Forecasting is the most important part of a salesperson’s job. Revenue generated by sales is the lifeblood that allows a business to grow. As a sales professional, it’s imperative that you are confident in your ability to forecast future revenue to the company. Unfortunately, some approaches taken with forecasting are not always the most successful for the business and the sales rep.
The biggest challenge I’ve seen with forecasting is the lack of focus on important milestones. For example, often a sales rep with change the probability of an opportunity closing from 10% to 20% after conducting a discovery call. They might add language to the opportunity like “their pain in XYZ” and “they’re focused on fixing this pain with a solution like ours. Next step is a demo.” Then, after the demo, the rep might further progress the opportunity from 20% to 40% because they have demoed the product and discussed pricing. This cycle continues with a proposal at the next stage, and the opportunity moves to 60% to close the forecast--that then rolls up to sales leadership.
The problem with this approach is that the focus is on the sales rep and their sales stages and not on the customer and their buying process. Just because you’ve demoed the product or discussed pricing does not mean the prospect will buy your product. The question then is, how can we, as sales professionals, ensure that as an opportunity moves through the sales stages in our CRM, we understand the likelihood
The answer lies in ensuring that the prospect is also walking us through their buying process. More specifically, is the prospect taking action for us, similar to what we are doing for them by demoing the product and talking about
When you start getting the prospect to give you critical elements to their buying journey, then your ability to forecast a deal becomes much stronger. Contrarily, if you don’t receive these elements, their absence should serve as a red flag---i.e., that this opportunity is not “real” and has no business being in your forecast.