Forecasting Should Come From Leadership

Sales forecastingFor a company to properly forecast they must be able to define the exact thing that they are looking to determine the future actions for. This idea may vary between different businesses, and it is important to clearly identify the essential needs for each prediction, according to Barrett Riddleberger, the chief executive officer (CEO) of Resolution Systems, Inc., a sales training and consulting firm.

A sales management team needs to know how to effectively forecast the next round of sales and purchases, as their representatives rely on this information to garner more business and eliminate clients that are not bringing in enough business.

Though the business of forecasting begins with the managers, the entire sales force needs to be involved in the process, as input is needed from each part of the department. A successful prediction can only be generated through a consolidation of ideas from within the company that also incorporates possible outside influences.

These outside influences may change throughout the process and adjustments need to be made in order to prevent a prediction from excluding key information. Simply adding numbers together with client data and revenue streams may provide a dollar value, but this represents a basic sample of forecasting, Inc.com reported.

Leadership should determine what information is needed from the sales team, which deals may remain outstanding, at what stage a possible deal is at and the true size of the pipeline, Riddleberger noted.

The company needs to make an intelligent business decision based on the information that needs to be identified. Many aspects of sales and product lines might be involved, such as the inventory, cash flow and budget, according to the executive.

“Once that exists, the next step is how do you remove ambiguity? You need to be very specific,” Riddleberger noted. “Clear communication must exist from the top down from the sales manager to the rep to the rest of the team.”

After all of the data is compiled, it is up to the managers to help representatives determine which customers are actually worth pursuing based on their bottom line.

“An unqualified buyer could go through the entire sales process, with the rep changing the stage along to way, all the way up to 90 percent without it ever having a chance of closing.,” the executive noted. “Defined qualifications should exist before moving a prospect to the next stage otherwise you run the risk of a false readout.”