How Can I Forecast Potential Sales from my Pipeline?
Some people have a hard time understanding that there is a high level of predictability in sales at all levels. You may believe that it is the luck of the draw and that it is at the mercy of market conditions. Although those factors do come into play, the biggest variable is you. We may not always like to believe this of ourselves, but we are so incredibly predictable that Google has made an entire business out of knowing what you think and predicting what you will do. But you aren’t the only one that has a high level of predictability. Your target market, customers and competitors are just as predictable as you are.
So, how does one go about making sales predictions based on their pipeline? It would be great for us to know this because we want to be able to predict our incomes. It all really comes down to your closing ratio. More often than not when I ask salespeople what their closing ratio is, they either do not know what I am talking about, they do not know where to get that information, or they make up an inflated number to make themselves look like a rock star.
Being able to discover and understand your closing ratio is possibly one of the most powerful evaluative tools that you have, but, it requires you to track your efforts. It’s not that difficult to do either.
If you start with a list of 100 prospects, only a percentage of those will grant you a meeting. Let’s say 40 or 40%. Of that 40 only half will request a quote so that would be 50% or 20 quotes. Of that, you close 10 deals or 50%. That 10 represents a 10% closing ratio and in many industries that can be considered pretty decent. Now, not only will you find that formula will play out for you the same way with the next 100 prospects you select, but it also gives you a handle on what level of effort and opportunities you need to reach your goal.
Let's talk about it together. At Scorecard Sales, we've got the tools to automate many sales processes for you. Don’t let the idea of becoming methodical take the fun out of selling. If anything, it should that scary uncertainty away from prospecting. No’s are a lot easier to hear when you know that you can predict a yes right around the corner.