Forecast Qualification Routine
Spent an enjoyable afternoon in the company of an old pal of mine watching the Rugby. He’s scaled dizzying heights bean counting for one of the world’s largest retail luxury brands. He got to telling me about a future cash flow pinch he’s luckily uncovered. The forecast for stock was €10m. Over the past 9 months, the actual figure per month was €20m. How on earth can such a fundamental figure be out by such a huge factor? He asked around. The person responsible for final calculations said they’d simply taken the previous year’s stock figure, and added a sensitivity of 20%. Not unreasonable, yet still way out.
So what insight does that give us sellers? Well, the first thing to note is that even billion-dollar firms can’t forecast for toffee 🙂
Secondly, how often do we truly use our forecasts as a qualification tool in front of prospects? Early in my sales career I was encouraged to use the approach of ‘listen, mate, I’ve got you on my forecast, is that a good idea?’ But I never really felt comfortable with this, as why should the prospect care about something so me-centric?
Yet refining this with the message of my mucker’s experience introduces a cracking angle. Forecasting (I’m sure your prospect will concur) after all, is a vital business function. Imagine the consequences in your firm if a key budget number was out by double…. Add to the melting pot the fact that prospects love talking about things that would take place post-sale and you get the obvious conclusion you can talk professionally about your forecast with them.
What key resource needs to be marshalled after the ink’s dry for you? How can you introduce the fact that there clearly, understandably is a scarcity of such resource. So like all proper business planners, we need to know in advance what’s being shepherded where. (Another obvious avenue concerns lead-time constraints of pretty much anything).
Chat like this will help uncover both the seriousness and urgency of your prospect. I regularly used a similar approach in my software days, albeit in more of an ‘everything must go’ style. As I successfully used to flush out antipathy or encourage enthusiasm by stating we only had a finite number of implementation engineers and as some could be booked up for weeks in advance, isn’t it best to book your delivery slot sooner rather than later, mister prospect?
Such a tactic can take you half-way there. Adding in business savvy of forecast requirements so all paying clients get platinum treatment can complete the journey.