Why Your Sales Forecast is Limiting Growth

Denver-Based Sales Leadership Development Available Nationwide

Posted: September 30, 2016

This time of the year is painful for me because I see too many sales managers putting together ineffective forecasts and sales budgets for the upcoming year.  And often, money is being left on the sales table resulting in slow growth or no growth. 

I love teaching the soft and hard skills needed to close sales.  But I also know that many companies could accelerate growth simply by improving their approach to setting sales budgets.    Here are two common mistakes and fixes to create stronger sales forecasts and revenues.   

#1:  Eliminate generic, one size fits all quotas.    This approach requires no thinking or strategy.  The sales manager simply assigns each salesperson a ten percent increase, regardless of each territory/vertical potential or prior year’s sales. 

For example, one salesperson’s territory may warrant a 40 percent increase because of the large number of untapped prospects, a weak competitor or ideal geographic location.  On the flip side, another salesperson is only given a 5 percent increase.  This salesperson has worked a territory or vertical for years and has earned major market share and deep account penetration.    

ALL QUOTA’S ARE NOT CREATED EQUAL.

#2:  Lousy data base.  Most sales organizations feel they have a fairly good data base.  With further analysis and questions, they discover they are missing a really important piece of the sales puzzle:  prospects.  A data base filled with just clients isn’t a data base, it’s a client list.      

When prospects are not clearly defined and visible in the data base, sales goals are set too low.  The total market potential is not visible.   Ask yourself this question.  How much bigger would a sales quota be if the sales manager and salesperson knew there were 500 opportunities in his territory/vertical, not just 50 opportunities?  Bigger opportunity creates bigger goals resulting in larger revenues.

Now I understand there are many other important factors that go into building sales budgets.  Is the company capable of handling increased business and deliver on the promise to customers?  Is there seasonality to the business, resulting in shorter time frames to sell and close business?  Are there macro influences, way out of your control, influencing sales results? 

Consider all of the above.  HOWEVER, pay attention to the points noted above and you will accelerate revenues. 

For more information on how to scale revenues, join us October 13 and 14 at our Ei Sales Management® Boot Camp.  We will be rolling up our sleeves learning how to apply proven principles for revenue acceleration. 

Good Selling!