Sales Projections? Let Me Check My Crystal Ball.

Our focus this week has been on using Pipeline Asset Value Estimates (PAVE) to set goals for sales people.

Or focus today will be to help sales leadership teams in using PAVE to set your personal goals, and to improve the accuracy of sales projections that are an important part of any organization.

For two-thirds of my thirty-year sales career, I was leading a team of independent contractors.  I had no employer/employee relationship with them.  Therefore, I relied on a charismatic style of leadership that required me to constantly “sell them” on the opportunity in their hands as well as “why” they would be more effective if they followed the training we gave them.  At the same time, I felt like I was always balancing the needs of the corporate sales structure above me to gain certain information that was needed in planning and communication to the stock analysts.

If you find yourself in a similar situation, use PAVE to set your income goals and to provide sales projections.

1. Focus On Your Salespeople First: Make sure that your “Sales Tour Guides” (the closest training and management level to the sales person) are finding out the specific goals of each person on their sales team and reviewing their pipelines on a regular basis.  Have them teach and use the PAVE method to equip the sales person to set and achieve their income goals.  Coaching directly toward the pipeline will help The Sales Tour Guide find areas where skill set improvement is needed and activity levels are insufficient.
2. Track and Compare PAVE to Results: During the last month of any quarter ask your sales leadership team to compile a Pipeline Asset Value Estimate for their sales team.  Ask, “If everything in your pipeline that could close next quarter did so – what would the sales volume be?”  Then track and compare the results.  You will quickly see a trend for your team that will have minimal variance.  Then you can use that same ratio in projecting future sales.
3. Broadcast Your Estimate To Your Team: Once you know the PAVE to actual results ratio, broadcast that number to your team.  If your team has a 1/3 ratio – teach them to pack their pipelines to equal 3 times their goal.  Until you have actual results – give your team your best educated guess as to what ratio to use in their goal setting.
4. Use Your PAVE to Results Ratio in Projections: Knowing the PAVE for the next quarter will give you the data you need to estimate the new sales projections you company needs.  If you generate sales from existing clients, you can adapt the PAVE method for that category and add it to your projection.
5. Use Your PAVE to Results Ratio in Setting Income and Sales Goals: Instead of setting income goals based on sales targets alone, change the focus to the pipeline targets needed to hit your income and/or quota.

The PAVE method is most effective on quarterly goals and targets – but may be useful on long term targets as well, depending on your sales cycle.  They can also be  used effectively on time frames as short as weekly and monthly.  However, I caution you on weekly projections.  Focus on weekly projections for the purpose of execution of your plan and motivating your team is good.  Focus on weekly projections as an accountability tool is questionable.  Although the sales process is best when systemized – there are always “on the ground” variables that can affect any given week.  Too much focus on weekly accountability of projections versus results will kill the morale of your team and reduce their buy-in to you and what you want to accomplish.

QUESTION:

How would you use the PAVE method in other areas of sales leadership such as recruiting and developing new sales leaders?