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Predictable Outcomes are Key to Sales Success

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predictive forecasting
As a CEO or VP of Sales, you are dependent on the predictive forecasting of Sales & Revenue to make informed commitments and decisions. Experience has shown you that the chances of those forecasts crystallizing to actual closed sales are spotty.

CEOs that we have spoken to, say that they could often have to work with less than 60% accuracy and it can vary wildly from quarter to quarter. It begs the question, “how can companies get close to 85 to 95% reliability in their sales & revenue forecasts with more predictable cycles?”

Sales and revenue forecasts are the most hotly debated topics within a company as it has major implications across the business. They impact the labor force, capital expenditure, investment plans and other aspects of running a business. Depending on the situation, missed or incorrect forecasts can result in people losing their jobs, share values collapsing and R&D budgets being put on hold. Improved predictability in forecasts can help businesses plan better and ward off competitive pressures more effectively.

In a recent study of sales forecasting capabilities, respondents stated that forecast results can vary between 30-80% of the actual figure presented in their reporting. This variation was attributed to various causes such as unpredictable market conditions, disruptive new technologies and the like. One never stopped to ask if the forecasts were being made with adequate information in the first place.

Ambition can trump reason when sales teams are reporting their forecasts with deals that scarcely have a chance of being closed making their way into the forecast. Some may be adding deals as they are under pressure to fill the pipeline.

The forecast has contextual input from other activities within the sales organization and outside. It is best to streamline these channels by applying a standardized Sales Process for Forecasting that is machine enabled and optimized. Using the right process complemented by modern tools can create a sea change in the predictability of Sales Forecasting. Forecasting accuracies of close to 85% is not unheard of.

We are often asked by non-salespeople “Can you get 100% accuracy on a sales forecast?” and the answer is, unfortunately, no. Forecasts are only as good as the information used to create it, both objective and subjective. It is not too different from weather forecasts where none can guarantee 100% accuracy. Getting to the high 80s can be done by using the right processes, the right tools, and the right information.

At ForecastEra, we believe in triangulating the forecasts using multiple lenses and that there are five key parameters that a sales organization should establish:

Manager Review Cadence: Clearly defined and consistently applied (monitored) sales reviews where Managers review deals and assess if required milestones have been met. Managers need to compare changes from the prior forecast and must understand exact reasons for changes in the forecast from prior commitments.

Past Forecast Accuracy Scores: Understanding the past trends of Forecast Accuracy by Sales Rep and applying the right management judge to forecasts becomes a crucial factor in arriving at the right forecasts.

Predictive Close Dates:  Based on historical data, having the ability to predict close dates based on the characteristics of a deal, gives a huge advantage to managers and Sales leaders to question the validity of the committed close dates by Sales Reps.

Quota Achievement History: Quota achievement history for a Sales Rep is another good indicator to understand the ability of the Sales person to meet their forecasts

What-If Scenario Planning:  Developing a range of outcomes from best to worse case scenario by applying different weights to the pipeline based on historical data can help Sales leaders arrive at a range of values for the forecast.

If you look closely, there’s a thread running through these five key elements: consistent application, clear definitions, modern technology, personal accountability and continuous feedback.

Getting there is not difficult but will need discipline, strong senior management support, change management and an open mind. It would be well worth it. That increase in forecast accuracy could make a world of difference.

Storytelling with Data and Sales Analytics

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We hear stories every single day. We have heard them our whole lives. Starting with bedtime stories when we were younger, to our favorite movies, to stories swapped among friends, some stories stick with us because they were told well. The players and scenarios came alive. The tension in the story felt real. And, in the end, the story left us more aware and affected than if the facts were laid before us plainly.

Humans are complex and emotional creatures. We’re hardwired to love stories because they help us relate to other people, ideas, and situations. Studies show that hearing a good narrative prompts the body to release oxytocin, the “cuddle hormone,” which makes us feel instantly happier and more connected to those around us. When we release oxytocin, we become more empathetic, cooperative and drop our inhibitions.

Oxytocin isn’t the only chemical at work when we hear stories. Adrenaline and cortisol are released when faced with stress or tension in the story and they cause us to be more alert and focused.

So it’s no wonder that good storytelling can improve your brand’s credibility. When sharing what you do and why you do it, your consumers, clients, and partners are more likely to buy in emotionally and financially if they are engaged with a story.

So, let’s say you work with data. Data does not obviously lend itself to good storytelling. Sales figures, forecasts, projections, and conversion rates – these are figures are critical to business, but it’s hard to make them come alive in a compelling way, especially for those unfamiliar with the data.

But just like everything else in life, your data tells a story. And we can help you discover and share the narrative. Our products help you visualize data in pipelines and understand the factors at play with every single opportunity. It can provide the full picture of the beginning, middle, and end of an opportunity’s lifecycle so that your rep can act accordingly.

Not only will ForecastEra help you understand your own story, it can help you share it with others. When sales reps use hard numbers and trends to back up their pitches, their message is more clear, visually engaging, and credible. Providing a narrative to accompany complex figures is a way to distil important data into something meaningful for the consumer.

Storytelling is not only the best way to win over a customer, it might be the only way. Get in touch with us today about how we can help you tell your story – http://www.forecastera.com

 

Only 50% of Forecasted Deals Close? Can Predictive Forecasting solve this?

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predictive forecasting

Last year CSO Insights found that only about half of forecasted deals are ever closed by reps. That’s a startling number. We can’t think of any other field in which a half-done job is acceptable. What causes this glaring disconnect between expectations and actuals?

It’s true that sales reps know their deals better than anyone else. They have cultivated the relationships and skills it takes to sell. But they might not have insights into what is keeping them from closing.

The key reason that forecasted deals are closed so infrequently should do with the process by which the forecasts are made.

Manual forecasting can be messy. It has proven time and time again to be inaccurate. For decades, companies have put the burden of forecasting on their sales reps, making them half-sales and half-data jockeys. Without the tools to forecast effectively, they often spend too much of their time entering data and not enough time selling. Your reps are most likely not mathematicians, and crunching numbers to forecast short-term revenue goals eventually sets them up to fail.

Predictive analytics are just that: predictive. Human prediction is often based on assumptions and bias, or, worst of all, pure conjecture. Forecast Era’s predictive forecasting is founded in real-time data and cutting edge analysis to give your sales reps a realistic framework by which they can set, adjust, and achieve their goals.

The proof is in the numbers. Reps that work with data-driven, automated forecasts are 30% more productive. Not only are reps freed from the process of creating these forecasts, they have an opportunity to work with objective data. This data gives reps the chance to prioritize deals, close gaps, and plan ahead with science rather than sentiment.

Your sales reps are the experts. And giving them the opportunity to work with predictive forecasting will give them the edge they need to give them the best in class.

There aren’t many people who can predict what’s coming in the new year, but we can help you and your sales team be among them. As you start your new year, commit to working from smarter forecasts. Start here. 

Leverage CRM to Power Your Revenue Forecasts

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increase revenue with revenue forecasts
You’d be amazed how many companies only use their Customer Relationship Management (CRM) tool to look at sales leads and closings. It seldom occurs to them–or they don’t know how– to leverage their platform to inform revenue forecasts. If this sounds familiar, and you’re only using your CRM as a glorified Rolodex, you’re missing out.

It’s time to realize the serious value in putting your CRM to work for forecasting your revenues.

Make CRM your one source of truth

Often Sales and account reps have to enter data into multiple systems, resulting in duplication and wasted energy. Often still Sales sets the cadence for arriving at the quarterly bookings forecast, then Finance runs a different cadence for revenue forecasts. If these are not converged, then you are likely to misrepresent one of the forecasts leading to the oft-experienced pain of missing revenue forecasts.

Arming your organization with a single system for all of their sales CRM is a no brainer., but giving them a system with added automated forecasting capabilities is a winner.

Everyone Plays from the Same Sheet of Music

CRM isn’t just for your Sales. Employ it across your entire organization as your one source of truth: the central hub of all of your sales and revenue data. Doing so increases accountability, visibility and ensures that information is always current for all users. Disciplined use across the company ensures team members work with tightly integrated, real-time analytics, across departments and responsibilities.

Turn Data into insights for building authentic revenue forecasts

Your CRM is chock full of amazing data just waiting to be converted to consumable information, If you can visualize and evaluate your data in real time, you’ll have a strategic advantage in the marketplace. You can quickly respond to competitive pressures and protect your turf that much better. With insights into where you are in the sales cycle, you can come up with a realistic portrayal of your revenue stream from your pipeline. When insights point you to areas of possible improvement to meet your forecasts, you can quickly seize the initiative to close these gaps.

ForecastEra, with its real-time, goal oriented analytics supplemented by predictive insights help you arrive at the right revenue forecast, ensuring that you are not leaving money on the table.

Evaluate Opportunities towards maximizing predictability of Forecasted Revenue

One of the most important aspects of revenue forecasts from your pipeline is understanding your opportunities and their behavior. This will allow you to focus on pursuing the right opportunity and optimizing the time to close a deal. It will also allow you to look at your funnel and forecast your revenue generation in real time, given the attention that you are lavishing on the deals most likely to close.

At ForecastEra, we believe that your CRM provides your organization with incredibly relevant and real-time information to effect a personalized and effective sales strategy. A fully optimized CRM with added functionality from ForecastEra doesn’t just give you predictions of your revenue, it also allows you to measure the activities and responsibility of your team. If your users properly leverage your CRM data, the entire organization will be more productive and profitable.

Find out more about how we can help you leverage your CRM to increase your company’s forecasting capabilities: http://www.forecastera.com

Are you a Quomodocuncuzie!

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Quomodoconquize, pronounced as Quo-Mo-Do-Cunquz is a word seldom used that aptly verbalizes the “ make money in whatever way you can” approach.

At Forecastera, we look askance at this type of thing. We want you to be successful the right way.

Now there are many questions …

Sales Person:
Will I make my Bonus?
How do I prioritize my deals?

Sales Leader:
Will I miss my Forecast?
Is it too late to make up lost sales?
Is my team productive?

Sales Ops:
Can I automate my Forecast roll up?
Take me out of the spreadsheet hell!
Can I drive transparency and accountability into Forecast Process?
Can I provide early warning signals?
How can I improve accuracy and timeliness of Forecasts?
How do I provide more analytics to Management?

ForecastEra has answers to all these and more. See how you can hit your targets Everytime!

Stop by our booth #2059 at Dreamforce to find out more…

DON’T LET BAD FORECASTS RUIN YOUR STOCK

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Tableau’s stock was down over 54% with over $2B in market cap erosion over two trading sessions after announcing results. LinkedIn suffered a similar loss with over $10B erosion in market cap erosion a day after announcing their latest results. This fall was mainly attributable to lower than expected guidance. Bad guidance can spell doomsday for a stock which leads to a fundamental question about a company’s long term forecasting process. If a company has built a robust long term forecasting system, they should be able to see early signs of weakness in revenue and put mitigation strategies to increase revenues or reduce costs. Guidance and messaging to the markets can be tuned if companies have visibility into such long term forecasts.

This brings us to the fundamental issue of companies not having intelligent systems and tools to get clear visibility into the future. Most companies focus on short term forecasts for the immediate quarter and have some insight into out quarters for the current fiscal year. Their view beyond the current fiscal year is very limited and this can blindside many companies into realizing they have a big hole to cover when they get to the end of their fiscal year