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4 Steps to Improving Forecast Accuracy with a Common Sales Process 

sales forecast accuracy

Sales forecasts are by nature imperfect, but according to SiriusDecisions research, 79% of sales organizations miss their forecast by more than 10%. That inaccuracy has a tremendous effect on an organization’s ability to deliver high-quality products and services to customers.

The most common reason sales managers can’t get sales reps to forecast more accurately is because there isn’t a common sales process represented in the pipeline stages. Follow these 4 steps to get clear on the status of opportunities and improve your forecast accuracy.

Step 1: Get crystal clear on the definition of each stage in the selling process

According to SalesForce, a documented sales process is key to improving forecast accuracy. Each stage in your sales process should be clearly articulated, preferably with names rather than Stage 1, Stage 2, etc. And while the definitions of the stages should be thorough, they should also be simple enough to remember and apply.

Developing a common language to discuss stage progression creates alignment across the sales force, which is necessary on a small team and paramount for large, widely dispersed sales forces. If for some, stage 1 means “targeting and qualifying” but for others it means “uncovering needs,” the communication around opportunities becomes murky.

Take Action: Consistently refer to your common sales process in reports, within your CRM, and whenever discussing sales opportunities.

Step 2: Develop key activities and milestones within each stage

The activities and milestones within each stage should reflect the high-yield selling activities that are necessary for your sales team to be successful. As a sales leader, you should identify the patterns and best practices that are predictive of success and make them milestones within the corresponding stage. This way, selling activities fit with the pipeline and reps cannot promote an opportunity to an advanced stage before they have hit each milestone—reducing false optimism that can skew forecasting accuracy.

If identifying the decision making team is important in your selling environment, for example, it should become a milestone in one of the early stages. You’ll not only get a clearer picture of where an opportunity is in the pipeline, but you’ll also be able to see where coaching needs to be directed.

Take Action: Build rules or required fields into each stage of the process. If these milestones are not completed and recorded within the CRM, the opportunity cannot advance to the next stage. This reinforces adherence to the process and improves forecast accuracy.

Step 3: Ask targeted questions that lead to real answers

If you don’t approach your sales rep with specific questions using a common language, it’s easy for them to jump into a blow-by-blow description of what the buyers are thinking and feeling that ends 20 minutes later without a definitive update.

Clearly define your stages, and you should be able to ask your rep which stage of the process they are in with a prospect and get a one word answer. You can train your salespeople to expect the questions you will ask them, and they will know the answers before you call—turning your discussion into a coaching opportunity as opposed to a drawn out account review

Take Action: Ask these 3 questions when reviewing opportunities:

Which stage of the process are you in?
How do you know this?
What is the definitive next step?

Step 4: Use data insights to improve “in-the-moment” coaching

Establish criteria that you can evaluate within each stage of the pipeline process and you’ll be able to identify the warning signs of an opportunity stalling or slowing—as well as respond quickly when an opportunity begins moving forward at a fast pace.

Establishing verifiable outcomes allows you to pinpoint problems as quickly as possible and collaborate with reps on developing action plans to move the opportunity forward. If the deal is unlikely to ever materialize because the prospect isn’t qualified, you’ll get an honest appraisal rather than finding out at the end of the forecasting period.

Take Action: Establish a clear list of qualifying characteristics used by everyone to consistently and accurately score how qualified an opportunity really is. Use a maximum of 4-7 characteristics—you can download our list for free at the bottom of this post. 

Conclusion

Sales forecasts must be accurate and credible in order to be meaningful. By connecting a solid sales process to the pipeline stages, activities and milestones can be clearly outlined, conversations with reps are streamlined, and forecasting accuracy improves.

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The Five Qualifying Characteristics of a Legitimate Sales Opportunity

Will Brooks

More articles written by Will Brooks

As Chief Operating Officer of The Brooks Group, Will draws on his leadership, marketing, sales, sales management and operational experience to help develop and execute the company’s overall growth strategy. Drawing from over 15 years of experience in the training and development industry, Will combines his deep institutional knowledge and client experience to optimize operations at The Brooks Group.