Forecasting: business management tool, or colossal time waster?

As I consult with companies on forecasting and improving forecasting I am amazed by the complex formulas and difficulty that many organizations add into their forecasting methods. This led me to create a webinar series titled “4 ½ Keys to Improving Forecasting.”

While this post will not completely restate what an hour-long webinar will, I am compelled to write it for those that want a quick glimpse into the world of forecasting. There are several types of forecasting (revenue forecasting, sales revenue forecasting, product forecasting, demand forecasting, etc.) and several methods of forecasting (annual client analysis, quota/sales target, quote extrapolation, opportunity pipeline, and historic); however, this article mainly deals with revenue and sales revenue forecasting. has a great article on the types of forecasting and the key to accurate sales forecasting.

Let me start by stating my three basic principles on forecasting:

Principle #1: Don’t let perfect get in the way of better.

      Since forecasting is not an exact science, there is not way to have a perfect forecast. The best you can hope for is a better forecast. The key is to constantly improve on your forecast. A great way to do this is to review your forecast data on a regular basis (I recommend monthly) and review areas where your forecast diverges from actual sales data.

Keep in mind, improving forecasting does not happen overnight. A good forecasting methodology takes months of tweaking to stabilize, and will require a lifetime of tweaking as factors like industry trends, product mix, government regulation, and economy change.

Principle #2: Keep it simple.

        While no one forecasting methodology will work for all businesses, I recommend combining data from at least two sources. Since most companies have access to their historic sales, this should be one of the sources, but keep in mind historic sales do not take into account new products and services and how they will affect future sales. The other source I recommend is the sales opportunity pipeline. An enterprise CRM system like 





       can be a big help in this area.

        However, whatever you choose, keep it simple! The forecasting process doesn’t have to be a hyper-complicated process that involves complex mathematical equations and hours of man-hours each month. Keep in mind that most business are not that sophisticated and don’t usually have statisticians on staff.

        Any professional sales person knows that their time is their most valuable asset and you don’t want to implement a process that requires hours a day to keep up-to-date. Your process to manage opportunities and forecasts should be simple and reproducible. You should expect to see similar results from all sales people and you should be able to repeat it over and over again.
        If the process is not unbelievably simple for the major contributors to the data, your forecast numbers will be suspect at best.

        Principle #3: Numbers Lie

            Just because you have a system for tracking opportunities, whether a spreadsheet or a contact management system of some sort, and just because each opportunity has a sales potential number with a probability does not mean that you have a forecast.

        Without common definitions and without constant end-user education your forecast results will vary greatly from salesperson to salesperson. Everyone doing their own thing with different beliefs of what an opportunity is and what makes an opportunity have a 75% chance of closing will drive any forecaster insane! Without education, consistency of action and understanding of definitions across the organization you will end up with is a bunch of numbers, not a forecast.

        Even after you have perfected the process your numbers will be inexact. The trick is knowing where they are wrong and using the forecast to draw a picture of how your business is performing.

        The biggest take-away I hope you would get from this post is that forecasting is not like a Ronco oven. You cannot set it and forget it. Maybe I should have made this the first principle, because it is that important: forecasting is NOT as set it and forget it strategy for businesses! Forecasting is the driving factor providing you with information to make intelligent business decisions. Without it businesses have difficulties in managing inventory, cash flow and planning for growth.

        The good news is that this is an area in which CRM software implementation, along with a solid customer-centric business strategy can be of great use.

        Luke Russell 

        Resolv, Inc.

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        Back to the Basics

        Due to the recent popularity of our new CRM webinar “What is CRM? And 10 Reasons why CEO’s should be demanding it.” I have come to the understanding that many are struggling with a definition of CRM.  Today’s blog post will hopefully help with that.

        First, let me point out the obvious, CRM is an acronym for Customer Relationship Management.  CRM has been around for thousands of years.  It may have been termed other things like:
        • Sales management
        • Customer management
        • Relationship marketing
        • Customer service management
        Trust me, as long as there has been buyers and sellers, there has been CRM.

        CRM Business Strategy

        I believe that CRM is a customer centric business strategy.  Bob Thompson, CEO of CustomerThink Corp. & founder of, put it this way, “’Customer-centric’ means giving your customers what they want.  ‘Business strategy’ means accomplishing the goals of your organization. Accomplish both at the same time, and you’ve got the win-win that CRM is supposed to be about.”
        As I think about a customer centric strategy, other terms come to mind like a customer centric philosophy, approach, tactic or plan for doing business.  My full definition of CRM can be found here, but ultimately it is about maximizing your business potential with your customers.  It’s about keeping your customers happy, since the only way to maximize your business potential is with happy customers.
        There are those that believe the CRM is all about software.  While there are plenty of CRM software system available:
        • SalesLogix
        • SugarCRM
        • Microsoft Dynamics CRM
        • Sage CRM
        • SAP CRM
        This list is growing daily!  CRM software publishers would like you to believe that CRM is about software.  However, in all honesty, software is not required for a solid CRM business strategy.  This is coming from me, Luke Russell, who has been a SalesLogix software developer and a SalesLogix support technician since 1998. 
        But the truth is that CRM is about knowing who your customers are and making them unbelievably happy customers. Saying that CRM is all about software is like saying that accounting is all about software.  Sure, software makes performing the action of accounting easier and faster, but accounting software does not do the accounting for you.
        However, software can play a role in CRM strategy implementation.  CRM software helps businesses to bring together disparate pieces of information about customers, prospects and buying trends so an organization can:
        • More effectively sell and market their products and services
        • Increase customer “happiness” and; therefore, increase customer loyalty
        • Help an organization to remember and keep its promises to a customer
        In its most basic form, CRM software helps users in:
        • Identifying and targeting their best customers
        • Implementing marketing campaigns with clear goals and objectives and generate quality leads
        • Optimizing information shared by multiple employees
        • Streamlining existing processes
        • Allowing the formation of individualized relationships with customers
        • Identifying the most profitable customers and providing them the highest level of service
        • Knowing their customers, understanding their needs and effectively build relationships between the company, its customer base and distribution partners
        There are many ways having a CRM system can help you sell and market your products and services more effectively, increase customer loyalty and drive competitive advantage, no matter how big or small your company is, but it all starts with a customer centric business strategy.

        A huge success.

        While Resolv will be celebrating our tenth year anniversary this year, it is kind of fun to look back at what we have accomplished.  We have had many successes over the last 10 years, and it is exciting to see some of them published. 

        Here are three recent success stories that we have had with Sage SalesLogix customers:


        “We really appreciated Resolv stepping back and looking at our big picture. Sage CRM SalesLogix is now a usable and vital tool for our business.”

        –Karen Roscoe, Product Manager, Bruker AXS

        To view the whole story:


        “Our business is based on relationships and Sage SalesLogix is the foundation. We have access to an enormous amount of data that allows us to provide an outstanding experience for our customers. Resolv has been instrumental in getting us where we are today.”

        –Jason Kestler, President and CEO Kestler Financial Group

        To view the whole story:


        “This was one of the smoothest implementations I have been a part of. The end result was so tailored to our business that everyone took to it quickly.”

        –Ken Deering, Director of Customer Service and Facilities, Bay Tek Games

        To view the whole story:


         Luke Russell 

        Resolv, Inc.

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        CRM and Back Office Integration …

        The what, when, and why of back office integration in 700 words or less …

        I know that my blog posts can get rather lengthy at times, and so I will attempt to tackle this subject in 700 words or less.

        In a meeting with a prospect today, I am reminded of the complexity of back office integration.  However, even more-so, I am reminded of the importance of it.  Let me start with the later and then I’ll take a quick shot at the complexity.

        The importance of CRM and back office integration:

        Integration between CRM and your back office provides your sales team (and all customer facing individuals) immense amounts of useful data.  Just to name a few:

        • Sales by account by year for the last several years: This shows the customer trends and a declining trend is usually a good waning sign of an unhappy customer.
        • Sales by product line:  This lets your customer facing individuals know what product lines the customer is using, and presents opportunities for cross-sale.
        • Aging of accounts:  This will help in collection efforts as your sales people will know the customer’s payment status.
        • Order status: This lets your salesperson know where an order is within the system and will help them to be proactive in negative delivery situations.
        • Credit limit visibility:  This will help your sales team to know if an order is within the approved credit limit and help them to take the necessary actions prior to accepting an order that is beyond the limit.        

        The complexity of CRM and back office integration:

        While this blog is not meant to be an all inclusive check list for the potential issues and problems of back office integration, I will touch on a few key points:

        • Integration may provide access to data that you do not want made available to all users in the CRM system.  Be sure to set security to handle these situations.  For example, it may not be necessary for all users to see cost information.
        • There is always a discussion as to what to do about changes to account information (Account name, address, phone number, key contacts, etc.).  Should we allow anyone to change this data in the CRM system and sync it to the accounting system, or require customer changes be made in accounting and pushed to the CRM system.
        • Where should quotes begin, in the CRM system or in the accounting package?  Should all quotes be an opportunity in the CRM system?
        • In many CRM systems, sales orders and invoices are two separate sets of tables.  Is it important to have one, the other, or both visible in the CRM system?
        • Along the same lines which data should be aggregated (orders or invoices)?  Aggregation of the data displays the total sales by month by year for a multi-year period.  An example is in the following screen shot taken from SalesLogix, a popular CRM application:



        In my experience over the past 12 years, back office integration is a critical element to sales force enablement.  However, it doesn’t have to happen in one massive phase.  In fact, it is probably better to do it in steps.  Start with the area of biggest pain.  If quotes and payment information are your biggest issues, do that first.  Then add in data aggregation in another phase.  Follow that up with invoice or order visibility.  Spreading it out over phases will help you and your consultant to more easily manage the integration and it will help you to keep the costs down while ensuring that the integration is working as you need.

        Luke Russell 
        Resolv, Inc.

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        Trade Shows: How CRM Software Helps with Effective Follow-up

        Proper usage of CRM software can triple your follow-up efforts. (Part 2 of Tradeshows:  More Bang For Your Buck)


        If you are currently exhibiting in trade shows, you may have experienced the lack of post-show follow-up efforts.  Often, the number one goal after a trade show is for exhibitors to catch up on what was missed while they were out of the office.  Days and sometimes weeks pass before all leads are entered and the follow-up process begins.  The only way to combat this issue is to plan for follow-up. Lead follow-up needs to take precedence, if you want to see a return on your investment. 

        Before exhibiting, be sure to document who will complete each step of the follow-up process.  Write all of the email and letter templates before the show. The templates can be as simple as a thank-you note or a packet of literature with a cover letter.  Be sure to have enough literature available to include in the post show mailing.  Taking care of these items before the show will greatly reduce the time required post-show.

        Another factor to poor post-show follow-up is a lack of organization at the show.  Not all leads are put in the same place.  Business cards end up in pockets, and note taking on each conversation is sparse at best.  To combat this, have a folder in which all leads are dropped.  Staple business cards to a “show sheet” in which you can write critical information about the attendee.  Be sure to include a ranking of this lead.  While a ranking is only a gut feeling, and is often wrong, it will give you an idea of where to start when following up on your show leads.    It will allow you to follow-up on your hottest prospects within hours or days after the show ends. 

        Remember, the longer you a lead sit, the colder they it become. Don’t forget the lower ranked prospects in your follow-up effort. The goal is 100% post-show follow-up.  Also, remember to write down and keep any promises you made while at the booth.

        The biggest factor to poor post-show follow-up:  TIME.  Let’s face it; your sales people are simply not ready for a flood of hundreds of new prospects into their pipeline.  Frequently what will happen is that they will perform a cursory follow-up on the “A” leads and basically wait to hear from all others.  At best, a letter will be sent out to all thanking them for attending and asking the prospect to call if they have any questions.  It’s the sit-back-and-wait approach to tradeshow follow-up, and it’s 100% justified because of an overall lack of time.

        Unfortunately, “A” prospects from a trade show are not always the best prospects.  A booth staffer makes this designation based on a gut reaction.  The staffer liked the person, the conversation went well, so they mark them an “A”.  While another had bad breath, and still another wasn’t dressed professionally, so they receive a “C”.  So, how do you combat the ranking and time issue?  The answer is simple:  use a Customer Relationship Management (CRM) program to automate portions of the follow-up.

        SalesLogix is a great example of this.  With SalesLogix you can implement a process to aid in the follow-up of all trade show leads.  A process represents a series of tasks that are executed in a specific sequence, over a set time period. You can create processes to automate the customer follow-up process.  For example, to aid in trade show follow-up, you can set up a process that sends out a thank-you email to all attendees.  The process can also schedule to resend the literature to the attendees and then the process can split and schedule a follow-up phone call in three days for all “A” prospects and send another email to “B” and “C” prospects.  Anytime the salesperson needs to participate in the process, a reminder is automatically placed on that users’ calendar.   Below is an example of a trade show follow-up process.

        As you will see, all prospects start and end at the same point, but depending on the prospect type, there are more “automated touches” to keep the prospect warm until a live call can be made.  By doing this, calls can be spread out over a longer period of time, giving your sales people the time they need to complete the daunting task of trade show follow-up. 

        SalesLogix can not only help you with your trade show follow-up, but it can assist you in managing the ROI of trade shows and all other marketing efforts.  It offers a complete solution for managing, tracking and measuring targeted marketing campaigns and helps companies get the most from their budget.  SalesLogix Marketing provides analytical and marketing tools to streamline your campaigns and perfect your marketing mix.

        In summary, trade shows are expensive, and are worth it.  However, without effective post-show follow-up, they are ineffective, and often do not meet their objectives.  The time to plan for follow-up is before the show begins.  A plan for follow-up is as important to the show as any initial planning. Through proper follow-up, you will realize the financial goals that you have set for the show.  For follow-up to be effective, you must set a date for follow-up to be completed; determine and document the method of follow-up; prepare in advance all post-show letters and literature, and make use of automated processes in your CRM package.


        Luke Russell 
        Resolv, Inc.

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        Do you have an expensive Rolodex?

        Over the last 12 years (yes, I have been doing CRM consulting for 12 years now) I have seen many CRM systems implemented as an very expensive Rolodex, basically to perform the function of Contact Management or Sales Force Automation.  There is a difference between Customer Relationship Management (CRM) and Contact Management.  So I thought today I would help define each step in the Contact Management to Customer Relationship Management chain:


        Contact Management is typically contact based, and is more or less an electronic rolodex.  It is a mailing list for a specific user or group of users, and is normally not integrated across the entire organization.  It frequently does not meet all of the data needs required for managing leads, prospects, and customers, leaving many stand alone islands of data throughout the organization.  Often companies will know they need to move up from contact management when they begin to have multiple contact management databases or when they have to use outside programs like Microsoft Excel or Access to track additional data about their prospects and customers.  Contact management is a great first step into CRM, and Sage software with over 4,000,000 users of ACT! is the world-wide leader in this category.

        Sales Force Automation is frequently account based, and includes enhanced note taking and opportunity tracking capabilities.  It allows for the tracking of more data though configuration, and can be deployed organization wide.  Making the step to sales force automation normally eliminates the need for many of the separate islands of data, leaving only one or two spreadsheets or outside databases for tracking additional data components.  Very often, sales force automation will include basic integration into the back office.

        Customer Relationship Management (CRM) is account based, and includes advanced marketing management, opportunity management, quote management, contract tracking, support issue management, and forecasting to name a few key components.  Basically, it encompasses data from every aspect of your relationship with the customer.  It is fully customizable eliminating all need for outside islands of data about your customer (outside of your accounting/ERP system).  It can be fully integrated with back office and manufacturing and can be deployed across the entire organization, including remote offices anywhere around the world.  Sage SalesLogix is an excellent example of a true Customer Relationship Management tool.  Sage SalesLogix has been the industry innovation leader since 1998 and is consistently winning industry standard and user satisfaction awards.

        Hopefully having an understanding of what CRM includes will help you as you focus on the business goals that you are looking toward CRM software to help you accomplish.  Don’t forget that your CRM strategy and corresponding software implementation is an ever-evolving  part of your organization.   While CRM is not about software, we do have a couple resources on our website that will help as you are evaluating software:

        Luke Russell
        Resolv, Inc.

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