Tag Archives | CRM

How to Produce Realistic Sales Projections

2016 has flown by and we are already in the fourth quarter! As we wrap up the year in just over a month, strategic planning for 2017 is happening in businesses across the world. As the person responsible for the bottom line, your job as a financial leader is quite simply to improve profits and cash flow. While that may sound easy, there are many nuances that are outside of your specific function (CEO, COO, CFO, Controller, VP, etc.) that you need to learn to lead your organization financially.

Working on 2017’s sales projections? Are you responsible for the bottom line? Download the free Goldilocks Sales Method whitepaper to learn how to build your sales pipeline and project sales accurately.

While there is still ample time left in the year, it’s never too early to start preparing for next year. If you’ve already started your projections for 2017, pull out your sales projections because there may be things you are missing. However, if you haven’t even thought about next year’s financial situation, here are some tips on how to produce realistic sales projections.

How to Produce Realistic Sales Projections

Producing realistic sales projections is difficult primarily because there are no guarantees. But you can avoid producing overly optimistic projections.

Why Most Sales Projections Fail

Most sales projections fail because of the financial leader’s inability to factor in potential risk and uncertainty. Just like in the children’s story Goldilocks, companies can easily miss the mark by producing projections that are either too pessimistic or too optimistic.

Start Doing Projections Now

Like I said, it’s never too early to prepare for what’s next. Are your sales projections realistic or optimistic? This would be the time to adjust any discrepancies in your financial projections. Don’t forget, 2017 is only a month and a half away!

Ask Questions

As you start working on your sales projections, it is imperative that you ask the following questions to your sales team, executive team, and financial team.

  • Where did the company meet the targets previously set for the company and where did the company fall short?
  • What did your team learn over the course of 2016?
  • What unfinished business will the company take into the new year?
  • What does success in 2017 look like?
  • What steps does the company need to take to increase the probability of success?

Starting Small: Unit Calculations

You can track future sales by calculating the expenses and comparing the number to unit sales. First, consider the expenses your business usually has: rent, loan payments, vehicle payments, utilities. Also include inventory and the equipment needed to produce the items. Tracking every expense for a future budget is crucial. Second, factor in the income sources. This can mean anything from time to units sold. Finally, compare the expenses to the sales. Do they change during the season? Use the year’s patterns to project next year’s performance.

Also take a look at your unit economics.  For every widget you sell, what is COGS and margin?  Is your margin sufficient to cover your fixed costs?  If not, then you should determine whether a pricing adjustment is in order, or if you just need to sell more of the item in order to cover fixed costs.

If you’re still not sure how to accurately project your sales, click here to access your free Goldilocks Sales Method tool. This tool allows you to avoid underestimating or over-projecting sales.

Watching Market Trends

You also need to factor in market trends. Preparing an external analysis will help you strategically plan your year and project accurately. Evaluate sales for companies in your industry, in your city, and your customer’s industry.

In Houston, the oil & gas industry has impacted the local (and even the national economy) over the past 18 months. Our 12-on-12 analysis has analyzed past 30 years of rig count and oil price data; using a guide like this allows our company to estimate how our and our clients’ business is going to fluctuate.

Be a Financial Leader

One of the common misconceptions about being a leader is that it’s all about delegating tasks.  While trusting your team and empowering them to make a difference is a crucial part of leadership, some tasks require your experience and expertise.

One of the most important ways you make a difference as a financial leader is by building bridges between departments in your company.  Since everything in a company is tied in some way to finance, it’s your responsibility to ensure that operations and sales have the information they need to be their best.

Don’t just ask your sales team for their sales forecast and plug it into your projections without another thought.  Instead, work with them to produce a realistic and attainable forecast that will guide the company over the next year.  The tighter your sales projections are, the better your financial projections will be.  As they say, it’s all about sales, the rest is just details.

How To Work With Sales

The idea of working with your sales team can sometimes be daunting. Financial people tend to be cautious and are more likely to understate projections. Salespeople can be very optimistic and will tend to overstate projections. If you ask your sales team to provide 2017’s sales projections, they may say that the company expects to grow 40% in revenue.

Sounds great, right?

Only if the facts bear it out.  Take a look at year over year sales reports. Over the past ten years, the company has only grown 20% year over year. Unless the company is releasing a new product line, etc., then you can make a calculated assumption that a 20% growth rate is more reasonable.

Educating your sales team on past sales trends and listening to them about what they’re hearing in the marketplace will allow you to produce more realistic sales projections than either of you might crank out on your own.

Manage Sales With a CRM

So you’ve worked with your sales team to come up with some killer sales projections.  You’re done, right?

If you’ve ever worked with salespeople, you know the answer to this question.  Giving a salesperson a goal but not holding them accountable for results is a recipe for failure.

What Gets Measured Gets Managed

In order to help them keep track of their goals and measure progress along the way, it’s a very good idea to invest in a Customer Relationship Management system (CRM).

One of the most attractive aspects of using a CRM to track customers and sales is the ability to compile information from many different communication channels (social media, website, telephone, radio, television, direct sales).  Even if your business is currently only communicating with customers in a few ways, it’s a good idea to have a centralized database with all your customer data so that your sales team can document customer preferences, communications, and goals.

Most CRMs will also function as a tracking system for progress towards sales goals.  Just the act of entering and tracking sales in a CRM can help keep your sales team focused on all customers and not just the ones that are causing the phone to ring right now.


Producing realistic sales projections should be a priority for your company, particularly at this time of year. If you need help creating an accurate sales pipeline, download the Goldilocks Sales Method. Let us how you think 2017 is going to look by leaving a comment below.

Produce Realistic Sales Projections

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Produce Realistic Sales Projections


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Five Reasons To Pay Attention To CRM Software

See Also:
How Do You Know When It Is Time to Buy New Software?
How to Choose New Software
Technology Assessment Criteria
How to Choose a Software Dealer
Technology Strategy for Small to Medium Sized Companies

Five Reasons To Pay Attention To CRM Software (Customer Relationship Management)

Customer Relationship Management or CRM software is not usually one of the top concerns of CFOs and probably with good reason given the poor rate of successful CRM Software implementations. However, what you may not know is that if CRM is implemented correctly, then it can provide a wealth of very relevant and useful information for a CFO. A good CRM implementation will yield all sorts of useful data regarding everything from ROI on sales and marketing expenses to projected operations resources requirements. If those figures sound peak your interest, then read to learn about the five reasons to pay attention to CRM software.

1. CRM Software Packages Can Help Determine ROI on Marketing Campaigns

Do you ever look at your marketing budget and wonder how much you are really getting in return for those dollars? On the flip side, are you afraid to spend money on marketing because you are not sure about ROI? CRM Software can help because it can allow your sales team to capture where sales leads are coming from and track those leads all the way through to closed sales. I’ve often seen clients who thought they had a good feel for where their sales were coming from until we actually started tracking them – the results are almost always surprising. The screen print below illustrates what a good Win Report can tell you (i.e. what percentage of your business is coming from which referral sources).

  Company                  Opportunity                         Revenue  % Revenue
Client Referrals
  Agricultural Focus       25 tons premium product B             55000
  Greek Vineyards          5 tons product A, 10 tons product B   37000
                           Subtotal                              92000   25%

Industry Trade Magazine
  Ciro's Co.               50 tons product A                     75000
                           Subtotal                              75000   21%

Trade Show ABC
  Flowery Inc.             50 tons product A                     75000
  Amberly Watkins          25 tons product A                     40000
  Forestry Inc.            30 tons product B                     70000
                           Subtotal                             185000   51%

Trade Show XYZ
  Wings Express Delivery   5 tons product C                      10000
                           Subtotal                              10000   3%

                           Total                                362000

After reviewing the Win Report above, you may want to skip Trade Show XYZ for the next year. It cost you more than $10,000 for booth space, promotions, travel, and lost time out of the office. Trade Show ABC on the other hand, looks pretty good.

Download The Internal Analysis Whitepaper

2. CRM Software Can Help Determine ROI on Future Expenditures

Just as important as tracking where your sales are coming from, tracking why you are losing business is one of the important reasons to pay attention to CRM software. A good Loss Report like the example below will tell you which investments in additional resources will most likely pay for themselves.

                                                      Projected  % Lost
    Company                 Opportunity                Revenue    Sales
alternate vendor - Company X
   Test Demolition          25 tons product A            40000
   DEF Company              50 tons product B           110000
   Good Prospect Limited    10 tons product A            17000
                            Subtotal                    167000     30%

alternate vendor - Company Y
   Brandise Consulting      20 tons product A            35000
                            Subtotal                     35000     10%

untimely credit process
   My Favorite Prospect     50 tons product A            75000
   Jaconbs & Co             100 tons product A          150000
   Just Another Company     25 tons product B            55000
   Not Abad Prospect        30 tons product A            45000
                            Subtotal                    325000     50%

Budget issues
   What A Client Co         25 tons product B            55000
   Hot Prospect             20 tons product A            35000
   Sports Equipment         10 tons product B            22500
                            Subtotal                    112500     20%

                            Total                       639500

If you could spend $55,000 to fix your credit process, then wouldn’t you feel more comfortable doing it with the information above?

3. CRM Software Can Help You Predict Future Resource Requirements

Wouldn’t it be great if you could predict more accurately how much new business to expect next quarter? You could feel more confident in hiring additional employees or waiting for a better candidate based on the predicted need. The problem is that very few sales organizations provide accurate sales forecasts if any. A good CRM software will tell you not only what sales are projected to close, but what the likelihood of their closing is. Forecasts that take historical data regarding closed sales into consideration are much more likely to give you an accurate picture of impending resource needs.

4. Properly Implemented CRM Software Makes Sales People More Efficient & Effective

The average CRM database often ends up being little more than a method for your sales people to mark their territory at best or an expensive address book at worst. However, a well implemented CRM software will help your sales people implement strategy to meet your company revenue goals. In addition, they will work smarter and incorporate their sales training. Sales training is another expense that often doesn’t see the return on investment it deserves. More efficient salespeople add more revenues to your bottom line with less payroll expense.

5. CRM Software Implementations Can Be Expensive!

While a well implemented CRM can provide invaluable data, a poorly implemented may end up being worthless. When implementing CRM software, you want to make sure that you spend enough. You want to make sure that you are not just purchasing the software but also providing relevant customization, training, installation and integration with existing systems.

Mistakes Implementing CRM Software

One of the most common mistakes made in implementing CRM software is forgetting about the really important investment in training users. This is especially true if the system is not particularly user friendly. If training is not well executed, then the success of the entire implementation is in jeopardy. If users don’t embrace your new CRM, then the quality of the data they input will be poor. As a result, it will yield poor quality reports that no one will trust or use. Now you’ve just wasted a huge chunk of cash, time, and energy on a useless system.

So the next time your eyes start to glaze over at the mention of CRM software, perk up – you may have more to gain or lose than you previously thought. Choosing the right software is so important. Check out our free Internal Analysis whitepaper to discover what you need strengthened and/or resolved. Then choose a CRM software that will help you accomplish those goals.

Reasons To Pay Attention to CRM Software
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Reasons To Pay Attention to CRM Software

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Business Intelligence and Finance

See Also:
Double Entry Bookkeeping
Market Positioning

Current Business Intelligence and Finance Approach

Business Intelligence (BI) technology has evolved so much in recent history to bring the world more than just operational reports. Unfortunately, with all the capabilities that we have with Business Intelligence, firms are still following conventional wisdom in their implementation strategy which is to invest heavily in implementing an ERP/CRM or other transactional system, build integration into other systems using those tools, and bolt Business Intelligence on top of it all as an after thought.

This approach is entrenched into our standard practice, does it still make sense to follow this practice given how far we’ve come in BI technology? Probably not! Organizations wind up with implementation headaches due to their focus on end-state solutions. However, organizations should also focus on building cost effective, workable solutions during transition.

Download The 7 Habits of Highly Effective CFOs

Why Plan for Business Intelligence

Three reasons firms should consider business intelligence and finance BEFORE any major system investment:

1. Proactive Integration (PI)

Proactive Integration is the use of Business Intelligence to bridge new systems and legacy systems seamlessly during migration. Industry standard BI providers like Business Objects offer solutions that can integrate any standard data source. In Addition, technical resources are more easily accessible and transferable in the Business Intelligence space than they are in the ERP Space. It is much more effective, efficient and far less costly to build a solution in Business Objects than to buy, implement, and customize the same work though ERP providers like Oracle or SAP. Business Intelligence can transform data from multiple data sources into actionable, easy to use solutions. That is what Business Intelligence does best! Why not use Business Intelligence to manage, reconcile and control transactions flowing between legacy and new systems? Why not make that process painless while eliminating a large investment of time and capital?

2. Inevitability of Business Intelligence

Whether we are talking about operational reports, analytics, or dashboards, BI has been growing at staggering rates year after year. Business Intelligence is now the number 1 information technology investment in large businesses, and is rapidly becoming the number 1 investment in Medium size firms as well. According to John Schwartz, CEO of Business Objects, Business Intelligence is going to become more ambient, making it second-nature to obtain and interact with information, anytime, anywhere.

For example, you will be able to pull real-time reports on your PDA or GPS in your car on your way to a client. With the emerging concept of mash-ups, you will be able to get real-time information from multiple internal and external sources neatly summarized in Dashboards and analytics in a format that make sense to you. Business Intelligence applications are going to be limitless in its applicability the way a PC is. Business Intelligence will define the way we do business. Having BI on every computer is quickly becoming as critical as having a computer on every desk. In light of the inevitability of BI, why invest in throw-away integration solutions or do unnecessary manual work when BI will minimize your integration pains with a minimal and arguably inevitable investment? You need BI anyway. Why not leverage it for data integration?

3. Intelligent Project Management (IPM)

Intelligent Project Management is the deployment of BI in the design and implementation of Project Management. Tools like Microsoft Project help project managers track a project. It is a great tool but it is too complicated to use to analyze a project by itself. It needs BI to allow you to better analyze the progress of your project, allow you to perform what-if analysis, and more. BI is excellent in highlighting patterns and areas of concern in testing scripts. BI can also greatly reduce the time you need to identify dependencies and conflicts, thus making it easier to communicate these issues to your PMO. What if a company chooses a certain implementation path over another on a project? How much time and money will that cost or save the company? What if we wanted to track risk against one implementation path versus another?

IPM is here to make your answers to these questions easier and far more intuitive.

Benefits of Intelligent Project Management

Are you contemplating or presently implementing a new systems project?

Wait!! Don’t risk losing your data in the process of migrating from your old system to your new one – Avoid costly implementation mistakes through Intelligent Project Management (IPM) and Proactive integration (PI).

With Intelligent Project Management and Proactive Integration, you can achieve the following:

Ensure that you can easily manage the flow of information between your old system and new system.

Validate the veracity of your new system and your data during testing. Ensure a much more seamless transition and flatter learning curve for users. Prepare your entire organization for every stage of your implementation.

Use Intelligent Project Management as a surefire way to reduce risk and save capital. Be able to track risk against one implementation path versus another.

To learn more financial leadership skills, download the free 7 Habits of Highly Effective CFOs.

business intelligence and finance

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Access your Flash Report Execution Plan in SCFO Lab. The step-by-step plan to manage your company before your financial statements are prepared.

Click here to access your Execution Plan. Not a Lab Member?

Click here to learn more about SCFO Labs

business intelligence and finance

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Customer Relationship Management (CRM)

See Also:
Customer Analysis
Profitability Index Method
Segmenting Customers for Profit
Five Reasons To Pay Attention To CRM Software
Market Segmentation

Customer Relationship Management (CRM)

Customer relationship management, or CRM for short, is the process by which a company identifies customers based on profitability or sales, and markets to them specifically. By identifying the best customer, the company has the ability to provide a unique offering to that customer or customers. This means repeat visits by that customer and a relationship that should be sustainable even through bad economic turns.

Customer Relationship Management (CRM) Meaning

Customer Relationship Management means that a company possesses the knowledge and capability to not only identify a target market or segment, but it is also able to provide a unique offering to maximize benefits for both companies involved. There are several steps involved when evaluating the customer relationship and providing the offering as follows:

Define the Ideal Customer

Most companies do not take the time to evaluate who their best customers really are or what they might look like. Instead, they go by something like a percentage of revenue calculation. But they don’t take into account the amount of resources or time a large high maintenance customer may be using up and therefore digging into their profits.

Target Marketing & Sales to Your Ideal Customer

Once you have identified your ideal customer, your sales and marketing activities should be targeting those particular customers. For example, if you identify entrepreneurs as your ideal customers, you should target your marketing and sales activities toward places that attract entrepreneurs.

Download The Internal Analysis Whitepaper

Once this is done there are two options that a company can pursue in order to gain profitable sales as follows:

Option A: Tailor Your Products to Better Serve Your Ideal Customer

Many companies develop new products or services. Then they ask their sales and marketing teams to go sell them without evaluating market needs. Your existing customers are the easiest to sell to. So make sure that your core business and any new products you add are aligned to serve your ideal customer profile.

Option B: Define Your Unique Value for Your Ideal Customer

In a down economy, the companies that survive are the ones that can show their unique offering or value and in a recovering economy those are the companies that thrive. Figure out what unique assets your company can bring to your ideal customer. Then help your sales and marketing team communicate them to prospects. Companies that stand out are those that can build customer relationships. In addition, they provide a meaningful service and value to their ideal customers.

Download your free Internal Analysis worksheet to start developing and enhancing your strengths as well as start reducing and resolving your weaknesses.

customer relationship management

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customer relationship management

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