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BizReport : Ecommerce : July 30, 2012

Why sales teams may be too optimistic

New data out from Nimble Apps indicates B2B sales teams may be too optimistic when it comes to the sales funnel. According to the data it takes 22% longer for teams to 'win' a sale than has been thought to date, and that length of time can be problematic to businesses when it comes to forecasting sales.

by Kristina Knight

With the US economy beginning to bounce back from the 2008 recession many sales staffs are looking expectantly at the coming quarters, hoping for bigger sales increases. But those hopes could be problematic for B2B companies, reports Nimble Apps. Their research shows sales predictions may be a bit too bright and that can spell trouble for the bottom line.

"B2B sales are complex. There is a buying process involved, lots of influences, shifting priorities," said Thomas Oriol, Nimble Apps CEO. "The [sales] outcome is intrinsically hard to predict. Sales reps and managers are human, therefore subject to many biases. Optimism, risk aversion, selective memory...especially since their compensation is tied to their ability to exceed quota."

To counteract the basic human-error of forecasting, Oriol suggests looking hard at past sales history, how sales have flowed through the pipeline in the past and from those metrics create a forecast that is more realistic.

"The analysis of our findings demonstrates that sales teams are consistently too optimistic about when an opportunity will close, and more generally, that accurate forecasting remains a big problem for B2B companies," said Oriol. "This is disastrous for sales managers trying to anticipate future revenue."

Oriol's top three tips?

First, run a consistent sales process that is well defined and with understood process stages.

Second, monitor closely the closing dates of sales.

Third, double-check sales staff hopes against historical sales data.

Tags: B2B sales, B2B sales funnel, ecommerce trends, Nimble Apps

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  • Zamboangadon

    Puhleez! and recent research also shows that if you spend too much money you risk making your profit goals.  This is a dog bites man story.



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