Are you able to track the accuracy of the forecasts generated at each level of your sales organisation? Do you have an active programme in place to diagnose and deal with persistent over and under forecasts? Do you know how your forecast accuracy compares to the best in class?
According to CSO Insights' latest research (Sales Performance Optimization - 2009 Survey Results and Analysis), on average less than 50% of forecasted deals close as predicted. As they point out, most companies' ability to accurately forecast the outcome of deals is no better than they could achieve from flipping a coin. And the trend has been getting steadily worse.
A career-changing challenge...
The impact of forecasting failures on both the top and bottom lines is striking - and may be career-changing for some. Executives, boards and investors simply cannot afford the uncertain performance that is associated with poor sales forecast accuracy.
But there is light at the end of the tunnel. Inevitably, best-in-class organisations can do better. CSO Insights found that companies that have implemented proactive, dynamic sales processes consistently out-perform their peers by 25% or more.
An evidence-based alternative...
The quality of sales pipeline management is a 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 strongly recommend that our clients manage their pipelines - and generate their sales forecasts - using a combination of fact (the stage a prospect can be proven to have reached in their buying process) and judgement (a rational analysis of the chances of winning any deal in the current period).
Avoiding unnatural acts...
Checkpoints must also be established to prevent unnatural acts being forecast - for example expecting a deal to close when a compelling need has not yet been acknowledged, or where the speed through stages required would be some unfeasible multiple of normally observed behaviour.
In forecasting, as in so many other aspects of the sales process, "hope is not a strategy".
Our approach...
We will help you implement an evidence-based approach to sales pipeline management, drawing upon both observed fact and rational judgement to come up with an accurate and achievable forecast. We'll help you identify and filter out forecasted deals that rely on unnatural acts.
We'll help you monitor and measure performance against plan, and help you diagnose and deal with the root causes of persistent under forecasting. But we won't diminish the value of sales heroics - simply help you create an environment where they lead to over-performance rather than squeaking over the line at the last minute.
If past experience is anything to go by, these insights could enable you to significantly improve your forecast accuracy - why not give us the chance to prove it?
Here's how we might be able to help...
Achieving sales and marketing alignment is particularly important to any organisation that is trying to achieve a step-function improvement in marketing effectiveness or sales productivity, to out-perform strong competitors, or to successfully launch new products or enter new markets.
We've been able to help a growing number of B2B organisations to realise their ambitions by diagnosing and dealing with the constraints that have been holding them back. We may be able to help your company achieve the same. You can learn more about our approach by browsing this website.
When you are ready, please complete our contact form, drop us a line at info@inflexion-point.com or call us on +44 (0) 845 519 0295.
We look forward to finding out more about what you are trying to achieve, to sharing some ideas - and to helping you achieve the benefits of alignment throughout your sales and marketing organisation.