Improve Your Forecast Accuracy – Understand How Your Customers Buy
One of the largest challenges for organizations I hear consistently focuses on the predictability of revenue generation by the sales teams. Critical business decisions around investments across the organization and if revenue targets will be achieved combine to create a great deal of pressure on how effective a sales team is at delivering reliable forecast accuracy.
After all, how can you know where you are going if you don’t know where you are right now?
Most organizations rely on information provided by their sales teams, information often provided in the form of a story or overview of the state of the account, which is often very subjective. If the organization doesn’t have a methodology in place to objectively define where their opportunities are in their customer’s buying cycle, the sales people really don’t know where they are!
To determine where they are in this cycle, the sales person needs to understand the customer’s buying cycle and sales leadership must have a binary method assessing these opportunities. The simplest solution is often the most effective and in the case of forecast accuracy, asking the right questions is key.
- Should the prospect buy?
- Will your solutions address their challenges and ultimately help achieve their business goals?
- Does the prospect see how our solution is differentiated from your competitors?
- Is there enough impact on their business, and them personally, to motivate them to make a change?
- Can the person your sales rep is speaking with make the decision themselves?
- Is the path forward clearly mapped out to make them comfortable enough to proceed with the deal?
By reviewing the opportunity objectively, in this context, the sales professional will be able to much more accurately predict if, and when, the deal will close, and determine where there are gaps in their current control of the opportunity.
Using an objective process to review opportunities is the key to forecast accuracy – Know where you are, so you know where you are going!