How to achieve your forecasts better
One common frustration I hear from companies relates to not being able to predict their revenue because of inconsistent performance. Some months are great and everyone is celebrating, and other months they are not converting enough business.
In many of the businesses I encounter, a lot of the ‘sales’ is actually ‘order-taking’ and passive, hence when the prospect or client doesn’t act, the business revenue suffers and ‘sales’ teams don’t meet their targets. So while some businesses believe they can ‘forecast’ effectively what their ‘order taking’ team will bring in based on past performance, it is subject to factors outside of the control of the business.
It is important businesses try to control as much of the performance as possible to ensure not just more consistent revenue, but stronger revenue as well. With the Australian new financial year now underway, now is a great time to focus on making a difference for your 12 months ahead.
How to get better at predicting revenue
The first step to forecasting effectively is to be able to ensure your performance is consistent and you understand where that consistency is coming from.
There are common traits that I see in businesses who enjoy not only consistent revenue, but growing revenue. Here’s what they are doing that helps their sales forecasting to be successful:
Consistently prospecting
If you’re not talking to people and you’re not meeting people, you’re not doing business.
The most successful businesses are focussed on ensuring that they are always looking for new business, irrespective of how busy they currently are.
If I had a dollar for every time a business told me that their team are too busy to prospect, I’d have enough money to buy my 7 year old a fleet of life-size recycling trucks that he is obsessed with.
Prospecting is a regular activity, like a weekly meeting or checking your emails. The businesses that leave it to when they have time, are the ones experiencing the largest fluctuations in revenue.
PLOT TWIST: Client work should fit around prospecting, and not the other way around.
Consistently networking, in the right places
Successful businesses are also clear on where they network, how they network and how regularly they network.
Attending an industry event where all your competitors are going is a great way to keep up your trade knowledge, but is unlikely to lead to new business.
Check your local city for events run by business groups, councils and associations where your ideal customers are likely to be.
Then go to the same events and talk with the same people, frequently.
Use a CRM and have a CRM culture
A CRM (customer relationship management) system is software designed to help you convert new business.
PRO TIP: Don’t be fooled by CRM’s telling you that they are designed for sales, when they are really designed for marketing. You need a CRM that has clear sales capability to go along with all the marketing essentials.
The businesses enjoying consistently solid revenue not only have a decent CRM (you don’t need to spend a lot on these), but they have a CRM culture. This means that all activity is entered and reported on, so the business can accurately forecast for the quarters ahead.
The CRM should be the single-source of the truth for new business activity and projected revenue.
They measure new business with sales KPI’s appropriate for professional services (click here to ask me more about this)
What gets measured, gets done.
The successful businesses I see, have implemented KPI’s that drive the activity and behaviour leading to consistent revenue.
This is also one of the biggest and fastest ‘needle movers’ when shifting towards a consistent revenue business.
They have a sales process
Your sales process is the revenue factory within your business.
Businesses operating with a solid sales process, enjoy having the asset of a repeatable system that brings in the revenue. No guess work, no changing things or epic preparations for big opportunities, just a humble process that is followed the same way, every time.
It doesn’t just ensure consistent revenue, it ensures stronger revenue, so you can forecast more accurately and forecast for more.
