Sales Predictability

A sales forecast is a business commitment.

You are putting your professional reputation on the line that you will deliver on your forecast promise. By missing your forecast commitments on a regular basis, you are demonstrating a complete lack of visibility into your business. This includes falling short of your forecast as well as dramatically exceeding your own projections.

Successful sales leadership is measured by business results. It sounds simple and oversimplifies the vast responsibilities of a sales executive, but it really comes down to this basic success criteria. C-level executives have confidence in their sales executives when they make their assigned revenue targets on a consistent basis. Great sales leaders hold themselves as well as their team to a higher level of accountability. They understand the importance of adhering to strict process disciplines in managing the sales and marketing opportunities of the company. That is also why the very best sales leaders are also driven by data as a proof point for the effectiveness and efficiency of their sales and marketing teams. This focus on predictive analytics drives better decision-making, leading to stronger business results.

The profession of sales and marketing management is both an art and a science.

The art aspect is the expertise of the sales executive in articulating the business value of his or her solution and how it impacts the business results of the end customer. It includes building relationships with your prospective customers and business partners. It is about earning their trust and confidence in your company’s solution. It is also about earning the right to be called a trusted adviser to your clients. This is never easy and includes not only an in-depth understanding of your company’s product and its salient features but also how your solution will impact your prospective customers’ business.

The science aspect of sales management is very different and in many ways far more challenging to master. The science aspect of sales management is maximizing the visibility into the sales cycle to effectively and efficiently manage sales engagements to close on time. It includes analyzing the trends associated with important key performance indicators to gain insight into the performance of your team and the dynamics of the pipeline. In many ways, it is making the necessary investments to understand the past in order to predict the future.

All companies actively pursue the quest for predictable, profitable revenue growth. Your job as the senior leader of sales and marketing is to deliver these predictable results for your company. Your employer is dependent on your ability to not only make your quarterly business objectives but also predict the outcome of the quarter on a consistent basis. In certain industries, failure at either of these tasks could lead to your termination. That is the fact of life as a sales executive. High stress is just a part of the job. You live your life over quarterly increments. If you make your numbers this quarter, then you live to keep your job for another ninety days. This is the cold, hard truth of the sales profession in many industries. The key to your professionalism as a sales executive is to be accurately predictable with your business commitments.

All three components (predictability, profitability, and growth) represent their own challenges. Growing revenues with profitability requires the efforts of the entire company. But sales predictability typically falls on the shoulders of the sales and marketing leadership team. These executives are responsible for the visibility into the sales pipeline and predicting the transaction flow for the company. It does not matter if the company is privately held or a publically traded entity. The professionalism of any sales and marketing executive is tied to his or her success in producing business results—the integrity of the transactions sold and the visibility into the business to accurately predict when sales engagements will close and revenue is recognized.  Forecast accuracy is a critical component of a sales executive’s responsibility.

The best companies recognize that sales are very dependent on marketing and marketing can’t recognize success without sales. Assessing the analytic interlock between sales and marketing can provide the necessary visibility that could be the difference between success and failure. Marketing traditionally has ownership and the responsibility to nurture the prospects before sales gets involved. This is a very important requirement for any transactional or sales engagement success.

The relationship between sales and marketing can differ dramatically from company to company. The best have sales and marketing leadership that collaborate on all decisions and share equally in the success or failure of their efforts. The worst have leadership styles where credit for success is single-minded and blame for failures lead to finger pointing and resentment. The team that collaborates will have more success. It also leads to a culture that encourages teamwork and joint execution.

Everyone has heard the old adage that nothing happens without a sale. This is true but also overstated. The entire sales process that leads to revenue recognition starts with marketing. This is why having visibility into the effectiveness of the marketing pipeline is as important as visibility into the efficiency of the sales cycle. It requires establishing goals and objectives that are achievable.

Sales and marketing leadership that invest in predictive analytics outperform those who don’t recognize the value of these measurements. Predictive analytics provides critical visibility into the business operations of sales and marketing operations.

This can lead to critical decisions that will lift revenue projections. Sales and marketing leadership can leverage analytics to better understand profitable industry segments. It can also help assess what is required to penetrate new markets. Most importantly, the use of predicative analytics by the sales and marketing organization can enhance their understanding of the buying habits of their valued client targets. Knowledge is truly powerful with forecast accuracy.

This is why this book is so important. It is basically a playbook with which to manage the revenue cycle of your company from marketing lead generation to predicting when key transactions will close. Companies live or die by their ability to predict the future. Wall Street rewards public companies that consistently meet or exceed quarterly revenue and profit projections. Missed revenue projections send the message to Wall Street that the company does not have the required visibility into its business. It lowers shareholder confidence in the company. But this issue is not limited just to public companies. Private companies have a board of directors that holds their CEOs to the same level of accountability. CEOs are exposed when business results differ dramatically from committed business projections.

And the first to be blamed will always be sales management.

The objective of this book is to focus on the science of selling and the process of maximizing the predictability of the sales cycle. It will include best practices in forecast techniques and a variety of sales tools that will assist in the process of predicting sales results on a consistent basis. It also includes a portfolio of key performance indicators that will provide greater insight into your sales and marketing pipeline. This book is designed to help you succeed with your future sales and marketing predictability endeavors.

Remember—what gets measured gets done.