Many CEO’s today lack confidence in their sales leaders to produce an accurate forecast. They have learned to apply algorithms to de-risk the number. This is a roller coaster ride that happens quarter after quarter of inconsistent forecasts. This problem has ended the legacy of many sales leaders. Your forecast does not have to be a crap shoot! In this post, we first identify the inhibitors of change. Then we explore the “how to” of pipeline / forecast accuracy.
Let’s first review the signs of “constraint-based thinking”. Once we overcome these we then can implement an effective plan. The responses below are examples of these types of constraint-based thinking:
- Tenure: “This process seems elementary and I have a group of tenured sales leaders”. A high level of experience does not equate to a high level of performance. Successful reps are willing to invest in their development by learning new things.
- Cadence: “We have weekly calls on this topic”. Sales is part science and art. There is a difference between executing an activity and executing an activity well.
- Quantity vs. Quality: “3 X is more than enough to meet our goal”. In this case a leader should back into pipeline size based on win rate. Falling in love with a metric is dangerous especially when that metric is dynamic.
- Sales Process: “We have a sales process in place”. This is a great first step, but it’s worth is only as good as its usage. My experience is most sales processes become shelf-ware due to a lack of coaching.
Revenue predictability is the perfect marriage between pipeline management (process) and execution (talent). Doing this effectively is the ability to orchestrate sequential steps. Below is a 7- step process that will help get you on the right track:
- Button up your sales process- You need a gating process or “exit strategy”. This will drive clarity to your sales organization for opportunity advancement.
- Separate pipeline and forecast calls- Think depth vs. breadth here. Complete pipeline reviews every other week and forecast weekly. Don’t mix these tow very different topics.
- Have a cadence- Informal or prolonged reviews make it impossible to have a pulse on the business. This is like driving your car down the highway blind folded.
- Cascade the process down to the field- Each territory is a unique business and therefore each rep is an owner. Accountability should fall squarely on the territory owner.
- Train everyone on the process- The size of your team might be dictating the varying degrees of pipeline interpretation. A key element here is to ensure you have proper adoption and implementation.
- Coach to the process- This will help quickly identify if your process needs further tweaking. As you adjust you should see the impact in your forecast accuracy.
- Track and measure- You are what you measure. Look at metrics beyond the basics of ASP, Sales Velocity and Win Rate. Dig further into stage regression, deal age by stage, stage entry, etc.
As a sales leader it is your job to create a predictive sales organization. Pipeline / forecast managing can be the value creating engine for any organization. Remove the guessing game from your approach. Replace with a “deliberate” set of processes to drive standardization. In the end you will have created a healthy organization and career trajectory. To help prepare for your Forecast call by helping you identify gaps, risks, and other areas of opportunity download the Pipeline Call Checklist.
- Understand how to grow revenue through sales optimization
- Determine whether they’ve developed a prospecting methodology specific to their target customers and prospects
- Facilitate discussions with the Executive Leadership team on the value of building a custom, one-of-a-kind sales methodology that gives them an advantage over the competition