Many key customer meetings fail because the sales team didn’t deeply understand and effectively exploit the opportunity – they didn’t do all their homework.   The “opportunity” is not just what the team thinks it can sell.  It is more about knowing how to best position and present what they can sell — given the corporate strategies, executive personalities and competitive offerings.  And for that they need an information-fed customer strategy.

Cases in Point:

The good:

– A sales team planning to sell a large-scale enterprise IT solution to Sears Holdings changed its strategy after research found Sears was in no condition to make the purchase.  Sears had serious IT deficiencies and greatly lagged its top competitors technologically.  However, just post-merger with K-mart, the combined entity had serious leadership and decision-making issues, and the team now expected slow comprehension and execution of the solutions.  Based on these findings the sales team decided to pitch smaller, point solutions, and provide a vision for longer term solutions.

– A leading IT outsourcing firm selling ERP services to a large chemical firm tweaked its positioning after research found that the firm’s new CIO was “in way over her head”.  We learned that this CIO had no formal IT education, had just been hired away from a much smaller firm, and that her last ERP implementation was now failing miserably.   Her new CEO had publicly promoted his new ERP plan and his new CIO as its champion.  We suspected she was a bit overwhelmed.  Based on this intelligence, the IT firm subtly positioned its ERP outsourcing service as a way to the take the load of her back, and even more delicately – as a way to save her job.

The bad:

– At a customer briefing, the CIO of mid-size manufacturer began by asking the sales team if anyone was familiar with his firm’s business strategy.  After an awkward silence, he dejectedly looked down and explained their strategy.  Clear to me was that this deal was already lost – the sales team didn’t do its homework.

– Just recently, a state government CIO told me how frustrated she was with IT vendors lack of preparation — and respect, and she now insists that vendors understand their business strategy before they walk in her door.  “This is public information”, she tells them, “Find it”.

…and the ugly

– I witnessed a Fortune 100 firm senior executive, in support of a regional sales team, fly cross-country to attend a regional executive briefing — and swore never to return as he witnessed an unprepared, unfocused sales team stumble its way through the meeting.

From what I have seen, too much expectation is put on each sales person to analyze their strategic customer opportunities – and so this analysis rarely gets done to any acceptable level.  Customer meetings often take place with sales teams recognizing a lot more could have been known about the opportunity and decision makers.  No real connection is made with attendees.  Meetings meander.  Presentations are less customized, executive speakers less focused, and conversations less relationship-oriented.  Customers leave under-whelmed.  Sales teams leave potential relationships on the table.  Selling to strangers is a drag.

Sound familiar?

Despite the availability today of just about any customer information, few do the hard work of deep-dive customer analysis.  Everyone recognizes the need for customer research before a meeting.  Crucial information lies not just in SEC documents, Hoover’s and Crush reports, but also in blogs, Tweets, Facebook, LinkedIn, and every trade magazine and website on earth.  Add to this your firm’s hidden internal knowledge both from former sales teams and from your Market Research team.  Ignore the entirety of available strategy-setting customer intelligence and you are your competitors’ dog meat.  Ok, that was harsh, but you get the point.

What is Deep-Dive Customer Analysis?

Deep-dive is digging further into issues, reading between the lines, and constantly asking why.  Say you find a customer’s CEO quote in his quarterly earnings update that indicates a future 50% reduction in IT expenditures.  Digging deeper is trying to find out why.  What is driving this reduction?  Are they simply finishing off a large IT contract or are they fundamentally changing their IT approach?   How should you re-position your solution in light of these deeper findings?

The problem is this — Sales people simply don’t have the time, skill, or will to dig deep –and it is a tough assignment.  Research is not their specialty — and I would argue that today it takes a specialist.  Few world-class meetings result from second-rate research efforts.

Funny to me is how firms spend big bucks on McKinsey, Accenture, Gartner, IDC and even their own in-house research departments for overall market assessments, but when it comes to an actual, live strategic opportunity, they expect their sales people to Google and Hoover their way to the finish line.  Why does quality research support stop when it is most needed and when the ROI is so clear?

Serving a nice hot beef brisket lunch to a CIO who had recently blogged about his family’s devotion to Veganism?  Oops.  I bet the competition served nice hot Soba Noodles with Peanut Sauce.

Public information may be your gift, but it’s also your burden.

Here’s a solution — and what some top firms do: Embed a “Customer Strategist” into sales teams for strategic accounts.  Appoint a senior level analyst who understands the sales process, and who can gain the respect of, and influence “Type A” sales people and executives.   The Customer Strategist is responsible for deeply analyzing select customer opportunities, and for helping to construct intelligence-fed account and meeting strategies.  This person could also help coordinate customer briefings – ensuring sales strategies and presentations synch and reflect research findings.

The strategist’s role is to ask the sales team at each step of the sales cycle, “So what information do you need to close this deal?”  Then they use their skills to answer these questions, and proffer their own ideas and recommendations.  They filter, analyze and help integrate customer intelligence into the overall sales strategy.   They ensure the sales team conducts a focused, coordinated, visionary, and relationship-building customer meeting.

The illustration below depict the role of an embedded Customer Strategist:

Think about it – a more informed, focused, and relationship-directed sales strategy makes meetings more effective, efficient and fun.   Everyone wins.

For big-ticket, strategic opportunities, having a professional “Customer Strategist” perform deep-dive research duties for sales teams will accelerate opportunities and relationships.  Let the top sales people sell, and an embedded Customer Strategist support strategic opportunities – together they can deliver much more effective, focused, successful and fun customer meetings.

In future blogs, I will discuss more specifically how to dig deeply; what tools to use and how to spot business and individual drivers.   I will also discuss how firms point to price as their customers’ chief concern, but research often proves them wrong, as they were leaving millions on the table.

Ned Daubney is Principal Consultant at SalesTeam Strategies, http://www.salesteamstrategies.com/ with over twenty five years of sales and marketing management and research experience in both high-tech and financial services industries. Ned holds an MBA in Marketing from Babson’s F.W. Olin Graduate School of Management, and a BS in Accounting from the State University of New York at Plattsburgh.

The more popular forms of sales structures are:

1-Product sales orientation: here sales people are well versed in the products that the enterprise has to offer.  This can be a specific product or a suite of products or a series of solutions that the sales person is the “expert” in.  One major advantage to this structure is having product experts, but a major disadvantage is potentially high costs to support.

2-Market orientation: here the sales team is orientated towards certain industries. Examples could be government, financial or transportation segments where the sales person sells solutions that are appropriate for each segment. One major advantage to this structure is having industry/solutions experts, but a major disadvantage is potentially duplication of function per areas.

Further sub divisions within market orientation are structures such as major/ named or national account management (NAM) or global (GAM) account management, where large of important accounts have assigned people.

3-Geographic structure: here sales people are assigned and are responsible for all accounts in their territory and for knowing all products. One major advantage to this structure is having low costs, but a major disadvantage is limited or few real experts in the field.

4- Sales function orientation: here sales people perform certain sales functions such as order entry, selling, or managing sales events.  One major advantage to this structure is having an efficient sales operation, but a major disadvantage is duplication of costs to support.

Complicating the different options is when a re-seller is added to the mix.  For example, a firm may have a direct sales force to sell to everyone except Federal and State Governments.  For these customers they use a specialized reseller.

Regardless of structure one selects consider the following guidelines.

-What selling efforts will be needed to meet the organizational goals?

 -What skills and how many sales people are required to meet these goals

 -What structure (from above) is best suited to handle the type of products or solutions for the types of accounts and/or industries.

-How should the selling effort be allocated/deployed to meet these goals

-How will the sales force be managed and compensated

-What will the workload be per sales person to achieve the targeted goals?

Most importantly, know your customers and make sure they will receive the best in class services!

RHL 8/10/10

Before you answer the question, have you done and do you understand the following issues in determining your selling price?

1-      Are your current product price objectives in line with the corporate objectives (profit oriented, gain market share, etc)?

2-      Do you understand the values (quality, serviceability, ease of use, etc.) customers put on your product/service?

3-      How is your cost method derived (sell price minus margin to arrive at cost or is it a combination of fixed and variable cost)?

4-      Do you understand the competitor’s strategy (gain market share or market entry) and their cost structure (initially a loss leader or penetration)?

5-      Are there any legal issues regarding price reductions( some cases like market monopoly/oligopoly)

6-      Does this price reduction impact other products in your portfolio?

For more details on pricing, see our Pricing Guide.

Given the above, here are some considerations you should consider before you react.

A-     If you react with a price reduction will it be less then preventable sales losses?

B-      If you react will the competitor just reduce their price again

C-      Where will multiple reductions lead you ( margin issues or sales loss impact)

D-     If you react, how will it impact other products/service?

If you have good product/service differentiations, then I would suggest stressing your benefits and value proposition via marketing messages to your customers in some form of a campaign.  Also look at the competitor’s pricing strategy, cost structure and past record regarding price changes.

Third, look at the market with regards to new potential technologies, customer’s experiences with your competitor’s product and any past or present technical issues.  Use the results to combat the price changes.

In most cases responding to a price reduction by matching it results in disaster.

George Cressman Jr. & Thomas Nagle of the Strategic Pricing Group state “Pricing is like playing chess: players who fail to envision a few moves ahead will almost always be beaten by those who do.”

Cressman and Nagle recommend the following:

1-      Never participate in a competitive engagement you cannot win.  Fight from strength NOT your weaknesses.

2-      Compete from an advantage position ( example, value differentiation), do not compete by using the competitor’s rules

In summary,

** Know your overall pricing objectives and know your competitor’s objectives and position.

** Project the possible next steps (what if scenarios).

**Engage from a competitive advantage.

**Consider actions such as improved warranties or including some form of service.

** Use price reduction as a very last resort!

RHL 8/3/10

Before I answer the question, let’s look at what functions each perform and then draw a conclusion.

Assuming your enterprise has a direct sales force, it performs many functions such as; relationships, promoting your company, finding customers, closing orders, etc. An additional function that is performed by sales people is creating a personalized awareness with their customers.  Two major issues a sales team cannot do effectively is create wide-spread awareness and be the most cost effective.

Advertising can be used for different objectives. The primary objectives of advertising are creating awareness, branding, and providing information about your company and /or products.  It has been proven that advertising increases sales efficiency by providing awareness or helping turn a cold call into a warm sales call.  On the other side of the equation, advertising is not a substitute for personal selling or creating product preference.  These require a sales person to be “real time” and demonstrate or explain the value propositions to a potential customer.

So which is best?  The answer is not which channel is the best but that advertising and personal selling support each other and thus, picking the correct mix and integrating from a marketing communication strategy is really the key.  Of course the mix will contain more than just personal selling and advertising but other marketing tools as well.  The real challenge is developing a complete marketing plan that maximizes the  communication tools, supports the overall goals and falls within the marketing budget.

So the keys are: 

-Develop an overall marketing strategy and implementation plan

-Structure the mix to include your sales team

-Make sure things like messaging and value propositions are in sync between advertising and the sales force.

-Establish the budget that supports the overall game plan

RHL 7/27/10

A guest post by Craig James,  a leader in the use of social networks in generating sales.

By now, most of us have dabbled in one or more forms of social media, with varying degrees of gusto, and different degrees of success. In fact, many of us aren’t sure what “success” means; we’re still unsure of the merits of social media, or how to take full advantage of what’s available. Frankly, it can be overwhelming.

However, it can’t be denied that social media—Linkedin in particular—can help you generate more revenue. LinkedIn, unlike sites such as Facebook and MySpace, tends to attract people who want to develop business relationships, as opposed to friendships. But while many of us are familiar with the basic features of LinkedIn, we don’t always know how to best leverage them to drive sales. And because LinkedIn and its members rightfully frown upon solicitations for business (pitches), many have discounted its value as a useful sales tool. In fact, LinkedIn provides a multitude of ways for you to both develop and nurture relationships, which can lead directly to sales opportunities, and allows you to position yourself as a thought leader and a valuable resource who prospects will come to, without your having to “sell” them.

Get and give recommendations
What impression do you suppose a prospect will have after reading glowing endorsements about you from former coworkers, bosses, and, especially, clients? While they may suspect those clients likely did not volunteer to write those recommendations, they also know that clients would not agree to do so if they did not feel comfortable legitimately endorsing you. What’s the most tactful way to get a recommendation? Write one for someone else. Doing so accomplishes three things: one, it clearly flatters the person you write it for; two, it helps him or her look better to people viewing his or her profile; and three, it creates a desire to reciprocate.

Conduct Polls
People like giving their opinion about issues that are relevant or important to them. Every so often (once a quarter or so) use LinkedIn’s polling feature to take a poll. Your name appears (once again), reminding your connections you’re out there, and in so doing, keeping you top of mind. While having participated in a poll is not in and of itself likely to get someone in your network to buy what you’re selling, when combined with all your other LinkedIn activities, it will increase the likelihood you’ll be contacted when a need does arise for what you sell.

Read news
Each group has a news section that contains news articles other members post, and increasingly, blog entries. You never know what interesting tidbit you might come across that the difficult-to-reach prospect would appreciate receiving (and reward you for sending with a return call).

Contribute to discussions
Adding your experienced-based comments to existing discussions in the groups to which your clients and prospects belong is an unobtrusive, but powerful, way to demonstrate your thought leadership and your willingness and ability to provide value.

For example, I contributed to a discussion in one of the Mergers and Acquisitions groups. The very next day, I received an email from a boutique M&A firm on Long Island saying they “would like to learn more about [my] firm and services as they may be beneficial to [his] prospects and client base.”

Post documents, presentations, share what you’re reading
While you may not sell people on LinkedIn, your marketing material may. Use LinkedIn Applications such as SlideShare Presentations, Google Presentations, Box. net Files, and Reading List to passively communicate about your company and yourself. I’ve used this to post my standard sales presentation, which promotes what I offer, and a couple of books I’ve read and recommend. This helps others get to know me better as a person, effectively building my personal brand. Others use it to establish thought leadership by posting white papers their firms have authored.

In addition to these ideas, there are a few I’d like to share courtesy of a fellow business owner. David Leaver of Opus Partners recommends that his clients identify some trigger events—events that, when they occur, will create a need for a product one sells—among the weekly updates mentioned above. For Leaver, who provides sales training services, one trigger is when a VP of Sales changes jobs, since often times, he or she will want to bring in a sales consultant to evaluate the staff being inherited.

Better Targeting
Premium LinkedIn users have a host of additional benefits that are beyond the scope of this article. One that I’ve found extremely valuable is the ability to search for contacts using premium-only demographic criteria, such as company size, function, and seniority level. This provides me with a reduced, and more targeted, list of prospects, enabling me to zero in on the exact person or persons I want to reach, in the size of organization I want. I can then send a custom, targeted message to those prospects via InMail, or, if I don’t have a premium account, via a connection.

As we have seen, there are a plethora of easy-to-use tools available to you on LinkedIn that can help you improve your sales results. Start by picking one or two, and use them for about a week, until they become second nature. (Nigel Edelshain of Sales 2.0 disciplines himself to devote 15 to 30 minutes each and every day.) Then, gradually start using the rest of the features presented here, until you find yourself becoming a bona fide LinkedIn maestro.

Resources

• Three Ways to Link Your Company to LinkedIn
• Control Social Media Mayhem
• What I Learned About Link Backs

Author Information:

Craig James is the founder of Sales Solutions, a sales productivity improvement business located in suburban Boston. He can be reached toll-free at 877-862-8631, or by e-mail at craig@sales-solutions.biz.

Disintermediation initiated by consumers is often the result of high market transparency, in that buyers are aware of supply prices direct from the manufacturer. Buyers bypass the middlemen (wholesalers and retailers) in order to buy directly from the manufacturer and thereby pay less.

Source: http://en.wikipedia.org/wiki/Disintermediation

In his recent post, Dick suggests that the Internet will replace telemarketers.  Embracing the concept that power has shifted to the buyer, Dick points out how buyers today can use the Internet to gain information about a vendor’s products, pricing and reputation, cutting through the marketing puffery to narrow the vendor selection process to a handful that meets their needs.  Dick feels this will diminish the need for telemarketers, and result in the field sales force closing deals more rapidly with a knowledgeable buyer.

While I strongly agree with Dick’s premise, my conclusion is that the role of the telemarketer will expand, rather than contract and that the disintermediation that will occur will result in the loss of field sales jobs.

The chart below, from Parcus Associates, represents the steps in a buying/selling relationship.

Marketing’s role is clear in the “create awareness” and “identify needs” stages.  The question is, when it comes to closing the sale, is a field salesman needed?

Dividing the world into two groups, commodity and non-commodity; for a commodity sale, where the buyer has learned about the vendor’s products, pricing and reputation from the Internet, a telemarketer can close the deal.  Assuming that he/she has all the necessary information, some latitude in making decisions around the sale and a salesman’s ability to close, the telemarketer replaces the need for a field salesperson.  If a firm feels that their commodity-type product can only be sold through relationships, they will ultimately lose to the Internet/Telesales firm with the lower costs.

Dick will argue that specialty products with diverse applications, typical of many Business-to-Business sales will require a field sales force, either direct or through channels.  His rationale is that due to the long sales cycle, the technical nature of the sale and the relatively large dollar amounts involved, the buyer will only buy from someone they can see and trust.

Bunk!  In most of today’s high-tech sales, the salesperson opens the door and buys lunch.  The real selling is done by the pre-sales engineer talking to the technical people at the buyer.  The SE takes the buyers technical team through the features/advantages/benefits of the product, answering questions from the buyer’s team about their specific applications.  The salesman in these meetings usually nods, smiles and drinks another diet Coke.

When it comes time to “close” the multi-thousand dollar deal, the VP of Sales or some management representative appears on the scene, makes a last minute financial concession to the buyer, and closes the deal.  In this case the field salesman usually buys the dinner.

In the case of a high-value technical sale, the SE type information can be handled by highly trained technical telemarketers using WebEX or the equivalent.  Using a CRM system, the telemarketer can nurture the account, reaching out to them at the appropriate time and following them through the sales cycle.  When appropriate, the telemarketer can dispatch the management team to close the deal.

So instead of diminishing the role of the telemarketer, I see the Internet increasing their role, taking the place of an expensive field sales person whose participation in the sales process is being subsumed by a combination of Marketing, generating the awareness and leads, and in-place telemarketers and technical support personnel, who are in constant contact with the buyer.

What are your thoughts?  Do you see the death of relationship selling as I do?

5/19/2010

Telemarketing’s basic function is to provide “warm” leads to the sales force through the following process:

1- Marketing provides telemarketing with some form of an offer, along with a script, a promotional piece and usually a competitive analysis.

2- Telemarketing calls existing or potential customers by using either using its existing “customer list” or a list generated from an event such as tradeshows or seminars, to discuss the offer, along with why their product or service is the best.

3- If there seems to be interest by the customer, then telemarketing documents the required information and forwards the “warm” list to the sales organization.

4- Sales then strategize on a plan of attack and calls on the potential customers.

5- As part of their strategy, sales can provide a variety of activities such as product demos, testimonials, various presentations and eventually some form of a proposal.

In my previous posting, I talked about various Sales Models. Let’s look at the traditional Direct Sales Model process.

1- Marketing generates awareness, often by offers on the products/services for sale, through promotions around these offers and aimed at targeted markets.

2- As stated above, telemarketing or sales themselves develops “warm” leads.

3- Sales pursue the leads and develops a strategy for each account

4- On the customer side, when the customer has a need to be addressed, they generate inquiries to a number of potential vendors about their products along with some formal request via a RFI/RFP.

5-The customer “listens” to a selected subset of vendors.

6-The vendor does not control the situation but has a big influence on the client through activities such as providing information, competitive analysis, and their relationships.

Let’s now look at the Internet and its capabilities as related to telemarketing and sales functions and how it has changed them.

Fundamentally the consumer/buyer is now in controlm not the selling organization. Here is why.  First the potential buyer can do most of the research especially in areas such as product or service information, what other users are saying about the product/service, what the competition has to offer, and what market analysts are saying. These are usually provided by the telemarketing (functions 1, 2, and 5 from above) and some of the sales activity.

Second, the potential buyer eliminates many of the potential vendors from the final list without the vendors even knowing about it.

Third, the Internet or more specifically, social media is helping sort out all the marketing hype versus the reality of vendor’s offerings.

So is the Internet replacing telemarketing? Well the political answer is MAYBE. My Answer is a definite YES!

Given the criteria that I mentioned, if you look at the evolution of the sales model coupled with the Internet capabilities, it is obvious the telemarketing’s role is diminishing over time.   I say diminishing because there will be certain types of organizations or products and services that will benefit from telemarketing.

So, if you have a telemarketing function, are you looking at how it is being used now and how it will be used in the future and how it will interact and utilize the Internet capabilities?

RHL 5/14/10

The most common response I hear when I ask a sales person how he or she did for the quarter or the year; is something about their quota. i.e., “I made quota” or “I’m at 70% of quota, but with two big deals hanging fire.”  While quota should always be part of a performance evaluation, I would suggest a good appraisal should include other considerations.

In a previous posting we talked about Marketing Metric, Sales, needs Performance Metrics. Good performance criteria should have quantitative and qualitative measurements. The following are some of the major categories for both areas.

Quantitative measurements for a salesperson (note: appropriateness will depend on the salesperson’s role or title).

1-Sales quota for the year, for the region/territory, percentage as compared to others and other regions/territories.

Looking at just one person’s sales quota does really tell you anything about that person’s performance. You need to see how each person in doing relative his/her surround, the regional performance and others.

2-Accounts managed, number of account calls

You need to measure sales personnel on how they handle and manage accounts. You may have one person having a good quota but with just one account versus another person with equally good quota but with numerous accounts. Who is actually performing better?

3-Handling of expenses

It is great to have good people exceeding quotas but you want them to be profitable at the same time. Individuals should be goaled on managing and controlling expenses as related to their job (examples: marketing programs, travel, demos, and sales venues)

4-Geographic coverage, account “density”

Similar to criteria # 1, account coverage should be factored in to get a quota per account ratio. This will recognize individuals who not only strive for revenue, but also strive to develop accounts for future rewards.

5-Products and services sold per goals

A well balance of portfolio to revenues not only benefits a sales person but provides a nice competitive advantage in the overall market place

6-New accounts/ new opportunities

It always great to get re-occurring revenues, but a good salesperson always needs to develop the “next” group of customers. This is important for many reasons; two of them are increasing your base and opening up new markets.

Qualitative measurements for a salesperson

     1-Innovation- creative ways to “sell” to various accounts

Companies always need to differentiate themselves and what better resource then your sales person who is the front line with the customers. You can write great brochures, wonderful case studies, but the best promotion is a high energy sales person who exudes enthusiasm.

     2-Recuiting and training of others

People in sales are the most critical resource and usually ones of higher salary; therefore bringing on and training these individuals is a key component for sales success.

     3-Motivation and motivation of others

Sales people’s attitude is a reflection of the company they work for, thus if you want your image to be positive, can do, and confident looking then make sure part of sales appraisal has this factor.

     4-Role modeling/leadership for others

Related to recruiting and motivation, sales are a focal point from a customer’s point of view.  Thus performance should include how a sales person is viewed by the customer, follow sales people and sales management

     5- Managing accounts, tasks and personnel

Sales people have to be good business people also. How one manages and cares for accounts is equally important as acquiring accounts.

     6-Efficiency in tasks, meeting goals

Good sales people (actually all employees) need to be efficient because we all contribute to the success of the enterprise and therefore how we get things done has an impact on both customer satisfaction and economic factors.

In summary a salesperson’s performance appraisal should be multi- dimensional.  The two major sub- categories of qualitative and quantitative provide a good balance for each salesperson.   Second, by having a mix of criteria, you normalize sales people, territories and goals for apples- to- apples comparison. Third, you will have your sales force working towards all goals and objective and thus a win – win for all.

So once you have your sales strategy in place, one of the major tasks is to develop territory goals and eventually goals, measurements and performance criteria for each member of the sales team.

RHL 5/4/10

Shown – A Typical New England Weather Forecast

Over the past few months, the weather in Eastern Massachusetts has been remarkable; snow, (not too much) cold, record setting rain, record setting high temperatures, sun (a rarity in late March/April)…in other words typical New England weather.

Which seems to parallel the sales of many companies…slam-dunk sales haven’t occurred, “bluebirds” have landed, old products have continued beyond expectation, some new products are winners, some are losers.

In other words, for the CMO who follows trends and patterns, there is no trend or pattern.  Dick does a good job of discussing forecasting here, but regardless of the forecasting process used, tracking YTD results against plan, and then using that data to forecast the balance of the year is a high-stakes gamble – worse than trying to forecast New England weather.

Here are some suggestions for the CMO to help resolve this problem:

1. In all likelihood the end-user buyer or distribution channel follows the Pareto principle, i.e., 80% of the sales come from 20% of the group.  As CMO, talk to that 20% and find out what they are planning to do.   Don’t delegate this task, and focus on 3-5 points you want to cover.  A pattern/consensus is likely to emerge.  Trust it, and use the data from the 20% plus the other 80% to forecast the balance of the year.
2. Extrapolate Q1 results for the balance of the year, adjusting for the quarterly splits that have historically fit your company.  Then increase/decrease the total by 10% for 20% variance in total year results.  Compare these numbers with the number derived from checking with the top 20% – #1 above.
3. Assume the worst, and that sales will decrease 20-30% in the second half. (Ignore any quarterly splits.)  Add that number to what you did in Q1 and what you are going to do in Q2 (You should have a 90% confidence level on that number by now.)  See how this lower number differs from the low number in # 2.
4. If you have a good estimate on the total size of your market, the Y-T-Y growth and your share, estimate the total year results, calculate your share and then add/subtract 10%.  Compare these numbers with the ones generated in #2.

These quick “back-of-the-envelope” exercises are sufficient to use for adjusting your plans and programs.  Spending more time looking for additional or more detailed information will delay decisions and burn needed resources, and most likely won’t provide any better data.

The key is what to do if the numbers show that you are going to miss the plan by 10% or more?  Now is the time to implement or change plans to fill the pipeline, shooting for significant closings in Q3, especially September.  To be cost effective, you have to know what has worked for you thus far, and how those lead generation programs can be expanded and enhanced in the next 8 – 12 weeks.

If you don’t know what worked, or if nothing worked, make this one of the questions you ask of the key 20%.   If the data shows that podcasts, blogs and tweets work to generate leads, and you are planning breakfast meet-and-greats, Trade Shows and print advertising, now is the time to change your mix and move to Plan B.

On the other hand, if the numbers show that you are going to “knock the cover off the ball” keep doing what you are doing, and begin thinking how to capitalize on it in 2011.

If you assume that no purchase decisions are made in August, you have 10 weeks to generate leads and close sales in July, 14+ weeks to for September.  New Englanders often leave the house with an umbrella on a sunny day.  Do you have your plans in place, and can you implement them, in case the forecast suggests you have to change what you are doing?

Related Posts

2010 – The First Milestone   http://firealarmmarketing.com/2010/04/01/2010-the-first-milestone/

Guide for the CMO in Planning 2010  http://firealarmmarketing.com/2009/10/29/guide-for-the-cmo-in-planning-2010/

RHM – 4/15/2010