Stage-based sales forecasting has some obvious advantages. It seems easy and intuitive to establish the probability of winning a sale when your forecasts mirror your sales process. The details depend on your business, but suppose you have a 10-step sales process and you’ve mapped a 10% chance of winning to each step. “Customer sees product demo” is step number 7, and when the demo is complete, you report that the probability of your company winning the sale is now at 70%. This 70% probability of winning the sale is then factored into your weighted sales forecasts.

But stage-based sales forecasting can be misleading and even reduce your sales effectiveness. Stage-based forecasting is inherently salesperson-focused, rather than customer-focused. Getting to step #7 in your sales process does not necessarily mean that you have a 70% chance of winning. Thinking from the perspective of stage-based sales forecasting may be distracting you from important elements of the sales environment, such as the position of each key decision-maker and what your competition is up to.

When one is working daily with a stage-based forecasting methodology, it’s natural for a salesperson to end up thinking along the lines of “How can I get the customer to see our product?”, rather than “How can I understand what the customer is trying to achieve, and then position our company to reach that goal for them?”

From the customer’s perspective, especially in the complex B2B sales world, they are not just shopping for something new. The customer is trying to solve a problem. Rushing into a product demo for the sake of achieving step 7 in your sales process does little to ensure that your solution is in line with the customer’s needs. In fact, it can be detrimental to the deal; the opposite of improving your odds by 10%.

You don’t necessarily increase your chances of winning a sale simply by getting to the next step in your sales process. It’s the other way around—the ideal next step in your sales process should be to do what it takes to increase your chances of winning. The distinction is both ideological and practical.

Sure, you have a process that has been fine-tuned for your industry; it has been tested and proven. But the sales process and the probability of winning a sale do not always march in lock-step. In reality, the sales cycle follows the buying cycle, and must adapt to the unique sales environment of each opportunity.

The best measure of the probability of winning a sale comes from establishing the customer’s needs and truly understanding their goals, timeline, budget, limitations, buying process and the obstacles that stand in the way of being able to make a purchasing decision. There is also the matter of where your competition stands in any deal. If your sales forecasts are going to be accurate and reliable, these factors must be taken into account by your sales forecasting method.

What gets measured gets done, as they say. Is your company measuring sales process or the real probability of winning sales?

Our next public workshop for OPM Sales Training is scheduled for Tuesday April 27, 2010 in Toronto.

The OPM public workshop is a 1-day course based on SalesWays’ patented sales methodology, Opportunity Portfolio Management (OPM). Also taught at the University of Connecticut School of Business, OPM sales methodology focuses on the sales cycle and sales strategy. It will help you:

• increase the number of sales opportunities that you have
• create more time to work on each opportunity
• increase your effectiveness in selling against the competition
• produce more accurate sales forecasts
• become more aware of what needs to be done now to ensure success in the future
• use your time more effectively
• avoid wasting effort on low value opportunities; concentrate on the ones you can win
• and more…

Even the practiced sales veteran will benefit from the new perspective that OPM offers. Give yourself the tools and awareness to excel in sales!

Learn more or Register

Upcoming OPM public workshop Feb 11

Sales Training:

You’ve probably been to many sales training workshops and sales seminars that present methods for winning sales. Sales tactics, different ways to approach a potential customer, and the kinds of questions you should ask are all important aspects of your personal development as a sales professional. You can never sharpen your skills too much when it comes to keeping your edge as a salesperson. It’s all about winning more sales!

Winning more sales overall:

It’s important to have the skills and experience to be able to win an individual sale, but have you considered your whole portfolio of sales opportunities? After all, the bottom line is the sum of all deals, so how can you grow your bottom line without getting too distracted by any one deal? Using a good CRM tool is essential, but that won’t necessarily help you decide how to manage your time most effectively.

How do you know which of your opportunities deserves your attention today?

Which of your many potential deals do you focus on first? The one that is easiest to close? The one that represents the most revenue? The one that you are most comfortable in selling?

Should you work primarily on new leads or business for existing customers? Should you spend your time fighting against your biggest competitors, or go after the low hanging fruit? How do you maximize your overall performance as a salesperson?

This is where OPM (Opportunity Portfolio Management) comes in: to help you build a framework for understanding your overall sales opportunity portfolio and prioritize your efforts to get the most out of it. It’s all about winning more sales overall!

There are still a few spots remaining for our next OPM Public Workshop next week, Thursday February 11, 2010, in Toronto.

Click here to learn more about OPM Sales Training

Click here to register for OPM Sales Methodology Public Workshop