What are the chances of your next sales forecast being accurate? Probably not that great.
Accurate forecasting has mystified some of the smartest people in business. In fact, the CSO Insights 2017 World Class Sales Practices Study found that only 40% of respondents said their ability to close deals as originally forecasted met or exceeded expectations.
In this post, we’ll discuss why sales forecasting is difficult in today’s complex B2B sales environment, and ways that you can increase forecast accuracy in 2018 and beyond.
According to a survey conducted with over 100 enterprise sales leaders across industries, 50% missed quota. Of these leaders, 25% had an average deal size over $100K and over 30% had sales cycles longer than 6 months. Key findings are outlined below:
Those who missed quota felt that they lacked visibility of everything going on in the account. They couldn’t prove value or create a sense of urgency. Further, they had competitive blind spots.
The sales teams that won deals, on the other hand, had a deeper level of visibility that proved critical to closing deals. They all had the following in common:
Let’s outline the ways you can gain the visibility necessary to build key relationships with decision makers, gain a clear understanding of business goals and map solutions to them, and quantify the potential value and ROI to the prospect.
Winning sales organizations focus on developing a clear understanding of the customer’s internal structure, personnel and decision-making process, including the buying centers with responsibility for initiatives and budgets. While typical CRM tools help keep track of contacts (and their roles) within an account or opportunity, much more information is needed to successfully identify revenue potential in your key accounts or move through a deal. In today’s complex sales environment it is critical that sales is able to identify, connect and access the key stakeholders and decision makers that ultimately influence and control the strategic relationships, budget and purchasing process.
But it’s not just about reporting structures — it’s about the politics and who influences whom throughout the organization. Visualizing this information with a relationship map, representing friends, foes, and third-party influencers, is critical to helping your team identify gaps in relationships and build quality relationship development plans.
The map also reveals the unique goals and priorities of each individual, enabling you to focus your strategy and solutions on what matters most to build value and trust with the people driving the business.
According to the survey, 1 in 5 sales leaders could not identify why their teams’ deals slipped past the close date. However, Revegy customers who use relationship maps have this holistic view, and can reduce sales cycle length by understanding how decisions are influenced across the buyer’s organization. For instance, the VP of Sales at Fidelis Cybersecurity reviewed visual relationship/strategy maps and discovered that the team did not have access to decision makers for a $15M healthcare deal – they moved the opportunity out of the pipeline before it negatively impacted quarterly forecast.
Understand Business Goals and Map Solutions to Them
Sales teams who understand customer’s goals, and can align their solutions directly to achieving these goals are far more likely to close deals on time. One of Revegy’s customers, a leading analytics company, closed a $17M deal by using a visual strategy map to connect their solutions to the top 3 goals of a Fortune 100 healthcare/pharma organization.
A leading real estate information company used a visual approach to understand what was preventing their customers from achieving their goals and then mapped solutions.
JDA Software struggled to forecast more than a quarter out because management lacked visibility into meaningful, objective insights about key deals. When they introduced Revegy for account and opportunity planning, they were able to identify the most common barriers impacting opportunity delays and late-stage forecast surprises so they could focus more time on deals with high likelihood to close and get out of less qualified deals that absorbed resources, time and effort.
Today, they have a 3-year predictable forecast horizon and are engaging in joint planning with their key accounts that drives multi-year revenue plans.
Organizations should invest in the tools necessary to gain forecast accuracy. Revegy’s relationship maps deliver a clear understanding of the customer’s internal and political structure showing influencers and decision makers, how they’re connected, the status of your relationship, and their preference level for your solutions. Revegy’s strategy map enables you to document the company’s overarching goals, challenges and priorities across the corporate landscape so you can align your solutions directly to the areas that are funded, and help the client achieve their business objectives.
With a deeper level of insight into the areas most likely to impact forecasted deals, companies can achieve multi-year forecast horizons and more predictable revenue streams vs. focusing on short-sighted quarterly pipeline numbers where chasing and playing catching up is a consistent battle.