PREDICTS - Gets sales projections right even in difficult market conditions

PREDICTS - Gets sales projections right even in difficult market conditions

Arvind frowned at the spread sheet on his screen. “My sales planning is going haywire” he declared in frustration. Arvind headed Client Relationships for LEN Health Systems that supplied homogenizers, capping machines, pharma checkweighers, extruders, capsule and ampule filling machines and other capital equipment to pharma manufacturers. Despite an uptick in capex spend by pharma companies in the wake of the pandemic, the projections were still way off the mark, particularly with key deals of substantial value

His CEO Deepak was concerned. This volatility in predicting outcomes of large value sales was beginning to tell on other functions like supply chain, production and logistics.

“We need to figure out a sure way to get these sales calls right on the big deals” Deepak said

“The only way is to make my RMs become better at ‘predicting'" Arvind responded “They should be able to get the sales numbers right by assessing the winnability of large value deals. We can’t have a situation where they make projections that end up with huge variances. I plan to equip them all with a Tactical Checklist that I got at my first sales training. Deepak, let me take a few minutes of your time to show you how it works. It’s vintage but it does magic”

“A Tactical Checklist is developed with the following steps:

1. Draw up a set of questions (you could go up to 30 – 40, depending upon deal complexity) such that each “yes” response implies a higher prospect of your winning the order.
   For example, questions in the tactical checklist could include:
   • Is the Customer requirement within our range of products / activity?
   • Does the Customer have necessary funding to close the deal?
   • Are we approved?
   • Do we have a champion within the Customer’s organisation?
   • Does the Customer know our company’s strengths/capabilities?
   • Do we have a better hold than our Competitor?
   • Is the customer amenable to our standard terms?
   • Do we have a unique product/service advantage?
2. Group the above questions and assign weights basis likely impact on deal outcome: By this logic, group the questions into the following 3 categories and assign scores/weights as under based on Criticality for deal Success. (a) If the question is Essential for deal success the suggested score/weight can be 3. (b) If it’s just desirable for success you can give it a weight of 2. (c) Questions that are merely Useful can be assigned a weight of 1. Juggle the questions such that if all questions are answered yes, the total score arrived at is 90%.
3. Evaluate the status of each enquiry. Questions which elicit “No” as a response should earn 0 score. You can refine scores of other questions by providing appropriate weightage for the three ‘degrees of certainty’ with which you can say yes. The composite score arrived now will provide a fairly reliable measure of probability on deal outcomes
4. “I agree Arvind. There’s something timeless about these frameworks and tools that have been working for a long time” agreed CEO Deepak “Hope our guys put this tool to good use”
5. Red carpets await sales professionals who 'predict' right. They are highly valued because they call the numbers right, regardless of market conditions. They know that when it comes to sales forecasting, ‘Many-enquiries-each-small’ is an easier scenario to handle. All you need to do is to factor ‘x’ percentage of closures based on past pipeline behaviour and rest of the plan falls in place automatically. Large value deals, as in the case of LEN Health Systems in our story, are more complex, carry bigger financial outlays, involve a bigger number of stakeholders and consequently, their outcomes are more difficult to predict.
6. To predict better, seasoned sales veterans like Arvind in the story try and get a good idea on the relative probability of success for each deal. For this purpose, the Tactical Checklist is a good tool to appreciate how likely it is that a deal will result in closure
7. Ultimately, being accurate with your sales projections is guaranteed to give you blue eyes. It makes you a favourite with your Sales Leadership and earns you the respect of other functions. The Tactical Checklist can help you get there.