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Jorge Zuñiga Blanco discusses how to predict the effectiveness of sales activity

Jorge Zuñiga Blanco / Blog /

The sales prediction sets the expected sales figure for a salesperson, a sales team or the company as a whole. Sales prediction can be made weekly, monthly, quarterly or annually, and a company’s management uses sales prediction to set goals and make plans. The company’s plans that include sales prediction are distributed among the departments and even among the company’s shareholders, making it extremely important to be accurate when predicting sales. Jorge Zuñiga Blanco, an entrepreneur and sales master from Costa Rica, explains how to effectively predict sales to achieve greater success.

Predicting sales allows you to spot potential problems when you’re still in time to avoid catastrophe. For example, if you notice that your sales team is going to fall short of the target. From planned sales, you can see what is going on and take corrective action. Competition may have lowered prices or sales incentives may not be well designed. Discovering any issues in sales figures now rather than at the end of the quarter can have a huge impact on the company’s results.

To predict sales, individuals need to set individual goals and for the sales team. To know if you have achieved success, it is necessary to first define what that success consists of. Asserts Zuñiga, “A structured sales process is a requirement. All sellers should use the same steps in the sales process or it isn’t possible to predict the probability that an opportunity will end in a sale.”

Standard definitions of what a prospective customer is, a sales opportunity, the closing of a sale or a negative customer are also necessary. All sellers must agree on when to include a prospective customer in the system. They also have to identify at what stage of the sales process each sales opportunity is located.

All sales departments need a database. These let the representatives report what stage of the sales process each opportunity is at and what follows. That offers a prediction of sales. In addition, when a seller fails in their prediction about a sales opportunity, you have to follow up to see why it has happened. This prevents sellers from exaggerating their predictions. And it makes them more realistic in their expectations.

To make a prediction of sales it is necessary to understand that these depend directly on two vital factors – internal factors and external factors. Internal factors include things like hirings and layoffs. “When a salesperson leaves the company,” explains Zuñiga, “income decreases. Unless you have a replacement for that seller immediately. On the contrary, if a new salesperson is added, global sales should grow.”

Changes in company policy are another example of internal factors that affect sales. Any changes that occur in the company may affect sales, especially changes in pricing policy or changes in the structure of sellers’ commissions. If you change sellers’ commissions, sellers may adapt the way they sell to target. To those customers who are more profitable to them, which may coincide with those who are more profitable to the company.

External factors include things such as changes in competition. What the competition does has an impact on sales. If competition initiates a very aggressive pricing policy, the company may have to lower prices to compete in the market, which affects the turnover figure. On the contrary, if competition goes bankrupt, there will probably be an increase in sales. Economic situations have to be considered, as well. When the economy grows, it is more likely that there will be more customers. When the economy goes into crisis, it is very likely that sales will suffer since people think about it more before buying.

Changes in the market are also external factors. “If your potential customers go through a bad time, it is unlikely that they will decide to invest or make purchases. That is why to predict sales, it is necessary to be aware of what is happening in the market,” states Zuñiga.

Changes in the sector or product changes fall in this category, as well. If there are technological advances in the sector, current sales of your products may suffer a decline. On the contrary, if there is a change in consumption habits, your product may be positively affected. As the product evolves and undergoes changes or modifications, sales may also improve. On the contrary, if the product becomes obsolete, sales will fall.