I was with a client this past week and the subject of forecasting came up. He's very focused on doing it well and consistently.
After the meeting it occurred to me that he was obsessed with it. It's not a judgment, just an observation. He's not the only VP of Sales I know who is really intent on perfecting it. But it made me think, with all this focus on forecasting is there any negative repercussion to it?
Don't shoot me - I'm just the messenger.
Another way to look at it is how does an intense focus on accurately forecasting help the salesforce achieve its objectives and be productive?
What are the pros and cons of an intense focus on getting forecasting right?
Let me know what you think.
Saturday, May 31, 2008
Friday, May 16, 2008
How Real is Your Sales Funnel?
Would you bet your next paycheck that the sales funnel you're looking at is real?
The sales funnel (pipeline) is getting more attention these days. This is definitely a good thing, given its pivotal role in a company's overall sales process. This attention is largely being fueled by the software and 'saas' companies (like salesforce.com) providing CRM and salesforce automation services.
The focus on CRM has given managers, reps and the head of sales a visibility of the sales funnel like never before. Visibility makes it possible to run reports, analyze, and be more productive at working the funnel.
In the draft of these path cutters is something that's being missed - low integrity of the data that's on the sales funnel.
What's the cost? Missed forecasts, insufficient prospecting, chasing bad deals, low productivity, longer sales cycles, lower hit rates, missed quotas.
A client of mine recently said his CRM investment is a mixed blessing. He's got visibility in one place, but he's got very low confidence in the funnel data he's looking at. Another client tells me he routinely cuts by 50% the forecast his salespeople send him. He has little confidence that they're giving him accurate forecast information.
So the first VP used to spend lots of time gathering funnels from all his managers and reps, and now he spends lots of time trying to determine what's real and what's not.
This missing link is good funnel data. Funnels of high integrity.
You know what integrity means: honesty, wholeness, soundness. In a word I'll say how real. And funnel integrity? How real is the sales funnel information on the funnel.
For example, is that deal at stage 3 really a $300,000 deal? Or is it a $75,000 deal that might lead later to a $225,000 deal? And if it might, then it also might not.
CRM's not the bad guy here. It's just that VPs who hoped that CRM investments would transform the accuracy and consistency of their forecasting and funnel data integrity underestimated the continued effort it would take to get the outcome they were buying.
The VPs and sales managers need to refocus on the funnel process itself, especially the funnel stages. Those stage definitions are the key to accurate placement of the opportunity. If the stages are misleading or not defined at all, the rep's more likely to place the opportunities at the wrong stage and he or she will have bad funnel data. If one hundred salespeople place 100 sales opportunities at the wrong funnel stage, now the VP of sales has a real problem on her hands.
Here's something to think about:
1) What's your confidence level in how real your funnel data is?
2) What adjustments do you make to compensate for less than 100% confidence, and how consistent and accurate are you in those adjustments?
3) What else would you be doing if you didn't have to spend your time making those adjustments every week, every month, every quarter?
The sales funnel (pipeline) is getting more attention these days. This is definitely a good thing, given its pivotal role in a company's overall sales process. This attention is largely being fueled by the software and 'saas' companies (like salesforce.com) providing CRM and salesforce automation services.
The focus on CRM has given managers, reps and the head of sales a visibility of the sales funnel like never before. Visibility makes it possible to run reports, analyze, and be more productive at working the funnel.
In the draft of these path cutters is something that's being missed - low integrity of the data that's on the sales funnel.
What's the cost? Missed forecasts, insufficient prospecting, chasing bad deals, low productivity, longer sales cycles, lower hit rates, missed quotas.
A client of mine recently said his CRM investment is a mixed blessing. He's got visibility in one place, but he's got very low confidence in the funnel data he's looking at. Another client tells me he routinely cuts by 50% the forecast his salespeople send him. He has little confidence that they're giving him accurate forecast information.
So the first VP used to spend lots of time gathering funnels from all his managers and reps, and now he spends lots of time trying to determine what's real and what's not.
This missing link is good funnel data. Funnels of high integrity.
You know what integrity means: honesty, wholeness, soundness. In a word I'll say how real. And funnel integrity? How real is the sales funnel information on the funnel.
For example, is that deal at stage 3 really a $300,000 deal? Or is it a $75,000 deal that might lead later to a $225,000 deal? And if it might, then it also might not.
CRM's not the bad guy here. It's just that VPs who hoped that CRM investments would transform the accuracy and consistency of their forecasting and funnel data integrity underestimated the continued effort it would take to get the outcome they were buying.
The VPs and sales managers need to refocus on the funnel process itself, especially the funnel stages. Those stage definitions are the key to accurate placement of the opportunity. If the stages are misleading or not defined at all, the rep's more likely to place the opportunities at the wrong stage and he or she will have bad funnel data. If one hundred salespeople place 100 sales opportunities at the wrong funnel stage, now the VP of sales has a real problem on her hands.
Here's something to think about:
1) What's your confidence level in how real your funnel data is?
2) What adjustments do you make to compensate for less than 100% confidence, and how consistent and accurate are you in those adjustments?
3) What else would you be doing if you didn't have to spend your time making those adjustments every week, every month, every quarter?
Thursday, May 15, 2008
What Every Person Must Know About Selling
Welcome to the new blog of Breakthrough SalesPerformance. We're a sales consulting company in its thirteenth year of operation. I'm CEO and Founder Mark Sellers.
Recently, I published my first book called The Funnel Principle: What Every Salesperson Must Know About Selling. We're thrilled with the reception and recognition the book is getting. Gerhard Gschwandtner, Selling Power magazine's Publisher called it "a terrific new book". Hank Babiarz, former EVP Sales of GA Braun said "The Funnel Principle gives you the edge to consistently compete and win."
Since this is the first posting of our blog It's Time to Rethink the FunnelTM and you're a busy person, I'll get right to the point: What is it that every salesperson must know about selling?
It's simple: the sales funnel is perhaps the tool with the greatest potential for helping a salesperson achieve the one thing that he or she will be most remembered for at the end of the year - you know this - it's achieving quota.
Why is this true? Quota is the mission of the salesperson. Quota is all about net new sales. And the funnel is all about net new sales. It's the one tool in the bag that is exclusively and entirely focused on achieving quota.
Therefore, you'd better get good at it fast. Look only to today's tough business climate for justification that your funnel had better be full enough of real sales opportunities. Otherwise, it'll be a long off season.
One of the reasons a sales funnel is so valuable is that it provides leading indicator information. A quick example of a leading indicator is a heart rate monitor for marathon runners and other athletes. They use it during training to know how much stress they're putting on their heart, and to know to back off or push themselves even harder.
In sales, your funnel data is leading indicator information because the sales are in progress and represent future potential revenue. (A closed sale is a lagging indicator). The total dollar value of those funnel opportunities tells you something important about your chances of ultimately hitting your quota at year's end. Like the heart rate monitor lets you back off or push harder, the funnel value tells you to fill that funnel more, or to shift more attention to already qualified leads. If the dollar value is low and keeps you awake at night, there's still time to change that. Unless of course you've waited too long to know what that dollar value is.
When you put a process to knowing your funnel value it becomes one of the most valuable assets you have. And it will pay off for you year after year.
For more information about maximizing your use of the sales funnel visit our websites http://www.funnelprinciple.com/ and http://www.breakthrough-sales.com/ and download resources like Tips to Breakthrough series and Breakthrough Case Studies.
Recently, I published my first book called The Funnel Principle: What Every Salesperson Must Know About Selling. We're thrilled with the reception and recognition the book is getting. Gerhard Gschwandtner, Selling Power magazine's Publisher called it "a terrific new book". Hank Babiarz, former EVP Sales of GA Braun said "The Funnel Principle gives you the edge to consistently compete and win."
Since this is the first posting of our blog It's Time to Rethink the FunnelTM and you're a busy person, I'll get right to the point: What is it that every salesperson must know about selling?
It's simple: the sales funnel is perhaps the tool with the greatest potential for helping a salesperson achieve the one thing that he or she will be most remembered for at the end of the year - you know this - it's achieving quota.
Why is this true? Quota is the mission of the salesperson. Quota is all about net new sales. And the funnel is all about net new sales. It's the one tool in the bag that is exclusively and entirely focused on achieving quota.
Therefore, you'd better get good at it fast. Look only to today's tough business climate for justification that your funnel had better be full enough of real sales opportunities. Otherwise, it'll be a long off season.
One of the reasons a sales funnel is so valuable is that it provides leading indicator information. A quick example of a leading indicator is a heart rate monitor for marathon runners and other athletes. They use it during training to know how much stress they're putting on their heart, and to know to back off or push themselves even harder.
In sales, your funnel data is leading indicator information because the sales are in progress and represent future potential revenue. (A closed sale is a lagging indicator). The total dollar value of those funnel opportunities tells you something important about your chances of ultimately hitting your quota at year's end. Like the heart rate monitor lets you back off or push harder, the funnel value tells you to fill that funnel more, or to shift more attention to already qualified leads. If the dollar value is low and keeps you awake at night, there's still time to change that. Unless of course you've waited too long to know what that dollar value is.
When you put a process to knowing your funnel value it becomes one of the most valuable assets you have. And it will pay off for you year after year.
For more information about maximizing your use of the sales funnel visit our websites http://www.funnelprinciple.com/ and http://www.breakthrough-sales.com/ and download resources like Tips to Breakthrough series and Breakthrough Case Studies.
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