Few areas of selling are more dicey than sales forecasting. So much so that, inside many companies, the process is so broken it looks like this:
The key turning sales forecasts from the debacle above into a truly useful management tool is to remove as much of the politics as possible. Here's how:
There's nothing wrong with having sales quotas, but the time to talk about those quotas (and compensation) isn't when you're trying to come up with a meaningful projections. This takes some mental discipline on the part of the sales manager, who must resist the temptation to conflate the two activities.
While there's no question that the sales team should be able deliver the sales that are needed to make the company successful, the forecasting process needs to reflect reality, not wishful thinking. Shooting the messenger is dumb. What’s needed is “just the facts” attitude with rewards for getting the facts right.
Part of the problem with the standard scenario is that everybody gets involved, bringing along their own, weird organizational baggage. Marketing, manufacturing, accounting and top management should react to the sales forecast, rather than drive it.
While the forecasting process may be broken within many companies, taking the appropriate steps listed above can help take the politics out of the process and make sales forecasting a truly useful management tool.
Learn even more about how to build a successful sales process with the free e-book below: