Sales Operations and Sales Enablement Share Responsibility for Forecast Accuracy

How was the last forecast meeting, the last pipeline review you attended? In which role did you attend the meeting – sales, sales operations or sales enablement?

I’m sure, whatever the challenges and the outcomes of the meeting were, the term “forecast accuracy” was used at some point. It’s a common concern of sales operations, because they usually own the forecasting process. However, as the lines between sales operations and sales enablement are not always clearly defined, the involvement of enablement might vary.

Forecast accuracy is equally important for sales enablement leaders because all enablement efforts should impact the pipeline and its metrics

Along with sales operations and the sales leadership team, sales enablement needs highly accurate numbers. Enablement often needs these pipeline metrics to show their impact on the business. As we will discuss here, sales enablement can also play a vital role when it comes to improving forecast accuracy. Before we go there, let’s look at how organizations approach forecasting

Almost half of organizations use random and informal forecasting approaches, and they have poor win rates to show for it

Interestingly, 45.7% of our 2018 Sales Operations Optimization Study participants reported following either a random (17.6%) or an informal (28.1%) approach to forecasting. “Random” in this context means that the forecast numbers are based on the salesperson’s or the sales manager’s subjective opinion, whereas an informal forecasting approach is based on more casual reviews that are not based on a formal process nor on defined deal evaluation criteria. Another 37.9% follow a consistent regular forecasting approach and 16.4% apply a structured and formally implemented process. Forecasting begins to become consistent if there is an established cadence with defined roles that have to participate. Also, there should be a standard agenda and defined outcomes for each meeting.

How you approach forecasting impacts win rates significantly, and implementing an effective forecasting process requires enablement efforts

Organizations that approach forecasting based on subjective opinions have a hard time achieving excellent win rates. However, every step towards a formal and structured forecasting approach leads to much better win rates of forecast deals. Win rates of 58.4% are excellent compared to, for example, the average win rate of 51.8% we found in our 2017 Sales Enablement Optimization Study. And with even more structure, win rates can be improved beyond 60%.

The role of sales enablement becomes apparent if we look at the barriers to better forecast accuracy

The top two barriers are salespeople who are too subjective and sales managers don’t investigate their salespeople’s commitments well enough. This is where sales enablement comes into play.

Let’s look at two ways how sales enablement can help to improve forecast accuracy: close collaboration with sales ops and improving the sales coaching approach.

  • Close collaboration between sales ops and sales enablement:
    Usually, sales operations is the owner of the forecasting process, and sales enablement owns the process of engaging, equipping and empowering the involved customer-facing roles and their managers. Sales ops has to establish the foundation: defining the forecasting process, the steps, the cadence and the responsibilities of the roles involved. Additionally, it’s about defining deal evaluation criteria to ensure that the forecasting numbers are based on the same forecasting approach to be comparable. Deal evaluation criteria should reflect how important the deal is for the customer and for the selling organization. Criteria that could help are, for instance, mapping against the ideal customer profile, the potential margin, the growth potential, entry in a new market, implementation evaluation, or renewal business. Whatever the set of criteria is, it should be defined for each selling scenario (transactional, complex, renewal, etc.) to ensure that all deals are evaluated the same way in their category of selling scenario. Only then can the forecast numbers be comparable.
  • Sales enablement formalizes the sales coaching approach to ensures reinforcement and adoption of the forecasting approach by enabling and empowering the sales managers:
    If sales coaching is not already on your sales enablement agenda, it should be. The main barriers to better forecast accuracy have a lot to do with sales coaching as one of the most effective enablement services. Please check out the four ideas to improve sales coaching effectiveness. The context here is that every effective opportunity coaching session should lead, actually as a by-product, to a much better forecast number. By asking the right questions regarding the deal, the engagement process, the involved buyer roles, their desired outcomes, their decision making process, and more, the first two barriers get minimized. Because after such a coaching session, the salesperson gets a much more objective perception of where their deal actually is regarding the customer’s path and the internal selling stages, and what the next required actions should be. Also the sales managers are no longer in a “Can I believe that number?” mode. No, after such an effective opportunity coaching session, the sales managers are in a “Now, I know this is the correct number” mode.

 

Effective sales enablement leaders know that they can only be as successful as sales operations’ foundation is. Effective sales enablement leaders are always focused on a close collaboration with sales operations to ensure that the established foundation gets well implemented. This depends on how well salespeople, and especially sales managers, are engaged, equipped and empowered to deliver highly accurate forecast numbers – as a by-product of their regular deal coaching sessions. It creates a win-win situation for the entire sales force.

 
If you haven’t already, have a look at our new book Sales Enablement – A Master Framework to Engage, Equip and Empower a World-Class Sales Force. Lots of “how to” information to address the challenges mentioned here.

Questions for you:

  • How do you collaborate with sales operations when it comes to forecast accuracy?
  • How to you ensure the implementation of a solid sales coaching approach?
  • How do you drive the necessary change efforts?

 
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