The Business of Forecasting Occupancy – “It’s tough and you are not alone.”
by Jay Reischl
The ability to develop accurate forecasts is a difficult issue across all industries. As recently as June 3, 2013, Scott Edinger writes in Forbes magazine, “… the choice between working on the forecast and getting a root canal would lead to a trip to the dentist. And yet, most organizations rely heavily on the “data” that is produced in forecasts to make decisions on everything from budgets to bonuses”.
The article goes on to describe the necessary elements of developing “good forecasting”.
I think the article correctly describes the base requirements needed to develop an accurate forecast. However, the greatest benefit of sales forecasting is somewhat lost (in this article and most others) in terms of how much importance a forecast brings to the organization and all of the stakeholders.
In terms of using sales forecasting to generate planning and budgeting, it is certainly an important function. But if you really want the forecast to provide value, use it to change what needs to be done to hit your sales targets. A forecast by definition gives management pertinent information about the future. If you know what is going to happen in a reasonably distant time into that future, there is time to diagnose, coach and bring the forecast to the target. It is so simple and so often lost. When you have a solid forecast, you can change the outcome toward the desired results.
I believe the author makes a striking note concerning a particular principle of “good sales forecasting” that most everyone else misses. In the article, Edinger writes, “A forecast is a snapshot not a movie.” The sales cycle represents a dynamic, continuously changing operation on a range of sales stages from lead referrals to tours to collecting deposits to losing prospective residents within the sales process. In order to be in touch with the sales potential there is a need to use tools that keep data not only refreshed but visible.
Senior Housing Sales Challenges with Technology
Everyone and every system can create a forecast. But the problem is the underlying process. That is what makes a forecast ‘real’. Is the underlying methodology ‘right’? There is a trend towards sales automation. But to this point, typing more data into a new system doesn’t even correlate with better sales efficiency and effectiveness. The industry doesn’t suffer from a lack of data or reports.
Accenture reports that 85% of Chief Sales Officers reported that their technology has had absolutely no effect on their ability to increase revenues which when you think about it, is the only reason to make the investment.
The industry suffers from experience in differentiating how data and reports can be used to for better occupancy results.
The problem even exists with the use of and compliance of CRM because the reporting tools tend to block visibility by generating lengthy snapshot reports often obscuring important information rather than highlighting opportunity. And a DEI survey study found that sales people in senior housing in general reported that they were spending 30% of their time keying in and managing data. Now, sales people are self-reporting those numbers, but the survey was conducted over 5 years with hundreds of sales people across AL, IL, CCRC and SNF communities.
What’s disturbing is that the executive team is investing in systems that may be good for much, but without caution, they can tend to extract valuable sales time away from selling activities. The Accenture report confirms those results. We think there is a better approach to sales operations, management and forecasting.
A New Way to the Forecasting Effect:
- You need to get people taking ownership for their numbers all the time, all day, every day
- You need a new way to measure
At DEI we have taken 30 years of proven process to develop accurate forecasts. We do it every day to help senior housing clients maintain accurate forecast and reach their occupancy targets.
And most recently we have developed a software tool to improve the use for simple access, visibility and aggregation.
Check out Sales6ix as a way to get back in control….
For more information feel free to contact Jay Reischl at: email@example.com or 402.991.6735.