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Sales Forecasting Is More Than Pretty Dashboards

Authored by Jim Eberlin on December 22, 2014

Inaccurate sales forecasts are a great way to kill the board’s confidence in you.  So, let me tell you a personal narrative having to do with that. Right after getting out of a board meeting once, I found out that my sales forecast was way off.  A few of my bigger deals fell out that really changed the outlook.  It was one of my first board meetings with this particular group of investors, and I was hoping to gain a lot of confidence out of the gate. This did not help.

My dashboards for the sales forecast and analytics looked incredible. I spent a lot of time working on the visualization. However, they lacked real substance.

So, here are three things I now make sure to review. I hope this will help you as well in understanding how to supercharge your sales forecasting and analytics. By doing so you will be able to close more deals, and do so faster.  It also will allow you to have a real handle on which opportunities are going to close in the sales period, which in turn will build confidence within your board and other stakeholders.

1. How are most sales managers/executives forecasting and staying on top of their pipeline today?
2. What’s missing? What are best practices? And why is the process in need of an overhaul?
3. How can current, proven and available technology accelerate deals through the pipeline and predict which will close?

HOW IT’S DONE TODAY

Sales forecasting today is predominantly made by the gut feel. It may seem at times like there’s some science to it, but the marrying of “system generated forecast” from your CRM and the “feelings-based forecast” from your sales reps is still by the gut. The system generated version is taking a percent from each stage, but how did you come up with that?  By your gut?  Do you have empirical data that tells you what it should be? If so, where did that come from?  Also, what if you have a few really big opportunities in that stage, and they fall out?  How does that affect what you forecasted from a weighted percentage?  You can try doing an average amount and multiplying it by the number of deals in that stage then take the percent, but it will still be by the gut. Not to mention most of us can’t come up with an accurate average sales price.

In addition, we forecast by asking the same questions over and over each week in the sales meeting while also spending too many hours in 1on1s. Sales meetings were designed for more value add, instead of rehashing “what deals will close this period?” and “what deals are you working on this week?”  We should already know these things going into the meeting.  Also, these verbal 1on1s need to have this data captured in the CRM so that opportunities can be analyzed based on their attributes, progress, status and qualitative input by the reps.

WHY FORECASTING NEEDS AN OVERHAUL

So what’s missing?  What should we be doing?  We’ve been forecasting this way forever and it’s long overdue for an overhaul.

First we have to engage the sales reps.  We need to have them frequently update the status of opportunities at each interaction. Updates include:

Stages:   the category of status (ex. Qualification, Defining, Negotiating, Contracts, etc.)
Milestones:   the points that have to happen before the deal advances to the next stage
Attributes:   information about the company and opportunity including market, size of company, price, competition, products, etc.
Qualitative Input: sales reps will provide their personal assessment of what’s going on.

This information HAS TO be captured in the CRM on each deal.  Without it we have no empirical data to support our analytics and dashboards.  We need to understand more about our sales cycles, win rates, performance and deals that fit our wheelhouse.  Most companies now do not have current information or status of opportunities within the CRM, nor do they have these opportunity attributes updated.  So forecasts, again, remain by the gut.

So why aren’t sales reps updating all this fresh information on a frequent basis?  Why do we continue to spend hundreds of hours in 1on1s, all the while not capturing this information?  Why do we spend all this non-value added time in the sales meeting discussing from the beginning what deals we are working and what’s happening?

Because the word is just getting out about new and proven technology available to do three things:

1. Easily capture much more detail about opportunities and record it in the CRM (real time)
2. Analyze, score and give insights on next steps to drive an opportunity forward
3. Predict which opportunities will close for the sales period

Sales forecasting technology is available now and is purpose built with predictive and prescriptive analytics, as well as possessing intelligent mobile capabilities. This makes it super simple to update relevant deal information right after it happens.

Current and modern technology HAS TO be leveraged to keep data clean, current and logical. Systems can be used to alert reps of exactly what should be updated and make it super simple for them to do so, especially by leveraging intelligent mobile solutions.  Advanced analytics are then required to score and predict which opportunities will close, while machine learning continues to learn your process and suggest ways to improve.  Ultimately, this allows your sales team to speed up and win more deals.

So keep the pretty, but get rid of the static dashboards. Utilize the best practices and technology described above to always have confidence in meeting your numbers.

Click HERE to learn more about TopOPPS's sales performance and predictability solution.

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