Setting expectations in sales forecasts.
More than half of sales forecasts are wrong! Wait a minute, we’ve been doing this for an eternity and the best we can get too is 41% right?
How can this be?
Let’s explore 4 seller personas.
The over confident sales person always forecasting ahead of the number they can believe in and yet persist in putting a bigger number forward.
The price conscious ones who are always talking about price and suggesting they can deliver a higher number, if, they can put forward discounts.
The strategic player who knows her value and that of the solution to her client will always be hedging her bets and delivering the number forecasted.
The under-performer who always misses his number whether it’s high or low and never really knew what they could achieve.
Do you recognise any of these personas on your teams?
You might argue that a mix is healthy. I’d say it’s lazy management and a reluctance to get into deep coaching that prevents a team from over achieving. The high performers resent the under-performers and discounters always envy the strategic players for their ability to close fewer transactions of higher value and so it goes on.
We are human after all and we can’t all be great, can we? I think we can certainly be better. It starts with an honest conversation with ourselves to agree whether we are actually setting the wrong expectation by going in with a higher number than we can see. We should also consider the environment we find ourselves in and whether this is influencing our desire to forecast higher. Being right all the time is not the point here, being right more often and knowing why is.
Coaching at the deal level has been performed in enlightened sales driven companies for many a year and yet many eschew its merits and go it alone, secretly admiring their competitors with envious eyes. Coaching is a skill which can be learned, in fact I’d argue it’s a pre-requisite for those in any leadership role but especially in sales leaders.
Setting the right expectations is founded on good data (knowing about the actual situation) and managing the environment within which the expectation is to be set. Focus on the outcome of providing the wrong forecast and the impact it can have on your career and those to whom you forecast. Find ways to get the help you need to be better and seek new learning under your own steam to get great at something you can learn.
I recall a great sales leader of mine at IBM who spoke of expectation data rather than a forecast. The inference being, this is what you and he expected to happen as opposed to some fluffy forecast. You had to be sure of the number before giving it. This forced me to double check my position and that of others to be as close to certain as I could be. Getting it wrong lead to some very difficult conversations and a lot more work.
So as we move toward the end of 2023, how is your forecast holding up, have you set the right expectations. Can your leadership use this as expectation data and provide accurate and deliverable forecasts up the line? What are the consequences of getting it wrong and can you re-forecast to provide higher accuracy. If the answer is yes, bad news early is better than bad news later. Who can you ask for help from to get better?
Good luck for January and for Q1. It’s all set up to be full of challenge and opportunity in equal measure.
Make of it what you can.
