WORKWEEK

I remember being a seller and at first seeing a forecast meeting as that annoying meeting every Monday where I have to roll my numbers up to the business. Once my Manager took the time to educate me around its importance, not only for me as a seller but for the business, everything quickly clicked.

An accurate forecast is the backbone of any revenue generating team. It enables the business to make informed decisions about growth projections, investments, and it influences how our stakeholders perceive the company’s health. A reliable forecast allows us to plan for the future, getting ahead of risks, mitigating potential gaps in revenue, and understanding the overall performance of the business. That’s why I believe it’s one of the most critical components in the lives of sales leaders, business stakeholders, and sales reps alike.

As much as elements of this may feel like stating the obvious, it is important for us to be on the same page around what actually underpins a forecast, which sets us up nicely to dive into how to actually run one effectively.

The Forecasting Formula

An effective forecast meeting should be built on a few core principles:

1. Start with the largest deals: This encourages your team to focus on whale hunting aka finding transformative deals, with the knowledge that they will get more visibility and resource allocation. 

2. Run a tight ship: Ensure that reps update their notes and next steps with specificity, including stakeholders, dates for next steps, alongside potential deal risks and threats. Setting clear expectations for what you expect in terms of CRM hygiene helps to maintain better data integrity, which is becoming increasingly important with the rise of tooling that is only as good as the data it is being fed.

3. Use a common language: Whatever sales framework, qualification methodologies or otherwise you use internally, ensure you drive the forecast leveraging that same common approach. This encourages reps to unpack their deals using unified criteria and allows for more predictability when driving the meeting. It also allows for a more efficient forecast when reps are clear and comfortable around expectations.

From Hunches to Hard Data

When I think back to the early days of my sales career, I recall relying heavily on gut feel for each of my deals. I would ask myself whether I felt it had a strong opportunity to close or not, without thinking through key considerations such as deal momentum. As time went on, I learned that striking the right balance between leading with data and informed instinct is essential for an accurate forecast. 

Consider the experience level of your sales team and determine how much you can rely on their input. Newer reps may have gaps in their understanding of deal risks, while more experienced reps are expected to deliver more informed and considered forecasts based on both data and experience. 

In a scenario where you have an early in career sales team, you need to have a heightened focus on encouraging their use of data and math to get to an accurate Commit number. This should include looking at past data around time to close and average deal value alongside leading indicators such as in quarter pipeline generated.

With more experienced reps, you can likely count on a level of their deal subjectivity. For example, they may simply share with you that they believe the deal will close based on a number of factors that don’t necessarily meet the pre-defined criteria you would expect. Although, that same seller may be a proven performer who has demonstrated consistency over an extended period of time, thus giving you an added level of confidence than you would expect from an early stage rep in the same scenario.

Leading with data entails leveraging it to make informed decisions. In the coming weeks, I’ll share more insights on how to harness data-driven tools to drive better forecasts and empower your team.