The sales forecast can be a key strategic asset for your business. But only if sales teams and managers are aligned around the right data, goals, and a shared vision for success. That’s why it’s crucial for sales teams to tackle forecasting challenges collaboratively, with the right information, and a shared understanding of which activities are necessary to meet sales objectives.
The problem is, it can be tough to get right. Often, sales teams and managers aren’t on the same page with respect to deal progress, and miscommunications can result in a preliminary forecast that veers wildly from the actual revenues that your team will bring in.
So, how do you get it right? Keep reading to find out.
Tackling Sales Forecast Challenges
Want to increase the accuracy of your sales forecasts? Take the time to set up strong internal processes to ensure that goals are being met, and progress is being accurately tracked. A winning sales forecast relies on these key elements:
#1 – Define the buyer’s journey.
If you don’t understand your buyer’s buy, you risk building a sales process around a buyer’s journey that doesn’t exist.If you’re clear about how prospects engage, evaluate, and ultimately purchase your product, it’s much easier to accurately predict sales outcomes. What’s more, when the buyer’s journey is broadly understood throughout an organization, it’s much easier to see where individual contributors make a difference in getting to the finish line, and ultimately closing deals.
#2 – Use commonly understood terms.
It sounds simple, but if there’s confusion around the definition of what terms like “deal commit” actually mean, then major upsets will work their way into the sales cycle. Define the buyer’s journey through your sales process in clear terms. Make sure you take the time to operationalize these terms so that reps and managers are consistently and objectively driving their conversations according to the same underlying assumptions and broader framework.
#3 – Create a sense of urgency with deadlines.
Nothing helps close a deal faster than a sense of urgency.Build deadlines into the forecasting process in various ways. Get reps and managers to commit to numbers no later than a few weeks into the quarter. Ensure that everyone is accountable to meet regular deadlines and set weekly meetings to confirm goals, or establish a regular meeting to check in on progress.
In addition, establish a cadence of regular check-ins that help sustain momentum, but don’t lead to micro-managing. Give reps enough independence to empower them to be the CEOs of their territory. A sense of ownership will drive the behaviors that lead to a high performing team. But remember, you’ll also need to make sure your meetings are not so far apart that it signals a lack of method or rigor. Experiment with the variables until you hit a pattern that works for you and your team.
#4 – Inspect, identify, adjust.
A sales forecast is an evolving target that requires continual readjustment. To do this, enlist technology as your guide. You need to befriend the data powering the numbers — and use these numbers together with the instincts and predictions from your team. Every time a sales rep gives you a verbal update, be certain that feedback is grounded in actual data. Is his or her instinct well-grounded in the numbers, or is it merely anecdotal evidence? Compare the commits of reps and managers — if you see a manger committing higher than her reps, make sure the data supports the numbers.
Key Takeaways
Sales forecasting is a science that needs to be perfected. By following these key steps listed above, your sales forecast will be continually up-to-date and accurate as you adjust the upside deals or close dates — and will leave enough space to accommodate risk. You’ll also learn the tendencies of each individual rep and manager — who has a tendency to over-commit and who tends to sandbag. This will help you fine-tune your 1:1s and team meetings — empowering your team by being both visionary and realistic — and inspiring strong, honest performance.
“What Else Can I Do?”
Attend Clari’s upcoming webinar, “Sales Innovator Stars: Women in Sales Ops Take the Lead,” on Thursday, August 3, 2017 @ 10AM-10:45AM PDT, and get more tips on sales ops best practices, sales ops strategies, how to face sales execution challenges, and what to expect as the role of sales ops evolves, from sales ops leaders who are at the top of their game!
