How Mature Is Your Forecast Process? Three Quick Checkpoints

It’s not uncommon for organizations to turn to tools to help solve challenges. But how often do they also look at their business processes when doing so? In today’s blog, we discuss why a review of the “current state of your process” should be taken into account when looking at tool options for sales forecasting.

When we took a look at organizations’ use of tools and processes to support sales forecasting, we made an interesting observation: Use of a sales forecast dashboard was more common than having a formal sales forecast process in place. However, when we looked further at impact on sales performance, investment in a dashboard did not have links to win rates—but process maturity did. Let’s take a closer look at what’s going on.


Forecast process maturity is linked to higher win rates (Click to tweet)

In our 2018 Sales Operations Optimization Study, we found that while two-thirds (66%) of organizations had a forecast process in place, less than one-fifth (16.6%) had a formal forecast process in place. This is not uncommon—organizations may have a process in place, but the process maturity varies. To read more on sales process maturity and why it matters, click here and here.

When we looked at linkage to win rates, we found that organizations with a formal sales forecast process in place saw a significant impact on sales performance—12.6-point higher win rates when compared to those with a more subjective or casual sales forecast process.

When we took a similar look at the use of sales forecast dashboards (tool), the majority of organizations had invested in a dashboard of some sort. This is not surprising considering the myriad of sales tools available today. Almost three-quarters (72.1%) of our research participants confirmed they are using a sales forecast and business review dashboard, with another 11.4% having plans for such a tool in the next 12 months. However, when looking at linkage to win rates, investment in a dashboard did not seem to have any correlation. (Click to tweet)

What does this mean? While most organizations have a tool to support sales forecasting, having a formal sales forecast process in place is not as common as it should be, especially when looking to improve win rates. Therefore, organizations should look at the state of their sales forecast process when considering investing in or upgrading their sales forecast dashboards.

Here are three questions to consider when assessing your sales forecast process maturity:

  1. How structured is your forecast process? Every organization reviews sales forecasts, but how formal and structured they are varies. What is reviewed, by whom, when and which adjustments are made are all key considerations when putting more structure around your forecast process. Setting up a cadence—a clearly defined schedule (weekly, monthly and quarterly) with clear owners for each forecast review phase—is a key step in making the forecast process more formal. Depending on your business model (B2C, B2B, etc.), segment focus (small business, enterprise, verticals) and sales cycle length, you also might want to consider whether a weekly review is necessary each month. A well-defined cadence for your forecast process will ensure the most up-to-date data is used in sales forecast dashboards.
  2. How are you using data in your forecasting process? Subjective and historical data are commonly used in sales forecast discussions. Whether deals are in “commit,” “best case” or “pipeline” status is typically based on subjective judgment by sales teams and sales leaders. Historical data based on past sales performance and opportunity win/loss details also is commonly used to help sales leaders adjust their forecasts. Predictive data is based on models that take multiple opportunity data points to calculate the health of an opportunity, which many artificial intelligence (AI) based technologies now provide. Using predictive analysis as part of the forecast process enhances the sales forecast discussions to be multidimensional. Defining how you want to use available data in your sales forecast process will help identify some of your dashboard requirements.
  3. How actively engaged are your sales managers in the forecasting process? Active engagement by sales managers is critical to ensuring the process and efforts involved ultimately lead to the desired outcomes. Are your sales managers validating the quality of the activities and outcomes in each sales stage, not just getting a read-out of updates from their sales team? If sales managers provide their sales teams with opportunity and funnel coaching consistently, there will be more clarity during forecast calls. To read more about different types of sales coaching, click here. Manager engagement and coaching is a critical foundation for both the forecast process as well as adoption of forecast dashboards when they are implemented.


Questions for you:

  • When was the last time you reviewed your sales forecast process?
  • How structured is your forecast process? Do you have a defined cadence in place?
  • How might you leverage sales technology to provide key inputs into the sales forecast process?
  • How engaged are your sales managers in driving the right discussions and coaching during the forecast review process?

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