Deals often fall through in the final weeks of quarters, and shortfalls between predicted and actual revenue will disappoint shareholders, and throw a wrench into strategic plans. Organizations have to forecast numbers as close to the mark as possible, and in order to do so, the entire sales team must be invested in forecast accuracy.
Here are four strategies to set sales teams on the right path, and to create a culture where salespeople are invested in forecast accuracy.
1. Set Them on the Right Path with Consistent Definitions
When your sales team works from a consistent set of definitions, e.g. what is a qualified opportunity, then it will be easier for management to trust the data they have. A qualified opportunity can be defined by a set of characteristics or behaviors that a company sees, again and again, that signal buyer readiness, or unreadiness, to purchase.
Once these characteristics or behaviors have been defined, sales leaders can set consistent definitions for salespeople so they understand exactly what a qualified opportunity looks like. Sales leaders must then enforce processes that ensure opportunities are qualified, and that they are pushed through the pipeline when they are supposed to be, e.g. when they meet the defined characteristics. Here are few tips for sales leaders:
- Build an understanding of where the prospect is in their decision-making process, that has been verified by evidence, and document what steps still need to be taken before they are ready to purchase.
- Redefine the stages in your pipeline to reflect key stages in the prospect’s typical decision-making process.
- Identify a handful of key characteristics (e.g. sales cycle length) and ensure salespeople evaluate every opportunity in a structured fashion based on these characteristics.
2. Set a High Standard for What’s Included in the Forecast
Following up on tip number two in the previous section: Redefine the stages in your pipeline to reflect key stages in your prospect’s typical decision-making process. When an opportunity is promoted to the next stage under this model, it is only promoted after verifiable progress can be demonstrated. Verifiable progress is the evidence collected from the defined characteristics that demonstrate buyer readiness. Think about forecasting as an evidence-based process. Your salespeople need to prove that an opportunity is verified, therefore, making the threshold higher for what is included.
The purpose of setting a high standard for what is included in the forecast is to reduce the margin of error. All deals should be included in the pipeline, but not all deals should be included in the forecast unless it passes “the standard” that has been set by the sales organization. Any deals that don’t meet this standard, should be kicked out the forecast, and management must enforce the standard and ensure deals that aren’t fully qualified are not included in the forecast. In other words, restrict the forecast to the forecastable.
3. Create a Culture of Mutual Learning
“One for all, and all for one,” right? What does this saying really mean? It means we’re ALL in this together.
This is the mentality managers need to take to their salespeople and provide a compelling vision of the future where everyone works collaboratively and invests in forecast accuracy. This compelling vision should explain why it is beneficial to a salesperson to care about forecast accuracy, e.g. it can affect their performance reviews, if forecasts are consistently accurate they have an opportunity to receive a bonus, etc. When trying to convey why something is better for a salesperson, you always have to remember WIIFM (what’s in it for me?).
Here are some initiatives managers can take to make the forecast a more collaborative and involved process:
- Conduct regular deal reviews: sit down with your salespeople and walk through their pipelines. This is in context, not just names and numbers, but also questions like why they’re considered a qualified opportunity
- Create and provide necessary resources for salespeople and ensure they are in a centralized location everyone can access
- Create an opportunity for salespeople to share best and worst practices with other team members
- Train new sales reps from the beginning how to forecast, not just how to run a pipeline report in the CRM
This isn’t about not trusting your salespeople. It’s about creating a culture of learning, accountability, and collaboration.
4. Make it Easy and Fast to Update the Forecast, But Also Mandatory
Updating opportunities in the CRM is a tedious task, and one that salespeople often resent, which leads to issues such as data integrity and accuracy, and low user adoption. For salespeople, all they want is an easier way to complete the task so their time can be focused on what’s important to them—sales.
Organizations should make it easy and mandatory for salespeople to make changes in real-time and set expectations that changes will help management improve selling conditions.
At Vortini, our mission says it all: Provide a time-saving, consistent, scalable and collaborative sales forecasting solution that allows management to successfully close every sales cycle. Together with automated forecast rollups and the Smart Suggested Forecast, we reduce the amount of time it takes to forecast by at least half. Request a demo today and see how fast and easy it is for sales teams to forecast with Vortini.
Jess is a communications professional and Vortini’s lead content/web developer. Her current interests lie in the intersection of sales technology and machine learning. In her free time she reads a book-a-week, practices yoga, and is an avid gardener.