Sales forecasting can make your company more efficient and help sales teams target their efforts more effectively, but too many organizations suffer because their teams put out inaccurate forecasting. A recent study conducted by Aberdeen, a research firm, confirmed accurate sales forecasting noticeably improves sales team performance, which should demonstrate the need for effective data collection. Companies can incentivize employees to create accurate sales forecasts by including benefits for sales forecast accuracy in compensation plans. This can create a culture that prizes accurate forecasting and boost an organization’s overall sales. Against common strategies Traditional compensation plans are entirely based on sales volume, but that may not be the most effective way to operate a business. Harvard Business Review notes accurate sales forecasting makes it possible for a business to set realistic goals and allows individual sales people to succeed against their quota. It can also help an organization identify specific territories or products that may need more or less sales attention. That makes it easier for a business to target the places and products that can yield the best long-term growth.
“Accurate forecasts help a sales team focus.”
Ideally, a business wants to incentive employees to perfectly hit their sales projection rather than exceeding it or under delivering. By adjusting individual employee compensation plans according to forecast accuracy, your company can encourage employees to be realistic about their capabilities, which allows business owners to make smarter managerial choices throughout the year. A successful strategy Aberdeen’s research provides definitive proof that incentivizing accurate predictions pays off, and noted the practice is more common among firms that lead the industry in performance. The companies that use incentives to encourage accurate forecasting have greater success with rep development and have a greater ability to direct necessary resources at the deals most likely to close. Incorporating these incentives into a sales team is simplified with compensation management software that can automatically track employee performance against forecast goals and apply the calculations to incentivize that performance. The companies that apply analytics to their sales coaching and training process have a much higher chance of achieving quota annually, according to Aberdeen. Accurate forecasting positively affects many parts of the sales chain and can help a business be more successful overall. Advanced compensation management allows managers to create smart incentive plans and tweak those plans to maximize the benefits.
