Guest Post by Kevin Mannion, GM North America at Datahug by CallidusCloud
Are your B2B sales forecasts tied to reality? Is sales forecast accuracy more of a pipedream within your sales organization? Does the speed of your sales pipeline resemble molasses? If you answered “yes” to any of these questions, you’re not alone.
In fact, less than half of all forecasted sales opportunities actually result in a sales win. Just under a third result in a competitive loss, and nearly a quarter result in the prospect deciding to do “nothing” (source). Needless to say, this paints a less-than-promising picture of sales forecast accuracy.
In this article, we’ll break down five actionable strategies you can put in place to speed up your sales pipeline, roll out more accurate sales forecasting, and make course corrections before it’s too late.
What is Sales Forecasting?
First off: What is sales forecasting, and why is it important?
Sales forecasting is the process of estimating your company’s future sales, whether it be for the month, year, etc. These forecasts are important because they help senior leaders make more informed decisions around hiring, their tech stack, or the need to re-assess their total addressable market.
While this process is traditionally done by looking at past performance and projecting forward, it also can be somewhat automated using sales intelligence solutions that harness large amounts of B2B data and market chatter to build powerful predictive models. This can be helpful for startups, which don’t yet have much sales history or are rapidly expanding.
Ultimately, sales forecasting allows companies to set achievable revenue goals and plan for future growth.
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How Do You Accurately Forecast Sales?
1. Ditch the weighted sales pipeline.
A weighted pipeline approach involves careful analysis of opportunity stage and making predictions about which deals will close and how much each is worth.
The trouble with weighted pipelines is that the buyer’s journey isn’t always predictable. Think about it, how often do deals stall out while your sales team chases down key decision-makers? How often do opportunities revert to an earlier location in the sales funnel or skip to the bottom quickly? For this reason, sales professionals don’t always have a clear view of their pipeline.
A better way to forecast sales is to use historical sales data and your own understanding of your company’s particular sales cycle. As a sales leader or sales operations professional, you should work with your sales team to learn more about actual sales and the tell-tale signs or indicators that a deal is likely to close. Since your reps work closely with prospects, they have valuable information that can be helpful when it comes to constructing your sales forecasting process.
2. Have reps conduct their own forecasting.
Who handles the sales forecasting in your organization? For many sales departments, sales managers are often the ones who take deal information from front-line sales reps and determine factors like deal size and close date. When sales departments operate like this, reps can feel pressured to underestimate or overestimate future sales. Since they’re not the ones coming up with the forecast, they aren’t actually accountable for forecast numbers.
So how do you get a more accurate sales forecast? A typical solution to this issue is to move sales forecasting to your front-line sales reps and empower them to do their own sales forecasting. You’ll find that your reps become more realistic about their deals.
For this strategy to work, managers may need to coach their sales reps and make minor adjustments to final numbers, but overall you should see an improvement. This process will also speed up your sales pipeline because your reps can identify upcoming gaps and make adjustments to bring in new business.
3. Measure the right sales activities.
Are your sales reps doing everything they should be when it comes to closing deals?
Sometimes a rep may look busy, but they’re failing to keep up with their peers when it comes to sales productivity. Use a data-driven sales approach to see exactly which reps are performing well and what they’re doing differently from the rest of the team.
Consider having these top reps work with other team members to bring overall performance up to speed. This will help your entire team develop and will take some pressure off top performing reps.
Take the time to look at your metrics on a regular basis. Use this data to not only improve performance but also to justify expenses, increased headcount, and other critical business decisions.
4. Simplify your sales process.
Does your organization have too many steps in your standard sales process? If so, your team may struggle to accurately forecast deals because they can’t identify where each prospect stands in the sales funnel.
If you’re not sure if your sales process is too complicated, try explaining it to someone outside the sales department. Blank stares and vague head nods indicate a potential problem. Audit your sales process and eliminate anything redundant or unclear—keeping on the essential components.
5. Use technology to enable sales managers.
Sales managers need the appropriates resources to ensure sales forecast accuracy and speed up sales pipeline. Take a look at the tools within your sales technology stack. Where is your team running into the most roadblocks and inefficiencies?
Talk with your reps and managers to see where the biggest areas of frustration are. You may be able to address it with a new policy, tool, or application.
Key Takeaways and More Accurate Sales Forecasting
Sales forecasting doesn’t have to be prone to inaccuracies. You can improve your numbers and speed up your sales pipeline using the five strategies mentioned in today’s blog post.
Contact ZoomInfo today to learn how a B2B data provider can transform your sales efforts.