Sales forecasting

The Key To Accurate Forecasting Is Process Alignment

Many in sales do an excellent job [not] of educating their customers about how to secure the lowest price and maximum commercial concessions. They do this by offering special pricing with hollow threats of taking the discount away after the end of month or end of quarter has ticked-over. This behavior simply trains prospects to take suppliers to the wire to extract concessions every time a major deal is on the table.

It is usually unproductive and damaging to seek to unnaturally force the pace of business. Never assume that price or other incentives will change the customer’s timing. Failure to fully understand the buying organization’s processes automatically introduces serious risk and makes it almost impossible to forecast accurately. Instead, sell on value and understand the customer’s timing and process for selection, negotiation, and procurement. Align with the customer rather than pressure them.

Are you actually aligned to your customer’s timing, decision drivers and processes for selection and procurement? The best approach is to understand the date that they need a solution implemented and then validate their commitment by asking what happens if the date slips or status quo prevails. Once you are certain the client is committed to a date for realizing benefits, identify everything that needs to occur to achieve the implementation deadline. Working backwards from this date, go through the list and create a time-line with critical dates for all milestones and identify the interdependencies. Now you have a realistic date for when a purchase order needs to be issued or contract executed. Align to this timeframe rather than your own end of month, quarter or financial year.

Work with your customer to understand and manage the risks, including whether they need to submit a business case or work through a convoluted process for approval and funding. They may need to adhere to an onerous procurement process. There may be critical reviews with steering committees, and there may be approvals required from senior management or at board level. There may also be tension with other projects or initiatives. When full understanding of all these things has been achieved, in partnership with your customer, then you are able to work with them to keep everything on track and adjust your strategy and forecast date accordingly.

Every business decision has a natural pace at which the selection and buying process needs to be fulfilled. Wise sales people ensure they have full understanding before forecasting when business will close. This means there are rarely surprises, just points of risk that can be managed with the customer. They avoid pressuring the buyer or creating unnecessary tension. Instead they build a close plan but call it a Project Alignment Plan with the customer. Consider these questions when thinking about the customer’s process:

  • What happens if they do nothing and defer the decision?

  • Is there a compelling event or a very strong driver for buying?

  • Are there external events that may impact the decision or timing?

  • What are all the points of risk in securing a positive decision?

  • What is the timeframe for delivery of outcomes with milestones?

  • Concerning the selection criteria and weighting of various factors:

    • Which features and functionality matters most to the buyer?

    • What are the technical issues that need to be considered?

    • Where do they perceive the risks in the project or initiative?

    • How important is brand and size in considering risk?

    • How important is experience and industry specialization?

    • How is commercial & product risk assessed and weighted?

    • What role will demonstrations and references play?

  • What is the required Return on Investment or payback period?

  • Are they more focused on price or value?

  • What are the preferences of the influencers and decision makers?

  • What is their approval process and who must sign-off?

  • Who can say ‘no’? Who has to say ‘yes’? Who has power of veto?

  • What is the process for handling negotiations?

  • If a contract is required, whose paper and can it be reviewed early?

  • How is a purchase order generated or contract signed once the decision is made?

If you valued this article, please hit the ‘like' and ‘share’ buttons below. This article was originally published in LinkedIn here where you can comment. Also follow the award winning LinkedIn blog here or visit Tony’s leadership blog at his keynote speaker website:

Main Image Photo by Flickr: MattysFlicks

Sales Forecasting To Within 1% Amidst Massive Complexity

This is not a theory... it just happened in one of the biggest and most complex companies on the planet... and the forecasting process has gone from a week to seconds.

During my corporate career, and more recently through my consulting clients, I've been on the inside of the sales automation and Customer Relationship Management (CRM) industry. CRM has always promised game-changing levels of efficiency and effectiveness yet so many companies who buy it just implement expensive contact databases and manage-up pipeline reporting tools.

Recently I've been engaged by Salesforce to speak at their upcoming World Tour Conference (topic: The rise of the silent sales floor is killing business) and also provide coaching with their sales teams. The experience has opened my eyes. It's rare to see a technology company drink their own campaign; usually it's a case of 'the builder's house never being finished'. But what I've seen with salesforce and some of their customers is breath-taking.

Nearly two decades of evolution has now been infused with artificial intelligence (AI) algorithms to transform CRM as we know it. We have reached the tipping point where sales and marketing convergence is being powered by mature salesbots and Salesforce's Einstein is leading the way. Watch this one minute video...

A salesbot doing sales management and deal coaching... wow! But what if Einstein could also manage the single biggest problem in any sales operation... the forecast? I'm under NDA so I cannot reveal the name of the large enterprise who just piloted Einstein for forecasting but I can reveal the astonishing result. A quarterly global forecast was run with traditional means (CRM reports and data sucked into Excel, then massaged by layers of management and pushed up the line from dozens of countries to the senior executive to provide regional forecasts with 'commit' and 'best case'. Then a global number was rolled-up to the senior executive and board.

But in parallel, Einstein ran a forecast algorithm based upon myriad of factors that show probability of close based upon predictive scores assessing key win factors including whether key information has been obtained, if the right people have been covered, whether the amount of time in a particular deal stage has increased slippage risk, if frequency of deal updates is on track, whether number of calls made and received along with emails sent and received shows proof of active engagement, etc. All of this matters because the level of timely buyer/seller interaction absolutely determines the probability of winning a deal and the likelihood of closing on time. Michael Bonner calls this auto-generated score in his own salesforce add-on, Pipeline Manager,"proof of life."

Unlike a human sales manager, Einstein does not have 'happy ears', hope or fear. Nor does it seek to 'manage-up' ... it just tells you the truth and does not care what you think

So.. what was the result of man versus machine, of CRM extracts into Excel and layers of managers who massage and hedge versus the forecasting salesbot? Note that there were dozens of countries, thousands of sales people and massively complex products and services.

Humans +/- 20% (took a week and the data supporting the numbers was out of date when the report was tabled)
Einstein AI +/- 1% (took seconds, real-time)

Accurate data is the foundation on which accurate forecasting depends. Traditional approaches where people are 'held to account' for their number and told they will live or die based on their commit, drives either prayerful hope at one extreme and sand-bagging at the other. Having your feet in a freezer and your head in the oven does not mean that, on average, you'll be at the right temperature.

So often the business case for buying CRM is to improve forecast accuracy but the underlying data usually remains untrustworthy unless CRM actually enables sales process. If you want accurate forecasting it starts with CRM being an indispensable part of every salesperson's day. It must be where they receive their leads, how they make their calls, where they send their email from, where they create quotes and obtain approvals, etc.

CRM success is completely dependent on the leadership's commitment to transforming the way the business markets and sells, enables the sales process, and becomes the engine for delivering brilliant seller and customer 'sales experience'.

Successful sales transformation is available for those willing to invest and lead from the front with executive commitment to a customer-centric culture. The best focus on an integrated suite to manage the entire customer lifecycle with cloud platforms for marketing, lead nurturing, sales process automation, community portals and service/support for ticketing, complaints, etc.

CRM has come a long way since the days of silo databases and clunky interfaces on a PC. Game changing improvements have been achieved with workflow for process automation, integration to price books, configuration and quoting tools, content marketing with web-to-lead processes, lead nurturing programs, tailored dashboards and reports, forecasting and integrated qualification and opportunity management methodologies, close planners, organizational charts that also map the decision power-base. Add to this; quote-to-cash, customer lifecycle management with marketing, sales, service and support all being integrated. More recently, integration to social listening and pipeline creation platforms such as LinkedIn, along with widgets to sales productivity tools such as Lusha... you get my point.

Any corporate sales team that is not fully embracing sales and marketing automation is in the process of failing by design. AI is taking sales to a whole new level

In my opinion, Salesforce is its own best reference customer. They run and incredible sales and marketing machine, and they blend technology and the phone along with inside sales and the field very effectively. Leads are followed-up professionally and in a timely manner (I receive calls from their reps the same day I download any of the reports or white papers on their website), metrics are captured and managed, leads are nurtured intelligently with seamless marketing/sales team collaboration, and they provide free high-value content in the form of web collateral and high-quality events.

If you valued this article, please hit the ‘like' and ‘share’ buttons below. This article was originally published in LinkedIn here where you can comment. Also follow the award winning LinkedIn blog here or visit Tony’s leadership blog at his keynote speaker website:

Main Image: Google: Salesforce - World Tour Paris