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Sales Forecasting. But, Accurate.

A quick best practices guide to getting forecasting right

In a recent survey* of ag retailers, more than half of the respondents said they believed their organization doesn’t accurately forecast. Half. Sales forecasting doesn’t have to be complicated, but to do it accurately, sales teams need a good process.

As a Sales Manager, one of your biggest assets and biggest painpoints is making sure your sales team has everything they need to meet company sales goals. And that means being able to conduct sales forecasts as accurately as possible. But how do you make sure that your forecasting process is the best it can be? We have a couple of ideas. 

1. Identify any current issues or mistakes

2. Understand the types of sales forecasting your business uses

3. Use proven forecasting techniques

4. Have regular forecasting meetings 

5. Update your sales forecast process

Identify Any Current Issues or Mistakes

Sales forecasting is an absolute must for an organization. The impact incorrect sales forecasts have on your business makes it critical to have accurate sales forecasts. Identifying mistakes early on is the key to avoiding inaccuracy. 

Since forecasting is a constantly moving target, most organizations typically under-forecast.

Under-forecasting is when an organization over-delivers, causing the organization to make decisions without enough time to think things through. Which can lead to forecast inaccuracies. 

This is why you need accurate sales forecasting. You have to be sure that you’re making decisions based on real, achievable numbers so you can create forecasts confidently.

Common culprits that cause inaccurate sales forecasts:

  1. Time-consuming Spreadsheets. If you’re still having every frontline rep fill out spreadsheets for forecasting, you risk wasting time and having outdated or even incorrect data. Deals evolve in real-time, and when you pull deal data into a spreadsheet, it becomes disconnected from what’s happening in the field.
  2. Human Error. Relying on spreadsheets can lead to small mistakes that can throw everything off. Multiple versions and mistyped product counts can throw off a forecast. 
  3. YoY Forecasting Using Commodity Prices. Because ag input markets rely so heavily on commodity prices, accurate forecasting can be challenging. 

Understand the Types of Sales Forecasting Your Business Uses

Ag organizations typically fall into three types of sales forecasting reporting depending on the maturity of their business, including:

  • Verbal Reports
  • Spreadsheets
  • Digital Notes 

Verbal Reports

Likely, your sales team relies heavily on verbal reports between a handful of employees. One example is one of your frontline guys calls your purchasing manager to let him know the amount of chem and fert his customer just committed to, instead of documenting it. This method runs the risk of the knowledge between the purchasing manager and the frontline seller not being communicated or transferred to the whole ag sales team. 

Spreadsheets

This is where most organizations get stuck. Teams use spreadsheets because they are the status quo. But, it’s incredibly prone to inaccuracies. Additionally, it limits how much data can be used for accurate sales forecasts because everything needs to be manually maintained and updated. 

Digital Notes

A Cloud-based software is an upgrade because it makes business data accessible across your entire sales team and puts these numbers into forecasting reports. But, a platform is only as good as the data within it, requiring every team member to update it regularly, which can be especially challenging during the peak planning season at the end of the year. If the data isn’t accurate when you pull your report, then your insights will be off. This then leads to last-minute pleas with your reps to input their sales activity data and deal information.

Stop Guessing. Start Forecasting. Yes, There’s a Difference.

Two typical sales forecasting techniques include qualitative and quantitative. Many companies will use qualitative sales forecasts in place of real numbers that don’t yet exist. A qualitative forecast is compiled of industry knowledge, market shifts, and the number of farmer customers expected during a specific time period who will pay a certain price. 

On the other hand, quantitative sales forecasts use existing data in your tech platform to create a potential forecast. However, there’s a catch. If your system is full of crap data, your quantitative forecast will be just as much of a guessing game as the qualitative forecasts.

In so many organizations, frontline reps put together a spreadsheet with their individual sales forecast. The sales managers then spend countless hours pouring over these forecasts checking for any inaccuracies before rolling them up into an executive-level report.

Spreadsheets don’t include real-time indicators showing what has changed (i.e., an increase/decrease in deal size), and they aren’t user-friendly to a sales team that is always on the go.

This process restricts the entire team’s visibility, including frontline guys, purchasing managers, and marketing teams. Without visibility, it’s impossible to align goals and collaborate towards business goals. 

Have Regular Forecasting Meetings 

Now that we’ve covered identifying current techniques and gaps in your forecasting process, we can discuss the best, most actionable ways to improve that process. Let’s start with your team. It isn’t enough for managers to know forecasting best practices; all team members should know. Conducting recurring training meetings to review current techniques and discuss changes in the process is vital. But what does a good forecasting meeting look like? We’ve got a few ideas.

  1. Get the whole team involved. Make sure that all stakeholders that contribute to your forecasting reports are in this meeting. Getting everyone together prevents miscommunication and misaligned expectations. Ask each participant to bring with them all current deal info, opportunities in the hopper, etc. As the person conducting the meeting, you should also prepare info such as Revenue closed for the month/quarter/year so far + the target for the month/quarter/year and insights on the deals closed since the previous forecasting meeting. According to Upsales, “as a sales manager, discussing previously closed deals and preparing summaries of each one helps keep the conversation laser-focused so that everyone is aware of the current situation. That way, everyone is held accountable.”
  2. Establish consistent timing. Regardless of how often you decide to have these meetings, make sure the dates are put on everyone’s calendars ahead of time. You should also send out reminder emails or texts before each session, one a week before and another the day before. That way, schedules can be adjusted, and there is optimal attendance. 
  3. Outline FAQs to cover. Before your set meeting time, shoot the team a note asking them to submit any questions they have ahead of time. An easy way to do this is by creating a Google Form for them to use. If your team doesn’t use Google, don’t worry, you can also use super simple platforms like SurveyMonkey. If you don’t want to use a survey platform, ask people to respond directly to your message with their questions which you can then transfer to a document. Once you’ve gathered these questions in a doc, answer them, and share the document to be referenced during the meeting.  
  4. Share out an agenda. In the same vein as the FAQ document, try and outline everything you’ll be discussing during the forecasting training and send it ahead of time. Not only will it help you plan a more actionable meeting, but it will also keep the meeting on track and allow for participants to prepare ahead of time. Your agenda should include the date/time, a list of the recently closed deals you’ll be discussing, a reminder about the info you need participants to prepare, and a link to the FAQ document you prepared. 
  5. Offer help. During the meeting, ask your reps what they need to help them close deals faster. Asking this helps uncover any roadblocks and identify misalignment in the selling process. 

Update Your Sales Forecast Process

Reality check time. Understand what history tells you, what your team tells you, and what you’re being asked to deliver. Usually, this happens in reverse. You look at your quota, then you ask your sales reps what they’re willing to commit to, and then, based on previous quarters and what you know about product performance, you might do some historical analysis in your head. But, why spend so much time tracking this information down when you can access it all in one place? 

Using a single planning and engagement software means that your records are updated instantly. You avoid the danger of cut-and-paste errors in those never-ending spreadsheets. The added benefit is that since everyone on your sales team can access the same information, you don’t have to spend time wondering if there’s a newer version of your spreadsheets stored in someone else’s computer (or truck cab). That means you could access product inventories, quotes, and past grower purchases at any time. 

GROWERS.RALLY™ in the Wild

So often, sales teams struggle with producing accurate forecasting. RALLY replaces spreadsheets (and binders, and sticky notes) by combining essential sales enablement features into a single product… which all sounds great, but what does it mean for real-world, everyday use? More than you think. 

RALLY makes it possible for sales managers to take team and sales data, put it in one place, and make informed decisions, significantly decreasing the chances of errors. Have access to the number of quotes that your team has created, how many acres are in the pipeline, etc. Once you have that info at your fingertips, a forecast can be better informed.

Forecasting is a strategic issue. Ag retailers that recognize this can provide a higher service level to their customers and post higher profits.

*The State of Ag Retail survey

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