The 5 Major Benefits of Making Salespeople Responsible for Their Own Forecast
What would happen if you asked your sales team about their own sales forecast? Would they look to their manager, pick a number out of the sky, or tell you they are “too busy selling” to worry about the forecast?
None of these answers are satisfactory.
When you put reps in charge of their forecast, you’re not leaving it up to the manager or a system. You’re getting each sales rep to commit regularly to a number they believe they will close by the end of the quarter and making them accountable to that. Here are five benefits you gain from creating a structured forecasting regime and putting salespeople in charge of their own forecast.
You Are Forecasting on Real Deals
When you ask your sales reps to come up with their own forecast, the numbers they report will come from real deals with momentum, rather than a percentage or guess based on all of the deals that are in their pipeline in CRM. The reps know which ones have the best chances of closing as well as the potential size of those deals.
The sales manager or VP of Sales isn’t the sole person creating the forecast so you know it wasn’t put together just to make the pipeline look good.
They Assess Their Pipeline Every Week
The sales team needs motivation to assess their pipeline frequently. They may not pay close attention to upcoming deals when someone else is looking at their overall performance. When they’re in charge of predicting their revenue generated, they have to assess the pipeline every week to stay on top of the projected figure.
The pipeline becomes healthier as the sales team keeps an eye on how prospects move through the funnel, whether there are additional opportunities to close deals, and if an account seems to be faltering during this process. It’s all too easy for salespeople to get distracted by administrative work or overly focused on individual deals. If they’re not responsible for their own sales forecast, they may lack the incentive to get a big-picture view of what they’re doing.
They’re Forced to Find Deals to Fill the Gaps
If a rep is in charge of their own forecast and has to pick the actual deals they believe will close, then it’s obvious to them when there’s a gap. They will be forced to take action earlier.
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The sales person is the one with the first-hand perspective on their prospects. They know the decision makers, the customer needs and the approximate length of the sales cycle. If a deal is going to stall or shows signs of going poorly, they’re often the first to see the signs. Once that occurs, they know that they have to find a replacement deal to account for the gap created by this one.
Eventually, large pipeline gaps start to show up less often, and your sales team becomes more adept at meeting their numbers by proactively adapting to the environment.
There’s a Healthy Mix of Optimism and Reality
The sales team has a lack of accountability when someone else handles the forecast. They err on the side of optimism and present numbers that are only viable if the best case scenario occurs for every deal. Giving them control of their sales forecast encourages the addition of reality to these pie in the sky numbers.
The salespeople begin to recognize the markers of a deal that will fulfill its initial promise. They spend less time wasting their time on the wrong targets. The sales team takes an objective viewpoint on their current and future activities. The addition of a realistic perspective to forecasting also helps you develop accurate reports and gain deeper insight into the team’s performance.
One way to accomplish this part of the process is to empower the sales team with objective data points that show the health of their deal. When they can easily see and compare their deal performance, they move away from subjective numbers chosen based on their gut feeling. They also start to acknowledge the things that can go wrong in the sales pipeline, rather than hoping that every deal goes through no matter how bad things look. By embracing an objective approach, but leaving them in control, you can reduce uncertainty and chaos that can dwell in your sales cycle.
The Team Has a New Metric to Focus on
When your sales reps are forecasting a certain number of deals for a quarter, they now have a vested interest in focusing on these deals. The simple act of focusing on specific deals helps them not get distracted or overwhelmed by all the possibilities in their pipeline.
They can allocate most of their resources on the deals that absolutely have to end up in the win column to meet the quota or another business goal. It also helps avoid deal slippage on the most important accounts. Once these are won, the leftover resources can start spilling into lower priority options.
You can also track the accuracy of individual forecasts as a metric for coaching and compensation. This helps you raise the awareness of predictability across the team without having to continually beat the forecasting drum.
Putting the power of sales forecasting into the hands of your sales team is an important part of improving their effectiveness. They learn how to work with data and apply their deep understanding of the sales cycle to form objective opinions on their pipeline health. They react faster to pipeline gaps and can identify the deals that deserve the most resources.