Bad Sales Forecasting Math

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Likewise, if you sandbagged and way over delivered, there were penalties. The objective was truth and accuracy because this is the only path to trust and peace of mind.

It was a line in the sand that was respected.

What I loved most about these leaders was their belief that with the truth on the table up front, the future can be changed.

If you came in with a forecast that was below quota or budget, rather than beating you up, they’d sit down with you and build a plan for changing the future.

This was a whole lot easier at the beginning of the quarter than getting surprised at the end of the quarter (see Dan) and scrambling through a fire drill in a fruitless attempt to hit a flawed forecast.

Predictable Sales Pipeline Forecasting is a Mix of Math and Art
Let’s dispense with any pretext that there is any formula that will deliver a perfect forecast every time because, there is not. No matter how dialed in you are, sometimes you’ll miss and sometimes you’ll over perform.

Therefore the goal isn’t perfection. Instead, it is narrowing the variability of your forecast which, improves predictability.

As I discussed in my book Sales EQ, the vast spain telegram data majority of sales organizations derive their forecast from pipeline opportunity stage. These organizations have applied a percentage to each stage and use that percentage multiplied by the projected revenue of the deal to create a forecast.

For example: If a $10,000 opportunity is in the “Discovery” phase which has been determined to be 30% to closed/won in the CRM, then the forecast for that deal, at that point in time, is $3,000.

Sales organizations choose this flawed methodology because it is easy.

It requires no critical thinking and no courage on the part of sales leaders to dive into the pipeline and hold people accountable. Just plug the stages and percentages into the CRM and voilà, you have a sales pipeline forecast on the dashboard.