Recently I wrote about how to identify your b2b sales process and then identifying the major steps in the process – the sales milestones. These are important to you since they are like having a road map to gaining b2b sales success.
So in this b2b sales tips on sales forecasting, I will explain how to use the milestones to gain an accurate picture of your sales pipeline.
In most b2b sales processes there will be approximately 5 to 7 key steps or sales milestones. Their characteristics include things like the amount of customer involvement or actions taken by the customer. These actions mean more is invested in the sales process by the potential customer – thus the more they are in the game. The degree of involvement is the key identifier as it relates to becoming a key sales milestone.
Also remember this equation…
Involvement equals Commitment
The more the potential customer is involved in the sales process the more likely it becomes a commitment or contractual agreement.
What are ways to get the potential customer involved? Here is a short list of possible customer involvement steps…
- The customer provides inside information regarding their operations
- You are introduced to several key members within their organization
- They travel to your offices or plants for a walk through, demonstration or meeting
- They travel or interview a current customer of yours to gain information about your solution or offering or performance.
- They openly share financial data and operational plans with you
- They get credit approves for their investment
- Team players are meeting on a regular basis – supply chain, technical, financial, C – level executives and others critical to the implementation.
- A meeting to share and discuss a conceptual agreement relative to your solution or offering.
Now that you have identified these critical steps or milestones, you will need to write them down or draw them out using process diagrams or a straight line with dots along the path to indicate the milestones.
Next you will need to review your previous successful and unsuccessful sales and plotting them on the process line. Look for points where it became a higher probability of success as you moved along the process. Look at the points where a sales opportunity derailed due to a stoppage of movement on the sales process line.
After you have accumulated this data, begin to apply percentages of probability for success relative to a sales opportunity. As you plot these percentages they will begin with a low degree of success, yet, as you move the potential customer down the track the percentage of success increase.
After you have assigned percentage of success probability to the sales process milestones, you can now begin to add your current sales opportunities or sales objectives to the sales process milestone line.
Using the dollar amount of the sales objective to the location on the sales process line, you can multiple the percentage times the dollar amount. Now you have a forecast total based upon your current sales opportunities and their relative position on your b2b sales process.
We have seen accuracy as high as 98% on sales forecasts using this method. One disclaimer for this method is if you are traditional short term b2b sales person – this process will not work for you. You will have to use another method for forecasting including the old standby SWAG ( Scientific Wild-Ass Guess)method. 🙂
By the way, if you know of other methods you have used or are using to accurately forecast your b2b sales please take a moment and fill out the comment form below and share your ideas. I am always open to new and better ideas for sales success. And, you will get the credit for your ideas and information.