Triangulating Your Sales Team's Forecast
Talk to any seasoned CFO or CRO, and you’ll learn that key considerations underpin the creation of a solid, reliable forecast. However, the specifics of these considerations often vary, revealing the uniqueness of the worlds that each exec operates in.
There is a recurring theme, however, upon which a significant consensus is built: don’t put all your eggs in one basket. This wisdom, though simple, is particularly pertinent when it comes to forecasting.
The High Stakes of “Commitments”
In the world of business operations and finance, a “commitment” is more than just a verbal promise or an official declaration—it is a pledge backed by one’s job. When a sales rep, sales leader, or increasingly, a marketing leader provides a “commit” on performance, they essentially stake their careers on the forecast’s accuracy.
Given this, it’s crucial to establish goals that are not just intelligent and ambitious but also achievable. In terms of operational execution, companies need to strategize to overachieve on their commitments. It’s here that an often-underappreciated team comes into the picture, a team with “OPERATIONS” in their title. They are responsible for forecasting the company’s macro-level future while optimizing the micro-level factors determining success.
The Art and Science of Triangulated Forecasting
A more accurate, less risky approach to forecasting entails careful triangulation, inspection, and collaboration. Here’s a closer look at each of these facets.
Triangulation: When formulating a forecast, one must examine it from various perspectives, employing a range of both simple and advanced tools. This could mean comparing coordinated sales rep forecasts, such as those offered by platforms like Clari, with machine learning predictions and historical, in-quarter stage-based pipeline conversion rates.
Inspection: Paying close attention to the recency of sales activity, marketing efforts, or signs of buyer interest is a key step in achieving forecasting accuracy. This process allows for the identification of trends and patterns, providing useful insights into potential future outcomes.
Collaboration: The dialogue between various stakeholders in the forecasting process, such as sales reps and marketing leaders, is critical. Encourage them to position their work within the context of truly data-driven views of data and predictions. Stimulating conversations, debates, and experimentation can unearth valuable insights and foster a more holistic and informed forecasting approach.
Robust forecasting is more than just a number-crunching exercise. It’s a complex process that requires careful consideration, multiple perspectives, and meaningful collaboration. By triangulating data, inspecting recent activities, and encouraging debate and experimentation, organizations can construct solid forecasts and set themselves up for future success.