Why You Should Scenario Plan Before You Forecast
Forecasting. Scenario planning. Quarterly projections. Synchronicity. Synergy. Blahblahblah -- confused yet?
The corporate world comes with a lot of lingo that can be baffling to new sales professionals. Some of this language can be particularly difficult to unravel. Today we’re going to demystify one term in particular -- scenario planning. In this series we’ll focus on forecasting (more on that in future posts), but in order to forecast accurately, you have to first be good at scenario planning.
The trouble is, most sales professional aren’t good at forecasting accurately. They may be excellent sales people and have outstanding numbers, but at some point, everyone hits a wall in their career. When you do, you’ll want to be equipped with the tools necessary to climb that wall quickly and efficiently, so you can keep kicking sales butt on the other side.
Let’s start with a little thought experiment.
You’re having a bad month, a deal isn’t closing as quickly as you anticipated. It’s slipped into the following month and now, you have to report this to your manager. As you’re contemplating this meeting (perhaps with dread), some questions arise: Am I prepared to have this conversation or not? Did I foresee this complication? Do I have a contingency plan for what do to now? What am I going to say? What am I going to do? *cue hyperventilation here* Yikes.
If you are like a lot sales professionals -- many of them quite talented at sales -- the answer is no, you didn’t see this coming and honestly, you’re not sure what to do now. Don’t feel bad, forecasting accurately is hard. But luckily it’s not rocket science, and you can start to improve right here, right now. I believe in you! We’ll improve our forecasting by starting with its prerequisite: Scenario Planning.
What’s Scenario Planning and Why should I do it?
The goal of scenario planning is to improve forecasting. And forecasting, by definition is risky. People have been trying to tell the future for millenia and usually we’re not much more successful than the fortune teller down the street. In order to improve the odds of forecasting more successfully (aka accurately) you have to rely on something more than guesswork, tea leaves and palmistry. You can (and should) run through multiple scenarios.
All the questions we asked in the thought experiment above? Run through those mentally BEFORE a situation arises. What will you say? Do? Tell your boss? This way, you’re not surprised when a client, for example, doesn’t respond when they say they will. You’re not worried at all, you’re well-rehearsed. You’ve run through this as a possible scenario and know exactly what to say to you boss when they ask.
If you fail to plan, you are planning to fail.
-- Benjamin Franklin
Scenario planning allows you to see the future of your business by taking into account the impact of certain variables. Specifically, scenario planning is about identifying critical uncertainties and goals in business. Most people don’t do any planning, or fail to take time to out to review business history or plan a couple of scenarios. If you commit to taking the time to scenario plan, you’re instantly ahead of the pack.
Not an Endorsement for Anxiety
It may seem like I’m just encouraging sales professionals to continually think and plan for worst case scenarios. Not true. I know how big an issue anxiety is in today’s society and I promise I’m not advocating that you commit yourself to to thinking negatively about every client you encounter. What I am saying, is you don’t need to fear a situation you’ve planned for. After doing sales a couple of years, I’ve come to see that many sales “problems” are similar and often repeat themselves with different clients. Hindsight, as they say, is 20/20, so instead of repeating mistakes with future clients, I can avoid them through scenario planning.
Those who cannot remember the past are condemned to repeat it.
-- George Santaya
Let’s say a client hasn’t followed up with a deal that seemed closed on Friday at five pm. I’ve been in this situation before, more than once, so instead of panicking, I respond kindly with a quick message on Tuesday afternoon. Something like, “Hey there, hope you had a wonderful weekend with your kids at the pool. The weather was perfect right? Looking forward to your confirmation on X -- let me know if you have any questions or I can help in any way!”
In this instance, I’ve formed a real relationship with my client -- I know what they were planning to do over the weekend -- and respond kindly in that vein, gently reminding them about our conversation last week. No panic, no stress, no anxiety. Just an experienced sales professional using scenario planning to keep things on track.
Yes, but HOW do I actually DO this?
Sometimes it’s best to break things into palatable chunks. Personally, I use a 90-Day Scenario Planning sheet. I’ve designed this to work with my current job and responsibilities, but it can be easily translated to any sales job (and probably jobs outside the sales realm as well). Or perhaps you’re looking for a few simply labeled steps. I can’t say it better than Jay Ogilvy, who wrote a great article in Forbes back in 2015 that breaks scenario planning down to eight steps.
Scenario planning is not easy, and may not seem to be convenient, but it is necessary and helps you avoid certain pitfalls later on. Is sales going to be your art? Your career? What you’re going to do for the rest of your life? Then take time after you close any deal to assess what could have gone smoother and what action you could have taken. Yes it’s time consuming and you may ask, “Why go through all this work?” Because it will be less work for you in the future. Each time you close a deal you gain experience, so you shouldn’t start from square one the next time you meet a new client. Allow your career to build on itself and gain momentum so you can exceed those quarterly projections, have the six figure commissions you’re dreaming of and provide for your family and others generously. Scenario planning creates a self-reflexive environment which will enhance your forecasting, and thus, your career and life.
In a Nutshell
I came across scenario planning when looking for a way to be less nervous and anxious in front of my management team in monthly and quarterly reviews. My teammates would often ask questions “What’s your backup plan?”, “What will you do if X happens?”, “What if the client loses funding?” etc. I began to prepare for these meetings by planning to answer their questions...and thus began to scenario plan for clients inadvertently.
So why do scenario planning? It’s simple really. Sales people should do scenario planning for longevity. Forecasting is a major sales skill required for long term success in this job -- being able to scenario plan will help your forecasting skills be more accurate, therefore more job security and success over time.
Clearly, this is a broad and dense topic. Hardly possible to cover all aspects of scenario planning in one blog post. But if you’re like me and eager to geek out on more info, here’s some great reads to get you started:
Forecast by Mark Buchanan
Superforecasting by Phillip Tetlock
On Grand Strategy by John Lewis Graddis
Farsighted by Steven Johnson
You may want to pick up one of these and read along with our forecasting series! If you do please chime in below in the comments with your take on the week’s subject. I can’t wait to hear from you.
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