703-927-4443
Written by Kevin Jones, Principal – Ignite Selling
The scene is an all-too-recognizable one. A sales manager somewhere is talking pipeline with one of her sales reps. It’s a conversation that takes place at least monthly and has the eerie familiarity of déjà vu. It might go something like this.
A sales rep says, “Yes, I believe we’ll close KNG by the end of the month for $250,000, as well as LG Fabrication for an additional $125,000.”
The manager replies, “C’mon. You’ve been predicting KNG will close for six months. I’ll believe it when I see it!”
You could almost substitute any customer, set the story in almost any industry with any sales rep and manager, and the story would still ring true. Shareholders want accurate forecasts. Management want accurate forecasts. And most sales people desire to comply with these interests. And yet, it seems that forecasts are often inaccurate, sometimes wildly so. And we meet sellers and managers who find the whole exercise distasteful. From every sector, in company after company, from seller to seller, we see this same thread being pulled. But the puzzle is really not that puzzling. There are some very simple reasons forecasts do not prove to be reliable as often as everyone wants.
“There’s a pony in there somewhere…”
Most sales people have a deep reservoir of optimism in their bodies. It’s the elemental fluid which sustains them in the face of constant rejection. It’s what helps them overcome obstacles. It’s what allows them to take the lemon they have just been handed, and create a lemon plantation. It’s what allows them to be hurled from the ledge of the tallest skyscraper and chant all the way down, “Looks good so far.”
It reminds me of the old joke about the dad who wants to teach his optimist son that life is not a bowl of cherries or bed of roses. So instead of presents under his Christmas tree, the boy finds a pile of horse manure. Imagine dad’s surprise when little Jimmy lets out an excited whoop and begins running around the house looking in closets and the back yard. “What are you doing, Jimmy?” Jimmy’s reply is in classic sales-speak: “With that much horse manure, there’s got to be a pony in here somewhere!”
Sometimes our sales pipelines look rosier than they should because we believe there’s a pony in there somewhere. Misguided optimism causes much of the sales mis-forecasting.
“Good morning, Pooh. If it is a good morning, which I doubt.”
Who does not love Eeyore? A.A. Milne’s beloved-but-gloomy donkey is hard to resist. We know he must be popular among sales people because many of them forecast as though they are channeling him. A sales Eeyore in a strategy meeting might sound like this:
“Don’t have much going on this quarter.”
“Smith Companies probably won’t close.”
“We are very reliant on one guy; I would not be surprised if he got re-assigned.”
“Abco is probably going to delay until next fiscal year, and I would not be shocked if they went with our competition. Not that it matters.”
In our consulting work in the area of forecasting, it’s not just the cock-eyed optimists who skew the forecasts. Some sellers live on the gloomier side of the street. When confronted with the optimists’ pile of horse manure, they would typically shrug and say it’s what they expected. Like Milne’s famous donkey, they see the glass as not just half empty, but as continually leaking.
Of course, the doom-and-gloom forecast may be inspired less by a gloomy temperament – or cynicism or even realism – than it is by self-preservation. The sand-bagger who downplays his forecast, after all, lowers expectations all around. As a rule, it is very difficult to disappoint people or leave them disillusioned if they expect very little. Instead of seeing gold in “them thar hills,” these Eeyores remind everyone how hard the gold is to extract or how thoroughly mined the hills already are. These gloomy voices would rather keep their forecasts quiet and conservative. No bold talking from them.
This reminds me of the old joke. A guy in church tells his minister he’s going to give up drinking. The minister turns and walks toward the pulpit, the man quickly asks, “Where are you going, Preacher?” To which the minister replies, “To tell the congregation.” The man, in a panic, shrieks, “Don’t do it, Preacher! Then, I’d have to quit for sure!” Putting our name to a forecast is like making a promise over an outcome we do not directly control. It’s uncomfortable. And too many things can turn the sure thing into the dead thing.
Step on a Crack…
Perhaps a third reason we see unreliable forecasts has to do with deep-seated and long-practiced selling rituals, also known as superstitions. Selling superstitions, while not as well known, function the way all superstitions do. Behave a certain way, or bad things will happen. Stage actors will never utter the name “Macbeth,” Shakespeare’s classic tragedy about regicide within the Scottish nobility. Believing the work to be cursed, they refer to it as “The Scottish Play.” Athletes are famous for rituals, from Michael Jordan’s wearing his old UNC shorts under his Chicago Bulls uniform, to Marshall Faulk’s wearing all black on the way to the stadium. And in baseball, players refuse to interact with a pitcher who is on his way to a no-hitter, for fear of jinxing him.
Many sales reps seem to have a similar view about deals that are coming to fruition in their pipeline. They do not want to kill their selling mojo by talking about it too much. So, they sand-bag it. You don’t want to curse the opportunity, do you? Talking about it too much may put the kibosh on it, like talking to a pitcher who’s throwing a no-hitter.
Of course, when this practice is examined a bit more closely, perhaps their reticence has some sound logic behind it. We have worked with many sellers whose greatest worry is that their manager will helicopter into a deal to “move it forward.” Late involvement may occasionally gin up the momentum on an opportunity, but more often, this practice is counter-productive. Customer’s do not always respond favorably to the heavy guns being rolled out, likening it to the car dealer who turns you over to the manager for closing the deal. Sellers who practice “pipeline reticence” are likely worried about the helicopter manager who flies in, raises a lot of dust and noise, and then flies out. Often there is an advantage to being “under the radar” when it comes to sales forecasts. The climate sales management sets will impact the directness and openness of the sales forecast. Defining the sales forecast process, and developing common definitions, can help to improve the accuracy of sales forecasts.