Start the year with a below-forecast first sales month and the pressure is dramatically increased for the quarter. If sales fail in the second month, achieving the Q1 forecast just got darn-near impossible.
Why it Matters
When sales fail in Q1, the pressure builds for Q2 to make up for it. If the company is still behind at the end of Q2, thinking you can sell more in Q3 to make it up is a pipedream forecasted by desperate sales managers who are close to losing their year, not to mention their job."
Making the First Month of the Quarter is Possible
Making the first month of the quarter is always, in business-to-business, based on two variables:
- The size of sales forecast for M1 (month one) and the total first three months of the year (Q1).
- Marketing’s ability to get in front of the problem before the first month and first-quarter start.
If the sales forecast for Q1 is not strong (the forecast has been drained by Q4), Marketing will have to step in and create enough demand to guarantee M1, so that there is enough carry-over in the pipeline for M2, and eventually M3 and the quarter.
Many companies make the mistake of thinking they have drained sales in Q4 and they start with a devil may care attitude of vacation and sales meetings. While understandable, this is a mistake. It's a major screw-up.
To be successful in M1 and Q1, Marketing has to create sufficient demand in Q4 of the previous year that will spill over in unclosed leads which pumps up M1 and the quarter.
There Are Usually Two Obstacles to Making This Happen
- The C-level is usually chasing year-end profits and will often cut marketing spend just when it’s needed most in the last quarter of the year for the new year.
- After an exhausting year, sales management will allow vacations in M1. Plus, there will be sales meetings, new rep training, open territories from those who were fired for not making quota, corporate meetings, and sales reorganizations. Just what you don’t need. Of course, many of these things have to happen, but you cannot allow these “corporate things” to affect the front-line people. Sales must put as much effort into M1 and Q1 as they did in Q4.
Any sales manager worth the title should be able to see what M1 and Q1 are going to yield from the forecast. He or she can’t count on magic, discounts or goodwill from the prospects. The only thing they can count on is the honesty of the sales forecast. If the sales forecast is weak, Marketing must step into Q4 of the previous year to have a good M1 and Q1:
- Marketing-qualified leads (MQLs) must begin to surge in M10 of the year, certainly by M11. When MQLs surge by 20%, some will guarantee the last quarter of the year, while carry-over sales that did not close will jump-start M1.
- M1 marketing spending on MQLs must continue and not ease off until everyone is satisfied that the sales forecast is properly supported.
- Sales management and sales staff must launch M1 with activity equaling that of M12 in the previous year. All hands on deck, no vacations, no two-week sales meetings, no activity that takes away from guaranteeing the month which will virtually guarantee Q1.
MQLs are needed to be sure that better than 50% of what you create and send to Sales has the admitted intention to buy something in the near term (six months or less). Personally, I like MQLs to be 50% appointments. Appointments where the prospect has admitted to a need, has budget (not everyone will admit it) and has the authority to buy will bring home M1, and consequently Q1. MQLs close faster than unqualified leads. Appointments close faster than MQLs.
Once Q1 has been delivered, the carry-over will help forecasts for Q2; and so it rolls for the year as long as there is marketing consistency.
Start well and end well is my motto, and it should be yours.
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