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Why do sales managers spend so much time reviewing and analyzing sales forecasts yet sales people typically do not? Because the best way to get sales people to take forecast accuracy seriously is to train and coach them on best practices and why it is important to them. Here are three key things every sales manager must to do to boost forecast accuracy.
You do not want your sales people or internal resources wasting time on deals that will never close. Your job is to maximize everyone’s efficiency and effectiveness. To do that, you must coach each rep on how to best analyze their sales pipelines to ensure they have the best chance of making or exceeding quota.
At a minimum, each deal should be reviewed based on the rep’s understanding and validation asking these key “all about the buyer” questions (for each deal in the pipeline):
Sales Process Velocity: Based on your understanding, is this deal moving through the sales process at the same velocity of a typical sales cycle? If no, then why not? Is this deal stalling in a particular stage, and if yes, why? Do the amount of days this deal has been in the pipeline commensurate with deals that we win? Or has it languished and therefore needs to get moved from the sales pipeline and replaced with another deal that we can actually win?
Business Impact: What specific business outcomes or ROI are the executives actually buying from you? How are they being impacted by not having your product and/or service? Who have you validated this information with? And, why now?
Buyer Engagement: What is the buyer’s engagement level throughout the sales process? Are they as actively involved in getting to the desired result as you are? If no, then why not? Are you at the right level of the organization? If not, then what are your plans to move up the organization?
For each deal, make sure you have your reps answer the above questions. Then, get them to commit to next steps and a timeline, and hold them accountable to get the information needed. Sales people need to know that “gaming the system” is a losing proposition. It should be clear that analyzing pipelines is a critical element of their job and affects their performance – and their income. It is up to you, the sales manager, to communicate the importance of forecasting accuracy from their point of view and from where you stand as their manager, as well as from the perspective of your company’s executives and your potential buyers.
It’s not unusual for sales people to hold on to deals that they have devoted some much time and effort to. But things change, so you have to help them be responsive. If deals need to be removed from the pipeline, then additional deals need to be added. Be careful, though, of adding just any deals in the pipeline to inflate the numbers with little to no reality check. As a sales manager, you need to see the real picture so you can give your management accurate forecasts.
Teach your reps the best practices on how to create a quality pipeline which will improve forecast accuracy. Coach them regularly and ensure they are not resting on their laurels purely based on the numbers. Instead, make sure they spend their time on deals that have a high percentage to close. And if they do not, then encourage them to get more quality deals in their pipelines. The sooner everyone starts focusing on pipeline health, the better your forecast accuracy – and the better off everyone will be. Accountability is key!