Come-on, we have all done it at one time or another.  You know, produced a sales forecast out of thin air.  Heck, back in the day it was all but required.  “Jim, what does your gut tell you the sales team can do this quarter?”  BTW – by “back in the day,” I mean a few years back when the economy was flowing, fat marketing budgets ruled the day and the question was how much over quota will would go.  Times have changed my friends, and we must change with them.

Out there in the blogosphere there is a raging debate about sales forecasting, sales and marketing working together, whether or not marketing even knows or cares what the sales quota is, and so on.  Read thirteen different experts, and get thirteen different opinions.  What I find interesting about some of the musings is that they seem void of the thought of an external world.  They write about internal process and procedure.  The truth is that forecasting has as much to do with what the market will give as how you are going to capture it.   It is great that the budget is set and the target is 15% sales growth.  However, if the dynamics of the market will not allow for it, and your universe of names will not support it, then great cooperation between sales and marketing and a massive budget will only l ead you to disappointment.

For success, the marketplace has to be ripe.  Sales and Marketing have to work hand in hand, operations have to be in sync with the efforts, and all groups have to be properly funded.  Lastly, you have to know your numbers, not just your desires.

As my mom used to say, I am not just talking through my hat.  I actually have the experience and have managed a sales team that produced over 700 million dollars in financial services sales, had a budget of 11 million dollars per year, and a direct marketing budget north of 1 million dollars per month.  Those are big numbers.  We had to makes sales, marketing and operations work together flawlessly.  Trust me, everyone had a seat at the table and everyone signed off on the plan.  No blame and no winning.  We would win or lose together.

“So Ken, how can Lead Management play its part?”

Good question, thanks for bringing me back on track.  Prior to bringing all groups together to plan the sales year and forecast, we would spend several days with the data collected from our lead management platform.  After all, this is a treasure chest of quantitative data. We would examine our universe of opportunities (contacts, customers and prospects) and gain understanding into all of the moving parts.  We would compare year over year metrics to determine trends, we would examine new customer revenue vs. existing customer sales.  We would break out customers and prospects that did not purchase this year but are likely to purchase next year.  The list goes on and on and gets quite detailed.  The point is, our lead management platform not only housed the historical past, it served as a predictor of the future.

In addition to sales related data, we could break out effort related data.  This is the nuts and bolts of lead management software and the nuts and bolts of running a successful inside sales campaign.  These items often seem mundane and old school, but at their essence, they are the drivers of productivity.  Here are some examples:

Dials to make a contact

Dials to take an application

Call duration for a “no”

Call duration for a completed transaction

Total effort (time) and cost (labor cost) to take an application

Total effort and cost per dollar of revenue created

Total prospects and customers within the universe

Total prospects and customers no longer available

Estimated size that the universe of prospects can grow by

Labor needed to reach total universe

The list can be a mile long and as detailed as someone wants and needs it to be.  The point is, a lead management platform is a treasure chest of data.  You can chunk the crystal ball.  You have data.  I can’t stress that enough…  You have DATA.

When you forecast with hard numbers that are built from the bottom up you are going to get close on the effort (labor) and have incredible visibility into what each name in your database is capable of producing.  When you, your CEO, or the owner of your business says lets grow by 30% next year, wouldn’t it be really nice to come back within a few days and say this is exactly the head count we need, the number of calls we will need to make and the size the database will need to be?  Lead Management Software carries you a step closer to that world.

On a closing note, I had coffee the other day with a friend that works for a very well known and large company.  He is a top level sales guy (who replaced the last high level sales guy that missed quota).  He was asking me about VanillaSoft just for himself.  It seems that the very large company does not have a lead management platform in place.  They seem to think their salespeople are too high level, too important, to have to conform to such a primitive tool.  Funny, as my friend is working hard to make sales and work his territory, he has no data; no starting point about what has already been worked and what is a possibility to be worked.  He will make the easy sales, struggle to make the hard ones, and leave frustrated.  When he departs, he too will leave behind the absence of a roadmap, a footpath.  There will be no treasure chest of data to forecast from.  I find this sad. Not because I peddle lead management software, but because, at its core, it is just wrong.  It is not fair to the sales people or to the marketplace.  I guess the only one to benefit is, possibly, the maker of the crystal ball.

Good selling,