Why I Stopped Questioning My Team’s Sales Forecasts
As a CEO, I feel pressured every board meeting to deliver an accurate sales forecast. I often find myself transferring this pressure for forecast precision to my VPs. They in turn place the same pressure on their sales managers. Almost all sales organizations suffer from this downward motion. By the time this momentum of priority gets all the way down the chain to the sales reps, they get pulled off their accounts and into deal review meetings for entire days to interrogate close dates and guess pipeline stages.
When this type of culture permeates an organization, it’s easy for a sales manager to believe they’re creating value for their company by spending four days a month in forecasting meetings and giving their VP of Sales a forecast with a 5% margin of error. The VP inevitably loves having such an accurate idea of how much revenue their team will close. But far too often, precise sales forecasts come at the expense of actual sales effectiveness. Time spent in forecasting meetings doesn’t actually contribute to revenue, it simply pulls reps off their accounts and into internal meetings. It doesn’t have to be this way.
Spending a meeting discussing close dates, probabilities and deal sizes can certainly feel like management. But going over these elements don’t make a deal any more likely to close. If sales managers are going to pull their reps away from their phones for a whole day to go over deals, it should be to discuss the health of the conversations and to figure out ways to close them faster. This seems obvious, but sadly it is not. According to Sales Benchmark Index, 37% of sales management time is spent on forecasting. This means more than a third of the time, the people in charge of improving a sales team’s performance aren’t doing so.
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Extra time spent helping reps navigate the obstacles of modern B2B sales is increasingly necessary as the practice becomes more complex. There exists a debate in the community around the idea of the “informed buyer”: that today’s enterprise buyers are a majority of the way through their buying process before they reach a salesperson. This assumption encourages passive sales practices, which are the bane of growth. If an organization’s sales reps are simply waiting around for the informed buyers to knock on the door, and their sales managers are spending their time interrogating these reps so they can create perfect forecasts, that company will get a highly precise, bleak forecast.
SiriusDecisions unveiled research in May determining that B2B buyers do interact with sales representatives at every stage of the buyer’s journey. That journey simply looks different now. In fact, excellent sales teams are happy for the shift towards information availability. They still proactively find and establish a rapport with potential customers before the buying journey begins. From that point on, they guide their leads digitally through the ocean of information, instead of communicating it all in sales meetings. The excess of available information plays in their favor.
Every sales team will eventually need to pick up on this change of behavior and adjust their sales process accordingly. This isn’t something executives can expect to happen naturally in the trenches; the state of flux in the world of sales will only get more difficult to navigate for reps. Proactive behavior and adaptation to circumstances comes naturally to only the best sales reps. For us mortals, it takes coaching. But coaching is hard, much harder than interrogating reps all day to create a super-accurate forecast. So it’s no surprise that sales managers would rather focus on forecasting than focus on coaching. If sales organizations want to excel, we have to get away from this culture of reactivity taking hold.