The Dangers of Overconfidence in Sales Projections (Entrepreneur Magazine)
The Dangers of Overconfidence in Sales Projections
By Frank Visgatis, President and Chief Operating Officer, CustomerCentric Selling® – The Sales Training Company
The latest CCS Index, released Nov. 17, is compiled with data culled from sales executives across several industries, including those working in the software, high technology, manufacturing and financial services areas. Fifty-eight percent of the sales executives surveyed said they consistently don’t make their top line revenue numbers. Almost 70 percent of the respondents said, however, that they would classify their sellers as as “world-class” or “solid contributors.”
Confused? So are the researchers at my company. These findings, as perplexing and contradictory as they are, tell me this: Sales organizations have their heads in the sand. They are overly confident in their positive assessments about their salespeople, who in turn are overly confident about their opportunities.
This combination kills forecast accuracy. And this blissfully ignorant phenomenon has a trickle-up effect that leads to disaster every quarter and every year’s end. How can America’s businesses succeed like this?
The reality might be painful for organizations to hear but it’s quite simple: You can’t be a world-class salesperson and not achieve sales goals.
It’s time for organizations to completely re-evaluate how salespeople are assessed and the standards set. Redefine what best is. Set your benchmarks for success. Have a sales process in place for people to follow and execute, monitor, manage and adjust when necessary.
To better avoid the downfall at the close of the quarter or year’s end, take precautions early on in the sales cycle. Managers should have their employees perform sanity checks on their list of transactions forecast to close by asking the following two questions:
1. Why would a buyer spend the money you’re asking for now?
Unless or until sellers have revealed the value to show a payback, it’s hard to believe that purchase decisions will be made.
2. Has there been access to the person who authorizes the funding to pay for a sale?
Until sellers gain access to a potential client’s higher-ups, predicting a sale with any degree of certainty is difficult.
In today’s environment, managers should ask similar questions when outside salespeople begin pursuing website visitors write the company or otherwise make inquiries. The good news is that early-on sellers haven’t invested a great deal of time and will be less defensive than if they’ve been working a lead for some time.
To further qualify nurtured leads, establishing value and gaining access to key players is necessary to justify pursuing leads and forecasting sales. Doing quality control at the top decreases the chances of missing numbers later.
The CCS Index also shows that 40 percent of respondents indicated that they’re “not sure” if their organization will be able to make their goals in 2015, based on past and current performance. So not all respondents are burying their heads in the sand.
But 58 percent of respondents reporting not consistently making their numbers is far too big a percentage if organizations want to perform better in 2015.
Close to half of all the survey respondents said they believed that their prospects had already done some sort of research on their company before contacting them, the CCS Index also revealed. This finding supports my company’s thinking about today’s new buyers, as outlined in the book Rethinking the Sales Cycle.
With the advent of the Internet, social media and social networking, many buyers are already more than halfway through the purchasing cycle by the time a seller becomes involved. But most sellers today continue to insult buyer intelligence by failing to grasp this concept, so they continue to lead with introducing the product when the buyer is already informed and educated about a myriad of offerings.
Despite this fact, only half of the survey respondents considered social media to have a “moderate” impact on selling efforts, while 34 percent reported no impact at all.
Here’s another contradiction: Forty-seven percent of respondents said social media will play a bigger role in their selling efforts in 2015. The takeaway from this? Many sellers are failing to give social media the credit it’s due when it comes to buyer intelligence. They realize that social media isn’t going anywhere and might play an even bigger role in 2015, yet they won’t recognize the role it is playing in today’s sales process.
Sellers should realize that social media can serve as a key tool for buyers and also for sellers to network with prospective buyers, find referrals and nurture conversations that could lead to purchase decisions. There’s no doubt that social media will continue to be a strong factor in 2015 and can provide a competitive advantage to those sellers who know how to effectively leverage it.