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6 Strategies to Build a Forecast You Can Believe In

Authored by Jim Eberlin on March 31, 2017

Do you "trust" your forecast?

For many, it’s that time again…..It’s time to forecast for next quarter.  For serious sales leaders, this is no trivial task.

“You missed the number? Hey, no problem, you’ll get it next quarter!” said no CEO or board member ever!!!

Credibility in hitting the number is absolutely the most important thing for a sales leader.  And these leaders that hit their number regularly, don’t have it easy.  It’s usually a grind with a mad scramble at the end of the quarter to hit plus or minus 5%.

It doesn’t have to be such a painful process.  If you can trust what you see in the pipeline and that your pipeline is filling at the appropriate rate with qualified leads and opportunities that fit your ideal customer profile, you can have confidence that you’ll hit your number.  (Here’s a simple guide for analyzing the pipeline)

Before we cover what’s needed to have a forecast you can trust - let’s look at how we create and manage a forecast today.

How “Not” to Forecast

If you’re like most execs in sales or sales ops, you’re armed only with a couple of reports from your CRM and a spreadsheet. You list and manage the opportunities by sales rep and by stage - then you spend a lot of time in conversations with your sales team.  Eventually you contact them daily for status updates.  Conversations are great with the sales team - especially on strategy to close deals, but it’s such a waste of valuable time to do daily status conversations between manager and sales reps on the same deals.   This leaves very little time for selling, coaching and strategizing - among other priorities.   If you have a lot of reps or sales managers,  there’s minimal visibility and knowledge about deals in this process.

You print out the pipeline for the team - it shows 3x to 4x the number.

Questions you should ask yourself.  Can I rely on that 3x to 4x pipeline number?  How do I find out how good that pipeline really is?  Can I rely on my weighted average number? Is there an easier way to get visibility into deals?  What do I have to do to get this forecast to where I can trust it?

Additional Side Effects Caused by Your Current Sales Forecasting Process:

Because the current sales forecasting process is such a time suck, you hardly have any time left for:

- Coaching and developing the sales team
- Updating, clarifying, and communicating the sales process to maximize conversions
- Ramping new sales reps
- Understanding the effects of my lead-gen effort and flow through the sales funnel

And by not spending the time you need for these four important sales initiatives listed above, closing business and quota attainment suffers.


The right way to create and manage your forecast - so you can trust it!

Sales Automation for the Sales Forecast

Imagine if you had an assistant that knew your sales process and prompted you on a logical next step on a deal that was still active but you were starting to neglect?  Or if all of your deals magically went to the appropriate stage and milestone and gave you an accurate forecast.  These are examples of what automation can provide and applying it to the sales forecast is a must.  Automation is valuable because it saves a ton of time, and it organizes and applies discipline and rigor without the manual effort.  With process, workflow, and pipeline hygiene automation, an entire sales team will have a lot more time for selling and more value-added activity.  These efforts are normally manual, time consuming and error prone.

The Use of Artificial Intelligence

AI provides an order of magnitude of valuable information and insights for sales forecasting.  By applying the disciplines of sales automation for sales forecasting, data can be analyzed and insights derived.  For example, insights that alert you to whether you have enough pipeline to hit the number this quarter or next quarter, and what to do about it.

Do Not use BI Tools for Sales Analysis!

Leave the Business Intelligence tools for accounting, HR or other departments where the data is more manageable.  Using BI against untamed data in the CRM is almost as bad as using the spreadsheet.  BI tools in the sales department usually end up as great looking graphs displaying insufficient and inaccurate data regurgitated from the CRM.  These tools lack the automation of a sales forecasting application and the artificial intelligence based on knowledge of the sales domain.

So, how do you apply sales automation and AI to your sales forecast?

The following are 6 strategies that can be utilized through automation and AI, that will enhance the sales forecast as well as provide additional benefits to increase win rates and quota attainment.

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1. Prescribe rules for the Sales Process

Create rules for advancing and regressing leads and opportunities as well as when and why to close them as a loss.  Keep everyone from management to the sales rep on the same page about process rules.  Discipline around when to move a deal, why, and where it belongs will keep things well organized and consistent. Here is a great resource on how to build, tweak or overhaul your sales process - How to Build a Winning Sales Process Guidebook   

2. Enforce the sales process

CSO Insights research shows a 23% increase in quota attainment occurs when a rigorous sales process is used.  By understanding how a deal flows through the funnel you’ll have accurate information on where deals get stuck and conversion rates - excellent data-driven coaching information.  And it’s not enough to just have a process.  Many do, but it’s just written down somewhere or a powerpoint print out is pinned up on a cubical wall and therefore loosely adhered to.  There needs to be reminders to the sales reps on the next step that follows the appropriate sales process.  These steps have a time limit if done effectively.  Automation serves sales reps in this way - increasing the likelihood of a sale.

3. Enforce Pipeline Hygiene

Making sure information is accurate and removing deals that don’t belong, improve analytics immensely.

4. Make it easy to update the CRM

Sales reps need to provide their point of view on deals.  These status updates need to be in the CRM as soon as possible after any meeting or communication with prospects and customers.

5. Capture “the right” signals for Artificial Intelligence

Artificial intelligence can provide great insights, but false signals could distort prescribed insights for decisions.  Quality signals such as emails from prospects and meetings from the sales teams’ calendars are helpful to determine opportunity quality.

6. Analyze how deals flow through the funnel by rep and by time

Now that you have 1 through 5 of the strategies in order, managers and sales reps have sufficient and accurate data amplifying their ability to get real insights.  This guidebook explains how to analyze performance and customize coaching to get the entire team exceeding quota.

By applying automation and AI in this way, you’ll be able to trust your sales forecast, while developing and making your sales team better.  No longer will you wonder if the 3x or 4x pipeline coverage are really comprised of good deals.  Conversations that you are having with the sales reps will make their way into the CRM making for better analytics.  Ramp time of sales reps will be quicker, providing faster times to quota attainment.  And you’ll have time along with data-driven analytics to better coach the team.  And thank goodness - you can finally get rid of that spreadsheet!

To see how sales automation and artificial intelligence can be applied to give you a consistent sales process and accurate forecast with TopOPPS, click here.

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