Sales forecasting, like nuclear power, can be a dangerous business.
When a customer provides you with a date --- “we will purchase by December 15th” --- please handle this statement with extreme care.
The worst thing you can do: take the date at face value, and tell your sales manager it’s the date you expect to receive the PO.
Whenever you think you have a date certain for receiving an order, don’t celebrate. Instead, put on your skeptic’s hat and ask questions, such as:
Who needs to approve this purchase?
What forms must be completed prior to purchase: an NDA? a Master Services Agreement? a Statement of Work (SOW)? A W-9 tax form?
Will we need to be processed as an approved vendor?
Will the purchase be made through a channel partner?
Here’s an example. Two years ago a large bank told us with complete conviction that their absolute can’t miss purchase deadline was December 15th. After inquiring further, they insisted that by that date (within the next 30 days) they would review competing products, issue an RFP, get through a security audit, and issue a PO to the selected vendor. Yes, they communicated that timeline with a straight face, as if they were telling us the sun would rise tomorrow.
But to us, it defied the laws of physics. And so it did. By December 15th, they hadn’t even finished reviewing our solution, let alone issued an RFP. Purchasing was not a gleam in anyone’s eye by that date (and the purchase didn’t happen for another three months).
Why would a buyer issue an unrealistic timeline to a vendor? Let me count those ways in a future post. Meantime, when you hear a close date from a prospect, bring your questions to the table.
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