If there’s one thing 2020 has taught us, it’s that predicting the future is tough. But it’s expected in sales that you are delivering sales projections—and depending on your sales cycle, 90%+ accuracy isn’t an uncommon expectation.
If your dealership is struggling with accurate sales projections and you are looking for practical ways to improve your forecast, consider these three common mistakes.
1. Pipeline inflation
Many equipment dealers consider every website conversion as a new lead. These “leads” inflate your pipeline with bots, solicitors, and job seekers, making it a challenge to categorize actual leads across equipment sales, service, parts, and rentals. Other factors that can inflate your pipeline are how long an opportunity has been in your pipeline and how long it’s been since your sales team contacted that lead.
For this exercise, let’s assume that you need to forecast equipment purchases. That means you only want people with actions exhibiting sales intent, such as forms completed on your inventory pages, chats asking about your equipment options, or inbound calls that are routed to equipment sales reps. Make sure that your pipeline—and therefore forecasting—includes only these active sales leads.
2. Bad conversion data
Like your pipeline, conversions at every stage of a lead’s buying journey should be based only on true sales leads. Your sales forecasting becomes much more realistic if you update conversion metrics in a way that incorporates sales-qualified leads. For example: lead | qualified lead | appointment | quote | close.
Of course, conversion metrics vary based on seasonality and location, so consider that, as well as your inventory supply when you’re calculating each month’s forecast. After a year with these updated conversion metrics, start using them to develop historic conversion data. Reference that data to increase the accuracy of your sales forecasting moving forward.
3. CRM utilization
Your forecasting data is only as good as the entries in your CRM. If sales activity goes unlogged—or worse, leads are never logged in the first place—it’s a real problem. Foureyes reports that on average, 17% of inventory-based sales leads go unlogged in the CRM. If you have salespeople who don’t (or forget to) log sales activity and update their opportunities, your sales forecasting becomes immediately inaccurate.
Your team won’t be motivated to log their activity unless you hold them accountable to it. Salespeople shouldn’t be updating their CRM weekly or daily—it should be done in near real time.
Getting more accurate sales data
It’s obvious that the key to better projections is better and more accurate sales data. If the manual methods your team is currently using aren’t working or aren’t scaling well, let’s talk about how Foureyes may be able to help. Get in touch and you may even qualify for a free trial.