Business relies on data points to forecast accurately, says Mark Zokle. Are numbers the only information a company needs to plan ahead? Read on for more insight from Mark Zokle.
Q: How important are accurate sales forecasts?
Mark Zokle: Sales forecasts helps companies determine target revenue, deadlines, inventory, and can influence whether or not a company decides to increase or downsize its workforce. Having a reliable projection of future sales is vital to most businesses.
Q: What percentage of sales forecasts are correct and what can a manager do to ensure data accuracy?
Mark Zokle: It has been estimated that only half of all forecasts are correct at any given time. The problem is that the forecasting process doesn’t account for the skills of the company’s sales force. In order to predict how much a company can sell, it must determine what each rep is capable of. Using historical data alone does little more than estimate future performance based on outdated information.
Q: How can this challenge be addressed?
Mark Zokle: The first step is to capture data regarding how each rep is doing. Find out where he or she is lacking and then target coaching and training sessions to fill in the gaps. Managers must also be able to interpret sales reps’ self-reported estimations and make adjustments before turning those numbers over to corporate.
Q: Are CRM tools helpful?
Mark Zoke: Absolutely, particularly to help identify where sales should be and what factors could cause those numbers to slump. I’ll use Bob as an example. Bob is the sales manager for ABC, Inc. and has determined that his forecast looks great across all regions. He could play the waiting game to see if those numbers line up with actual sales or he could consult his CRM dashboard to see if his reps have the skills to actually make it happen. The software provides insight into deficiencies so that Bob can make better decisions on where to focus his training and coaching efforts. As a result, Bob’s reps are better prepared to fill Bob’s previous expectations.