You’re just about to wrap up the first quarter of the year. The CEO wants to see you in his office. Before you even sit down, he asks, “What are the results going to be?”


If you’re going to hit the number, he makes light conversation and congratulates you. If you’re going to miss, he asks, “Why?”


The Big Question 

The CEO wants to see if you can accurately assess the problem within your department. However, many Sales VPs fall back on one of the standard excuses:


  • We lost the big opportunity we thought we’d win.
  • Some of our deals pushed into the next quarter.
  • Our sales people don’t have the talent or training to sell the product.
  • Our product/price wasn’t competitive.
  • We didn’t get enough leads.


Providing one of these responses and a couple of examples is the wrong approach. CEOs don’t like vague generalizations. They are data and numbers driven.  So what tools do you have at your disposal to help make your case?


One of the most overlooked tools within the Sales Organization is the CRM system. Built correctly, a CRM system provides clarity and visibility within the entire department. Built incorrectly, you have an expensive spreadsheet or rolodex. 


Here are the four crucial components:


  1. Pipeline Accuracy and Forecasting
  2. Sales Process Adherence and Opportunity Review
  3. Lead Management (Marketing and Sales Generated)
  4. Sales and Marketing Content and Usage Metrics


Let’s take a look at the first one, pipeline accuracy and forecasting.


For many organizations the biggest reason for purchasing a CRM system is forecasting. In fact, some use CRM solely as a pipeline tool to provide revenue visibility to management. However, many firms still struggle with accurately predicting revenue despite this feature. Some even return to spreadsheets in frustration.


If you’re struggling with predicting pipeline, ask yourself these questions:


Are my sales stages based on the customer driven behaviors and exit criteria?

If your Sales Stages are solely based on rep intuition, you have a problem.  Sales stages must be customer driven.  What does this mean? Sales Rep activity and “feeling” do not determine stage.  Only buyer behavior does.  Find clear indications that a buyer is willing to progress in the Sales Process.  This is usually an action or clear agreement.  Only then can they move to the next stage in the Sales Process.


Are my percentages based on historical close rates, or are they out of the box?

Many Sales Leaders fail to adjust the percentages within the CRM once they purchase. They accept the provided Sales Stage percentages as fact. Don’t. Different industries have different advance rates.  If you’re not updating stage advance rates based on historical opportunities, you’re just guessing.


Are you incorporating additional information Into the close rate?

The best CRM Forecasts don’t rely on Stage alone. They also incorporate answers on a forecasting form.  Let’s say a prospect is at the “Evaluation” stage.   This is where a traditional demo occurs.  Is this client a referral or somebody who submitted an RFP?  Is there a compelling reason WHY they are looking for a new solution?  Are you the sole vendor in the opportunity?  All of the answers would have a dramatic impact on your chances of closing.


Having an optimized CRM system will result in better conversations with your CEO.  Instead of vague, generic answers, you can give credible answers like the ones below.


Some of our deals pushed into the next quarter: While the customer seemed excited, we realized there was no compelling event driving them to purchase.  Also, our highest contact within the account needed approval on budget.  Based on historical rates, this changed our forecasts. We moved the opportunity out 2 months and reduced the closing percentage by 17%.  We focused on more urgent opportunities.


Our Sales People don’t have talent/training to sell the product:  We noticed several reps had a lower advance rate (41% vs a 64% group avg) in the Uncover Needs stage.  We provided additional training based on the data. They significantly improved in stage performance.


It’s never easy to have this conversation with CEO when you’re going to miss the number.  But the only thing worse is an insufficient explanation.


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