The Velos Group has conducted a SLM survey for the past five years.  Targeted primarily at small to medium-sized businesses, one primary question asked is, "How does your company compile sales forecast information?"

In the 2009 survey, 44.7% of the companies responded that they have no formal process to capture this critical information. Based on interviews with numerous companies, the way to capture this information is verbal, Excel and Email, but what is noteworthy beyond this is that most companies use a very subjective percentage probability that the business will close in a defined period of time. And precisely because it is subjective, there is no standard way for management to derive value from the information.

We are told frequently that a sales manager takes their monthly forecast and apply some "Kentucky Windage" percentage to it before they report it to Executive Management. The on-going impact of this approach is a very sub-optimal ability to order raw materials, plan for cash flow requirements and anticipate potential post-sales operational requirements.

Best Practice calls for a company to define a sales methodology, identify the major milestones of this methodology and then use them to define the sales stages in the company's CRM program (see below for an example.) The sales organization as well as the operations group are then trained on the definitions of each sales stage, and how best to interpret the reports more efficiently. Using this approach has proven that companies can then forecast their sales more accurately, operations can plan their production schedules more efficiently and finance can plan their cash requirements more effectively.

Dirty Data Can Be The Death

of a CRM Implementation

Everyone is familiar (and probably sick of) the saying, "Garbage In...Garbage Out." This, however, is one of the biggest sticking points for any successful CRM implementation. And, this problem is not reserved for just small companies with unsophisticated IT infrastructures.

What we have seen is that the larger the company, the more reinforced the "Silos of Information" become. Each major functional group has created its own database of information that has typically been customized to meet its own requirements, but have not been reconciled with the requirements of the company as a whole.

Smaller companies have smaller silos, but they exist nonetheless. Additionally, the smaller companies typically have maintained a large part of their customer and prospect databases in individual databases such as ACT or Microsoft Outlook.

It is typically an overwhelming project to reconcile, de-dupe and standardize the information from these disparate databases. The accounting database has set up customer data one way, including company naming conventions, yet typically only maintains financial contacts like the CFO and Accounts Payable Manager. Often the customer service department does not use accounting's database to maintain the naming convention of the company when creating their customer service system.

Additionally, sales and marketing people typically have not been requested to create company names in their databases based on the accounting naming convention. Sales and marketing are typically more interested in sales decision maker contacts such as the CEO and operational Department Managers. Further, often, the names of these companies are provided by third-party lists, web form contacts, magazine subscription lists and Trade Show contacts.  None of these sources allow for any level of naming convention control.