Education Sales Forecasting: How to Use Your CRM to Deliver Revenue During Tough Economic Times

All signals point to tough school-budget times ahead. You may be wondering: Is the tax base enough to stabilize our access to public funds? Will the new legislative body support our public schools? What does a devalued dollar mean to our purchasing power next year? Can we make do with what we have just to be safe?   

What do these economic concerns have in common? They make school administrators nervous, causing indecision or, worse, paralysis in school-market buying behavior. These conditions heighten the need for reliable forecasting and sales process management. Both are big challenges for any K-12 sales executive.

Now, Some Good News for Education Marketing and Sales

More than ever in today’s challenging business environment, managers of all education-market companies need optimal visibility to anticipate obstacles and spot opportunities. In public organizations, CEOs have to deliver stakeholder accountability and accurate advice to the “street” regarding financial performance. Here’s some good news. Use of the CRM (Customer Relationship Management) system has evolved as a strategic process, providing a more holistic view of customer behavior than ever before. The flexibility of these systems today means you can align the process to your channel model and customize the process to account for flexibility in forecasting.

How to Use Your CRM to Generate Critical Mass for K-12 Sales

Today’s tough economic environment demands not only a means to improve the accuracy of your forecasts, but also a method to create greater critical mass at the top of the sales funnel. Why the need for front-end loading? Because lack of budget visibility for school administrators means not as much can be counted on to make it through the process. Let’s look at a few areas of best practice.

Assess the Quality of Lead Sources from Your Education Marketing Initiatives

A supply of good leads is key to the success of your sales plan. So the question becomes, what makes for a good lead? Simply put, there has to be a direct correlation between the creation of a new business opportunity and the lead. To justify the marketing investment in good leads, we need to source-code our lead origins so that we can attribute leads as they mature into an opportunity. If your organization is not doing this, you may be missing a critical chance to assess the “cost per lead” and, more important, downstream the “cost per order.” These measures will support your investment in future programs designed to produce actionable quality leads and drive sales.

Establish Greater Accountability through Rigorous Qualification 

Successfully managing the forecast depends upon qualifying leads, establishing opportunity status, and an accurate assessment of closing variables. Having a common language helps maintain true accountability between inside and outside sales and sales management. While the expected close date and percent of confidence for opportunities are important entries for the sales rep, their accuracy stems from intimate knowledge of the opportunities in the pipeline. Greater accountability will exist when the sales team member who is ultimately accountable for delivery of their forecast is the one to place the actual dollar magnitude into the opportunity record and when the sales manager asks appropriate questions to validate these entries. 

Adjust Opportunities Based on School Market Conditions

For the opportunity-centric organization, the sales pipeline is comprised of all the sales opportunities flowing through the system from start to finish. For each opportunity there is an estimate of the sales value. If there are sales that could close incrementally, over time, then more than one independent (but linked) opportunity should be created. If the opportunity has a range of potential, the most conservative number should be used to support the forecast and an upside discussed with the sales manager.   

In the K-12 market, where we are often affected by economic and political impacts, a rich pipeline is the best defense against missing your sales quota. As stated earlier, better forecasting results from adjusting your execution plan to compensate for a lower conversion percentage on customer interactions. Considering the market conditions, I’ve seen organizations work to achieve a pipeline roughly five times their total sales target (quota) in order to meet their goal. Albeit challenging to achieve, this metric works when, in the event of deals falling apart, a rep can use incentives to drive another deal to close. 

Implement Stage Management to Spot Missing Opportunities

Many companies manage sales opportunities by monitoring several defined (numeric or descriptive) stages of the sales process. These stages are typically associated with completing tasks, which can be coached or mandated to advance the process. Program- or project-oriented companies sometimes augment this by giving all sales tasks a score and a certain percentage of weight up to 100%, that being the receipt of a purchase order. Evaluating the number of opportunities at different stages signals the team as to what is missing or pending based on the percent of completion assigned at a given time.  

Use Analytics to Improve Results for Volume-Based Accounts

Sometimes companies that rely on repeat orders from their customers fall into a syndrome of order-taking. The management philosophy “activity begets results” is often used to keep those orders coming. This approach assumes that the more we prevent lapses in activity the more volume of sales we will see and the more entrenched we will be with our customers. But CRM has evolved dramatically since order-based activity management. Today, analytics at the account level enable the ordinary sales rep to anticipate dissatisfaction, spot cross-selling opportunities, and grow loyalty. The same analytics, when used on a territory-wide basis, help managers make better decisions as to where it is most lucrative to spend time creating volume. 

Having Multilevel Data Visibility Is the Key to School-Market Forecasting

When CRM systems are built around a data warehouse, it is possible to see not just the current sales forecast data but also how it compares to historical data. Perhaps you’ll consider sales or inventory levels and consider variances in the data. For example, if last year’s actual forecast accuracy was 83% and this year’s forecast has suggested a similar total, but you see changes in the market, what does your gut tell you about the forecast compared to what is about to happen? This is a simple example of a best practice. Always triangulate forecast data. Forecasting is part art, part science.

Forecasting as a Coaching Tool

Good sales managers will work their forecast backward to enhance future pipeline-management discipline and to coach reps on the spot with deal-closing strategies. Here are three examples:

  1. Manager sees Stage Three (of a six-step process) and a related opportunity forecast. The manager questions the rep about where he/she is in the process, determines what is real about the forecast and what is hoped for, and encourages the rep to work the sales process in stages.
  2. Manager sees 30% confidence, a high-dollar magnitude, and a near-term estimated close date. Sensing risk, the sales manager asks the rep what can be done to create higher confidence percentage. Example: Perhaps a smaller deal could be undertaken and won now with the current budget and future arrangements made for a follow-on sale.
  3. An opportunity is forecast, but it does not close. In this instance, the manager works with the rep to assess what steps/questions did not happen during the process or which may have been misread. The manager works with the rep to improve sales process techniques that can be applied in the future.

The most important factor education marketers can build into their forecasting and sales process management is honest communication. Take care to inspire the development of substantive opportunities and to reward ultimate close rates. By rewarding accuracy, encouraging discussion of deal potential, and studying education-market sales obstacles, the sales team will become a consultative partner in helping the organization plot its sales success and achieve its revenue goals. It’s a classic example of planning the work and working the plan!

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