Once upon a time, anyone who wanted to tell the weather just had to look up at the sky. Weather forecasting was an art of cloud-reading, with a little astrology thrown in. It didn’t work very well, but that’s all they had to work with, so they made do.
Then, in 1835, the electric telegraph was invented. Before that, people had to base their weather predictions on their immediate environment. But suddenly, with this new technology, they could see what was happening hundreds and thousands of miles away.
From that point on, weather forecasting dramatically improved, and for one concrete reason: they had better data.
Sales Leaders are also tasked with making forecasts. Sales pipelines aren’t as chaotic as the weather, hopefully, but they can be frustratingly unpredictable. An accurate sales forecast is useful at all levels of the business, and likewise, an inaccurate forecast can be damaging across the organization.
Every sales pipeline is comprised of a mix of prospects. Some know they have a problem, but don’t know that there’s a solution. Others know that a solution exists, but don’t know how to choose the best product. And some prospects know about your company’s offering, but don’t know how it can help them. It’s the Sales Leader’s job to help your sales teams move unqualified prospects past these obstacles to the end of the pipeline, when the sale is closed and payment is made. Sales forecasts are an indispensable tool for defining the territories, establishing the quotas, and designing the incentive plans that will motivate salespeople to sell successfully.
To do this, Sales Leaders need accurate, far-reaching data. Some data is easily elicited from the existing sales process, as sales reps log their activities, but strong sales forecasts require more than the basics.
A high-quality Sales Performance Management solution offers visibility into every important metric, such as the average size of the sale, cycle time, conversation rate, closing rate, and funnel leakage.
To see how your sales organization can make better forecasts, learn more about Obero SPM’s Sales and Revenue Management module.