Are Your Sales Predictions Based in Data or Hope?
I am, for better or worse, really great at hoping. I consider myself a visionary, one who is currently sculpting a career out of helping communities and organizations reach their full potential. It may sound quite inspiring, but there are some circumstances in which my lofty goals and grand vision get out of hand. I am grateful for the more technical people in my life that help keep my daydreams in check.
Truthfully, we all have an idea of how life should be. Many of us spend time imagining what our homes could look like, what our life could turn into, hoping for some level of perfection or organization that we, in many cases, cannot realistically attain. For example, thousands of us have resolutions in the works for 2019, as we spend December in this tension between who we are and what we could be.
You may be wondering what your goals for daily water intake or regular exercise have to do with your sales predictions. Well, if your sales predictions are based in hope--if you have become caught up in visions of what sales could be, rather than utilizing your data--the two targets may not be all that different at all.
When You Wish Upon Your Sales
Scott Edinger at SalesForce calls this kind of idealism applied to sales predictions “wish-casting.” He explains that when extremely high sales rates are predicted or expected in the future, then sales reps will focus on short-term gains just to hit the numbers. Eventually, they’ll use up the short term gains and not have any other leads far enough through the pipeline to be profitable.
This desperate scramble for unrealistic quotas is comparable to setting any personal goal on the basis of an ideal instead of taking current circumstances into account. Many are guilty of doing this with exercise or weight loss goals. They set lofty goals of healthy eating and exercising every morning before they factor in the commute to the gym or the cost of fresh, organic produce.
While a prediction is different than a quota, we still tend to feel the pressure of predictions as if they were quotas. It’s kind of like when your parents predicted you’d be a doctor and you were nervous, perhaps irrationally so, to explain that you wanted to go into business instead. It’s that typical sitcom episode where the boss says “I expect big things from you,” and antics ensue in an effort to impress. We naturally want to live up to people’s predictions of us, which is normal and admirable.
However, if we get too caught up in pursuing aggressive targets, it often comes at the cost of long term growth. If your sales predictions are based on your hopes and not the data, they're most likely distracting you from more substantial progress.
Fortunately, there's plenty of practices managers and CEOs can put into place so that sales predictions remain realistic.
Intentional and proactive coaching
Edinger explains that executive involvement can and should go beyond reviewing and approving forecasts. Forecasts are to be met with a strategy to accompany them. Staying involved in the sales process results in a strategy that “guides and correlates to what happens in the field,” so that predicting and strategizing isn't just an exercise in imagination.
One way to consistently stay involved in the sales process is through sales coaching. And coaching is another one of those aspects of a business that exists in our ideal world, but often gets neglected in real-world practice.
Edinger adds that coaching goes beyond quarterly reviews, and should aim “to develop and improve the performance of your sales team from day one.” It turns out that not only should you be coaching from day one, but you should coach in advance.
That's right. Proactive coaching is a method that tackles coaching situations before problems rear their ugly heads. And just like sales predictions should be based on data, proactive coaching is too. Instead of inspecting and reviewing performance, proactive coaching requires monitoring your teams' activities, noticing patterns in that data, and responding accordingly before any numbers fall too far.
Consistent proactive coaching allows leaders to remain involved in the actual sales process so that predictions remain challenging, but also realistic in accordance with the way sales actually works, and not just how we hope it does.
Mind Your Pipeline
A realistic understanding of the sales process also means understanding your pipeline from end-to-end. It's all too easy to become more dissociated from the early stages of the process the further one climbs the corporate ladder. Edinger warns against this jumping in “just when deals are about to get closed,” because the most valuable outcomes are often the ones that happen before closing happens.
Minding your pipeline also serves to prime the pump so your sales team isn't exhausted trying to reach unrealistic predictions. Your predictions then become not only more realistic, but more sustainable over time.
The Sellers, The Dreamers, and Me
It's all too tempting to get caught up in wish-casting that can lead us to neglect the realities of the sales process. Stay involved in that process through coaching, and maintain your pipeline carefully so that your predictions and your sales hopes don't end up down the drain.