Forecasting & the Sales Guy

While we as salesman always hate the forecast meetings and calls I want to propogate today that there is something for us as well in it. Meeting forecasts is not only a great feeling but also means a lot of money. But does it end just there I guess there is more to it. All the CRM tools of the world and BI tools are there for the sales guy to see where he going and how far he is from the target. Forecasting can be a tool that help look beyond money. I know it sounds like a fairy tale but I would like to believe some day I too would see much more than I do today.

We all know that the fundamentals of a strong & sound business lies with the accuracy with which the company is able to produce results based on its expectations (forecast). Then there is the fact that there is only one way to pay for our expenses with the income derived from our sales. That would hold for the future, too. While Demand generation and forecasting are the backbone to Sales. Forecasting also allows decision makers to take decisions that would give direction to the company in the future.

There a ton of applications that take the forecasting data to the ERP systems and help in scheduling production and reduce the cost of excess. It helps Optimize the functioning of all the departments and brings the all necessary harmony in the company. Though this is not new but challenging times bring with it new set of imbalances. While it is important to keep a close eye on the goal that we had set out for, it is equally important to set balances at every point and do a reality check before these goals are revised. I was recently going through a paper published by Robert Murdick, How they figure the sales forecast. It primarily talks about all the different elements involved in sales forecasting. It was interesting to learn things like judgemental forecasting. Though i have been in sales for a while now this was a term that we always used but never knew that this is an established science.

Judgemental Forecasting comprises of executive Judgement & sales force composite. Executive Judgement is just as it sounds, it depends on an individuals judgement about the market, business conditions, experience, etc. This method is the oldest and the most simplest method but usually very inaccurate, tends to overlook market trends and is limited to the attributes of an individual.

Sales Force composite or group forecasts are the more relevant and commonly used practise in sales organisation where the salesmen usually calls his number based on the market preferences, field visits, competitors activities. Each salesman estimates the sales in his territory for the period or year ahead. The Territory manager than reviews and make adjustmentsfor the chronic optimist or pessimists.

Sales Forecast = Last year's Sales x (Sales to date this year/sales to the above date in the past year). There are so many such equations that makes sales forecasting a very interesting area of business that a lot of small and emerging companies do not pay attention to. The very fact that there are a ton of business analysts working on most of this we as sales guys are turning a blind eye to an opportunity for us to grow simply by looking ahead of time and understand the business objectives. Making simple suggestion and keeping track of business trends therefore becomes the most important characteristics of a sales guy.

I am not sure if my suggestions would make any difference in the company or will they even look at it. This is a challenge that we all face but I am sure you would agree that if your suggestion is ahead of time (visionary) and justifies itself with the business trends you have made a significant progress in your approach and contribution to building a truly dynamic sales team.