CSO Insights have been tracking sales forecast accuracy for many years. Their latest 2011 Sales Performance Optimisation study - which collated the experiences of more than 2,000 B2B sales organisations - found that fewer than half of forecasted deals were closing as predicted.
Average sales forecast accuracy is now less reliable than flipping a coin and hoping to get the right answer. There's little sign of improvement. The impact on both the top and bottom lines is striking - and will be career-changing for some. Executives, boards and investors simply cannot afford the uncertain performance that is associated with poor sales forecast accuracy.
It’s a big problem for many companies. It’s not helped by the growing number of sales opportunities that end in a decision to “do nothing” - a decision which might have been predictable far earlier with better sales qualification. And deals that were inexplicably delayed might have moved forward more quickly if the sales person concerned had been better at creating urgency.
Inevitably, best-in-class organisations to do better. CSO Insights found that companies with well-defined dynamic sales processes out-performed their peers by 25% or more. The quality of sales pipeline management is another key factor. Managers who insist on evidence of buyer commitment when positioning prospects in pipelines do far better than those who rely on sales activity alone.
We work with our clients to help them build better foundations for their sales forecasting process. We help them reflect the key phases and milestones in their prospect's buying decision process into their sales stage definitions. We help them take account of sales velocity when predicting the outcome of deals - and make sure that their CRM implementation reflects what is really going on in the sales process.
Take the Next Step
We would be pleased to share what we’ve learned about helping high-growth-potential organisations to improve sales forecast accuracy as part of a balanced programme of sales and marketing performance improvement. As a first step, you may find it useful to self-audit your current sales and marketing processes.
As soon as you are ready to learn more, please email us at forecast@inflexion-point.com, or call us on +44 (0) 118 975 0595. We look forward to discovering whether we might be able to help your organisation to improve its performance in this critical area.