November 10, 2009

Beware of Spreadsheet Forecasts!

10 Reasons Not To Rely on Spreadsheets for Sales Forecasting

1. Forecast accuracy inevitably suffers using a spreadsheet because you have only limited visibility, predictability and control in respect of sales (opportunities, accounts, activity, etc.).

2. It is impossible to keep a spreadsheet based sales forecast or sales campaigns up-to-date. This is compounded with different versions being used across a sales or management team. A spreadsheet only gives a snapshot at a point in time and is quickly gone out of date.

3. Managers who track sales using spreadsheets spend twice as much time in report preparation.

4. Sales Meetings involving the use of spreadsheets are grossly inefficient – with updates being made line by line to different accounts, or opportunities for each rep in turn. That is time that could be spent coaching.

5. Spreadsheet-based analyses are more subjective because they struggle to adequately communicate how, for example, an opportunity is rated. They don’t map opportunities to your sales process – e.g. has the buying group been identified/covered, has a formal needs analysis been undertaken, has budget status been clarified, etc.
6. Spreadsheets don’t trigger actions in a diary where an action is allocated to an account, or an opportunity and they don’t provide a record of the associated actions, emails, meetings and so on.

7. Managers should have dashboards at hand so that they can review at a glance their pipeline, identify priority accounts, and so on.

8. Spreadsheets are of little use if a sales manager or a sales rep leaves. With growing levels of rep turnover, it is vital that all account, contact and opportunity is held in a central repository so that it does not vanish when a rep leaves.

9. A spreadsheet will struggle to give a sales manager the metrics he/she needs, including the ratio of leads to meetings, or the win rate of proposals.

10. A spreadsheet won’t adequately tell a sales manager where his rep was last week, or where he should be next week. It won’t enable him to identify areas where the rep needs coaching either.

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