A sales forecast is only as good as the processes and data that support it.
In its 2018 Sales Operations Optimization Study, CSO Insights found that companies with a formal, structured forecasting review process increased their win rates of forecast deals by 25%, compared to organizations that did not. The more rigorous the process and the more accurate the data, the better the forecast, and the better you’ll know what’s coming down the pike for your sales organization.
If you’re struggling with forecasting at your company, you’re not alone: More than half of the deals that sales organizations forecast to win don’t and in the 2019 World-Class Sales Practices Study, CSO Insights found that only 33% of sales organizations formalized their approach to forecasting. But if you’re ready to increase your forecasted win rates by 25%, take these three steps.
1. Define Your Forecast Review Cadence
A common problem in many organizations is that sales teams review forecasts sporadically, if at all. If and when they review them, they may not look at the right information: it might be outdated or duplicative, especially if they aren’t asking their sales force to regularly update their CRM with the status of their deals and the actions they’re taking to move them forward.
When you set a schedule for forecast review meetings—weekly, monthly and quarterly—you create a rhythm that can help formalize your process. Don’t forget to set an agenda, objectives and attendance expectations for each meeting so attendees better understand why they should participate. Keep in mind that establishing a cadence of well-structured, informative meetings can reinforce the importance of sales reps entering thorough, timely sales reporting data into the CRM, further enhancing the accuracy of your forecasts.
2. Use Technology and Data to Enhance Your Forecasts
Too many sales forecasts look backward rather than forward: they rely on historical data to create a future outlook. When combined with the overly optimistic subjective data that salespeople typically enter into CRM about unqualified opportunities (to avoid their managers chastising them for low sales volume), it’s no wonder that forecasts aren’t as accurate as they could be.
Accurate sales forecasts are built on predictive data. Today’s algorithms can now study a variety of data points to assess the health of a sales opportunity; they use data analytics to create informative sales models and meaningful measurements.
Dig into your data sources and evaluate how you can ensure your CRM captures the best data and use a tool to derive the most value from that data. One tool to consider is Scout, which combines proven sales methodologies with powerful analytics-driven sales technology. With Scout, sales leaders can gather real-time insights into sales opportunities and decide which buyers to pursue—and when and how to pursue them.
3. Create a Sales Enablement Plan
Reinforce the first two steps by working with your sales enablement team to develop a formal enablement plan that trains your sellers on how to use technology to make sure your data is updated and healthy as well as how to prepare the new cadence of formal forecast reviews. This gives sellers clear structure around the process, the technology they need to use and the schedule they need to follow, making it a repeatable behavior rather than an initiative. Enablement is not merely for frontline sellers, either. When you take the additional step of equipping sales managers with sales funnel coaching skills, you reinforce the sales enablement skills and behaviors that keep opportunities moving forward.
Take Your Forecasting to the Next Level
An accurate sales forecast is a science as well as an art. But it doesn’t have to be complicated: the simpler you make your forecasting process, the easier it will be for your sales team to master. By creating a forecast cadence, using technology and developing a sales enablement plan to execute your new structure, you can build a straightforward, yet effective, forecasting process that allows your sales force to accurately judge the deals in their pipeline and improve predictive models.
To learn more about how your sales organization can improve its forecasting strategy and see how it stacks up against all of the 12 top sales practices, take the Sales Performance Meter.