They don’t really show you how.
When it comes to sales forecasting, experts give us half-truths. “You can use sales forecasts to increase your revenue; it will help shorten your sales cycles.” It’s true, but they don’t offer the micro-level specifics we need.
This creates a lot of missed opportunities.
Today we’re going to look at a simple framework you can use with your sales forecasts to create upselling, down-selling, and cross-selling opportunities.
How sales forecasting increases sales and boosts company growth
Here’s a quick recap of the benefits of sales forecasting.
- Project sales revenue over a specific period of time
- Identify whether your team is on track to meet quotas/goals
- Discover challenges, bottlenecks, and stall points for your sales team
- Identify areas where your sales team needs additional training
- Identify important customer buying trends (e.g., booms, busts, and slumps)
- Discover seasonality, habits, trends, and triggering events
- Spot areas where you can improve your sales process and shorten your sales cycles
We’ll focus on #5, identifying important customer buying trends (e.g., booms, busts, and slumps). This is especially important because we’re going to focus on the evergreen booms that are always available to sales teams.
These booms are essential.
Your sales forecast gives you the predicted number of customers your company will have over a given period of time. The easiest way to forecast customer counts is via your conversion rate; multiply your marketing qualified leads by your average close rate.
1,000 MQLs * 15% conversion rate = 150 New Customers
What if you were able to 2x or 3x the revenue you gained from these same 150 new customers? That’s what we’ll cover today. I’ll provide you with a predictable and repeatable process your sales team can use to generate more sales revenue from the same number of customers.
But before we can do that, we’ll need to understand the hidden motivator behind increased average order values and repeat purchases.
Where sales forecasting falls short
Conscientious salespeople use their customer’s problems, motivating them to take action. They give their customers solutions to their problems. This is very, very good.
And then they stop.
Once they’ve run out of problems, they’re stuck. This leads to two common challenges.
- These sales teams run out of products or services to sell. Their relationship with customers declines because they run out of things to talk about.
- They’re desperate, so they begin to offer customers irrelevant offers, which only irritates and repels their customers. Their offers fall flat as repeat sales, and average order values stagnate.
- In a last-ditch effort to increase sales revenue, they hit their customers with everything. All at once. They drive customers into analysis paralysis.
At this point, customers dread hearing from your sales reps.
This destroys future sales.
If your customers run when they hear from your sales team, you’ll be forced to chase after new customers consistently. This decreases average order values and repeat sales.
How to increase upselling, down-selling, and cross-selling opportunities
There’s a simple way to increase upselling, down-selling, and cross-selling opportunities.
You create problems for your customers.
This sounds toxic.
Am I suggesting that you create artificial problems for your customers? Absolutely not; going out of your way to create headaches for your customers is unethical and immoral. It’s also a great way to permanently lose your customers when they find out.
So what am I saying?
If your sales team is doing a great job for your customers, you’ll automatically create new problems for your customers. Issues they’ll be highly motivated to solve.
Here’s what I mean.
Every product, service, offer, or opportunity creates more problems.
Let’s say you’re looking for a reliable and fuel-efficient vehicle. You’re looking for a reliable and fuel-efficient vehicle. You decide to purchase a Honda CRV. Congratulations, you have a laundry list of problems.
- You’ll need to register with the DMV
- You’ll need a shop when it’s time to take your vehicle in for routine maintenance and repairs
- Full coverage insurance
- Roadside assistance
- Warranty support and service
- Accessories (e.g., windshield cover, floor mats, first-aid kits, portable jump starter)
On and on and on.
But it doesn’t stop there. Each of those solutions creates more problems you’ll need to solve. For example, once you’ve registered with the DMV, you’ll need to take care of your renewals vehicle emissions tests.
Here’s how you use this to boost sales revenue.
If you’re using CRM software, sales forecasting should be a core feature in your app. As I mentioned in a previous post, you can use sales forecasting data to identify your ideal customers and shorten your sales cycles.
If you’ve done your homework, you should know:
- Who your customers are (broken down by segments)
- What their biggest problems are
- Their desires, goals, fears, and frustrations
- Their most common sales objections
- Obvious and hidden risks that keep them from buying
- How to find/acquire relevant reviews, testimonials, and case studies
Have all of that data? Good.
Your forecasting data will give you the KPIs you need to identify these ideal customer segments before they buy. What you’ll need to do is look at historical sales data and make a list of the following:
- What is the biggest customer problem (by segment)?
- What is the second biggest customer problem (by segment)?
- Why are these issues “problems?”
- What are the consequences of ignoring these problems?
- How long can customers safely ignore these problems?
- What is your company’s solution (content, product, service, etc.) to each problem?
Have you finished your list?
Now take your list of solutions and identify the problems they create; this is oriented around your product or service. You can do this three or four levels deep.
What does this look like?
Let’s take a look at our new, fuel-efficient vehicle purchase example:
Problem: Customer needs transportation.
Solution: A new fuel-efficient Honda CR-V
Problem: Customer needs to protect their CR-V
Solution: Anti-theft, tire replacement, and roadside assistance package
Problem: Customer needs peace of mind in the event of an accident
Solution: HondaLink Assist SOS Button (and subscription services)
Problem: Customer needs to maintain their new CR-V
Solution: Hassle-free maintenance plans that cover oil changes, tune-ups, tires, and more
See what I mean?
Every solution creates a new problem. If your sales team has clear direction, they’ll have the assistance and support they need to identify the upselling, cross-selling, and down-selling opportunities that are already there.
And it all starts with sales forecasting.
The better you are at forecasting sales, the easier it will be to gain an in-depth understanding of your customer and the sales opportunities that are an inherent part of the buyer’s journey.
Sales forecasting increases sales revenue and customer growth
When it’s done well, sales forecasting creates huge upsell, down-sell, and cross-sell opportunities. While there are significant benefits that come from sales forecasting, we focused our attention on the booms that come.
As we’ve seen, these booms are essential.
Using a sales forecast gives you the predicted number of customers your company will have over a given period of time. Identifying the booms gives you the intel you need to avoid busts. It’s a straightforward way to improve your sales team’s performance in relation to your organization’s goals.