the numbers weekly in voice-to-voice discussions, either one-on-one with individual salespeople or during group meetings.<\/p>\n\n\n\n The next two rules apply to the situation where you have committed to a goal for your team \u2026 and must now make sure that your compensation scheme actually supports the sales forecast. Here, you must work with each member of the team to create a comprehensive plan that a) carries meaningful personal rewards, and b) turns the team\u2019s sales goal into reality. Follow the next two rules to make sure both outcomes take place!<\/p>\n\n\n\n