sales forecasting

4 Reasons Why Bad Sales Forecasting Is a Sign of a Bad Sales Process

A bad sales forecast is always unwelcome news. You have to let the executive team know that you’re over or under on your forecast and undergo the torturous process of being questioned about what went wrong. The worst part of consistently inaccurate sales forecasting is that it’s a sign of another problem. You’re probably losing money from your predictions due to a bad sales process.

Poor Understanding of Commit and Best Case

Your sales forecast is doomed from the start if it’s built on top of poor data quality. Do your sales reps have a common language to discuss deals with? How much of an understanding do they have on Commit and Best Case?

Create clear definitions of what each of these terms means and when the sales reps should use them. Provide concrete examples of Commit and Best Case, so they understand how the terms relate to the deals that they have right now. By pushing for consistency in this area, you can cut down data quality concerns and help reps understand their goals better.

Checkout Datahug’s New eBook

B2B Sales Operation Playbook

Learn more

Working from Spreadsheets

Many sales teams start with spreadsheets, but they quickly become an unfeasible solution as the information becomes out of date. Reps have multiple versions of the same data, and everyone works with different numbers. Mitigate this issue by adopting a sales forecasting solution that centralizes the data and develops a single version of the truth.

Unpredictable Conversion Rates

Your conversion rates are all over the place, making it impossible to make accurate forecasts. The primary cause of unpredictable conversion rates is a lack of understanding of the steps in your sales process. A lack of documented actions makes it difficult to introduce consistency. An overly complex sales process with many redundant stages is another problem. Put together a clear and well-documented sales process to guide your reps and create more predictable conversion rates.

High Push Rate

Your sales forecast seems solid, and you’re looking forward to the leadership meeting. The next day, half of the deals in the pipeline are pushed into the next quarter, and you have a massive gap staring you in the face. When your sales reps can’t get deals done when you need them to perform, they may lack the skills to consistently close.

Have your sales managers pull those reps aside to find out what issues they’re running into that results in a high push rate. Even the most amazing sales people have deals slip here and there, but a pattern of them is cause for concern. The rep may need additional training or could simply be a poor fit for your sales team. Monitor overall performance and drill down to granular data to look for push rate trends among the team and individual employees.

Your sales forecast problems won’t go away on their own. You need to determine what part of the sales process is causing the biggest problems with your numbers. It’s likely that you suffer from at least one of the above problems, but if you’re particularly unlucky, you’re contending with all of them. Take a look at the big picture when you consistently have a forecast that’s over or under. You’re losing money in other ways because your sales process isn’t buttoned up.

There are no comments

Your email address will not be published. Required fields are marked *