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Sales
forecasts
made
simple
Consilium
| s a l e s t r a n s f o r m a t i o n |
In July I won a magnum
of champagne at a
conference for guessing
the n...
Consilium
| s a l e s t r a n s f o r m a t i o n |
There were 2,173 beans in the jar
I guessed 2,138
an error of 35 or 1....
Consilium
| s a l e s t r a n s f o r m a t i o n |
Would that sales forecasts
were always as accurate,
and on the safe si...
Consilium
| s a l e s t r a n s f o r m a t i o n |
Forecasting is tough!
► There are many methods, companies ask their sa...
Consilium
| s a l e s t r a n s f o r m a t i o n |
Simple arithmetic rarely works
► % confidence factors are
error prone:...
Consilium
| s a l e s t r a n s f o r m a t i o n |
tests for each
opportunity*
1. Is there a real opportunity?
Are you ce...
Consilium
| s a l e s t r a n s f o r m a t i o n |
Then it’s simple
Rate each sales opportunity ‘A’, ‘B’ or ‘C’:
A Sales ...
I lied about
the arithmetic!
It can work, but
only if you’re BIG.
Consilium
| s a l e s t r a n s f o r m a t i o n |
The wisdom of crowds
► You can sometimes use simple arithmetic if you
...
Examples of the
wisdom of crowds
At a 1906 country fair in Plymouth,
800 people participated in a contest
to estimate the ...
Consilium
| s a l e s t r a n s f o r m a t i o n |
Use the 4 tests and ABC,
but if you must forecast using
simple arithme...
Consilium
| s a l e s t r a n s f o r m a t i o n |
More on the
four tests
here:
Pictures courtesy of Microsoft clip art, Wikimedia and others.
Improve your
sales performance
Sales and marketing
Coaching...
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Sales forecasts made simple

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A simple approach to sales forecasting ... that's all!

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Sales forecasts made simple

  1. 1. Sales forecasts made simple
  2. 2. Consilium | s a l e s t r a n s f o r m a t i o n | In July I won a magnum of champagne at a conference for guessing the number of jelly beans in a large jar.* Fluke, or skill at forecasting? * Thanks to Richardsons the accountants
  3. 3. Consilium | s a l e s t r a n s f o r m a t i o n | There were 2,173 beans in the jar I guessed 2,138 an error of 35 or 1.6%
  4. 4. Consilium | s a l e s t r a n s f o r m a t i o n | Would that sales forecasts were always as accurate, and on the safe side ‒ it’s good to over deliver rather than disappoint. Why are most sales forecasts so inaccurate?
  5. 5. Consilium | s a l e s t r a n s f o r m a t i o n | Forecasting is tough! ► There are many methods, companies ask their sales forces to forecast using measures such as: ● confidence factor ● sales stage ● objective tests ● the customer’s buying process ● requiring them to commit to a number ► Then there are the methods sales people often use: ● “I won’t tell them about this deal, I’m still negotiating my target” ● “I’ll tell them whatever will get the boss off my back while I look for my next job” ► The sales director still has to make an accurate prediction
  6. 6. Consilium | s a l e s t r a n s f o r m a t i o n | Simple arithmetic rarely works ► % confidence factors are error prone: ● in almost any culture ten ‘ten percenters’ don’t make a certain sale ● one man’s 60 percenter is another’s dead cert ● international sales forces will vary according to their culture ► Objective tests are less error prone, but beware; optimists will still fool themselves and the pessimists will avoid committing.
  7. 7. Consilium | s a l e s t r a n s f o r m a t i o n | tests for each opportunity* 1. Is there a real opportunity? Are you certain the prospect will buy something from someone soon? 2. Is it suitable? Is this opportunity a good fit for me and my company? 3. Is it winnable? Or is there an existing supplier who may be impossible to displace? 4. Is it worth it? Given the effort required and the likelihood of success. Use * Part of Consilium’s two page sales plan
  8. 8. Consilium | s a l e s t r a n s f o r m a t i o n | Then it’s simple Rate each sales opportunity ‘A’, ‘B’ or ‘C’: A Sales that are certain to come in B Sales that might just come in C The rest of your sales pipeline Commit to a total of all the ‘A’s. ‘B’s are there as ‘cover’ in case any of the ‘A’s slip or drop out.
  9. 9. I lied about the arithmetic! It can work, but only if you’re BIG.
  10. 10. Consilium | s a l e s t r a n s f o r m a t i o n | The wisdom of crowds ► You can sometimes use simple arithmetic if you are careful and have ● a large sales force, say 100+ ● a large number of unit sales, say 1000+ ► BUT remember to factor this period’s predictions by previous periods’ performance ► It won’t be perfect, but it can act as a guide. The larger the numbers the greater the accuracy … and it won’t be accurate at the level of an individual or even a department. ► You are relying on ‘the wisdom of crowds’
  11. 11. Examples of the wisdom of crowds At a 1906 country fair in Plymouth, 800 people participated in a contest to estimate the weight of a slaughtered and dressed ox. Francis Galton observed that the median guess, 1207 pounds, was accurate to within 1% of the true weight of 1,198 pounds. Just over a century later 40 guesses at Oxford’s Venturefest came within 11.4% of 2,173 jelly beans!
  12. 12. Consilium | s a l e s t r a n s f o r m a t i o n | Use the 4 tests and ABC, but if you must forecast using simple arithmetic, remember SCALE is important!
  13. 13. Consilium | s a l e s t r a n s f o r m a t i o n | More on the four tests here:
  14. 14. Pictures courtesy of Microsoft clip art, Wikimedia and others. Improve your sales performance Sales and marketing Coaching Consultancy Training More sales and marketing insights here

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