Forecasting in sales is one of the hardest things we’re ever asked to do. Getting it right makes you look like a genius. Getting it within striking distance will keep you employed. Getting it wrong will get you gone.
It’s tough as salespeople, tougher for sales managers, and even tougher for VPs and CEOs. But as you progress in your career, it becomes more and more critical that you:
- Know how to forecast, and
- Get damn good at it, fast.
So, why don’t we talk about it very often? Here are some forecasting tips for front line sales managers responsible for their team’s targets.
Start with the “Why”
Salespeople want to focus on tasks that will benefit their bottom line, and it may not be entirely clear to them how forecasting is a good use of their time. So part of your job as a Sales Manager is to educate your reps on why forecasting matters and how it benefits them. Help them consider:
- Their money: If they know the likelihood of their pipeline closing, they will know what they need to do to get paid, hit quota, hit accelerators, promotions, etc. Give them the inputs to achieve the desired outputs.
- Their quota: Proper forecasting will help you make comp adjustments for seasonality or other factors. Yeah, I said it. Adjust comp for seasonality. Once you’ve done so, you can make a case that these necessary adjustments will benefit them personally.
- Their support: If you know what the company growth is going to look like, you can make sure that you’re hiring customer success at the right rate to create a great onboarding experience and word of mouth. No salesperson wants to lose a deal because of bad reviews.
- Spiffs: If leadership has confidence in your forecast, that helps them create spiffs and incentives.
When you craft messaging around what’s important to your reps, they’ll respond with action instead of indifference.
Make an effective deal plan scoring criteria
Create criteria for scoring each account based on the stage in the funnel, the people involved, the impact it will have on the business, the timing, and the buyer’s budget.
- Who is involved in the decision-making process?
- Are you speaking with an influencer or a decision-maker?
- Do you have a champion?
- What are their pains?
- Are they educated on why solving these pains (fast) matters?
- Does your solution address their pains?
- Do they have the budget to pay for your solutions and how will they implement them?
- What are the consequences of waiting to solve their pain?
- And what is an agreed-upon timeline?
The more boxes you can check, the higher you can score the quality of the account. Higher scores mean higher close rates. It doesn’t need to be complicated; it just needs to be effective.
Know your reps and score them too
Obviously, not all salespeople are equal. No one should know a rep’s proficiency better than their manager, and it’s your responsibility to know the capabilities of your reps individually and as a team.
With this knowledge, you must realistically score your reps based on their career and company tenure, previous performance, and current level of dedication.
Create a baseline score for each rep and then use their pipeline and deal plan scores to estimate where they will land. For instance:
- A Reps: $450-750k
- B Reps: $200-450k
- C Reps: $100-200k
- Ramping: $0-100k
Make forecasting part of the process
Work with the sales ops team to mandate critical account information updates, adding fields that make forecasting simple and effective for you, the sales manager. And remember, the simpler the process is for your sales reps, the easier it will be for you to interpret the data later.
Add fields that make account scoring automatic for your reps. The more clicks you can save, the more likely reps will use it effectively. This will not only help your team stay organized, but it will also help you and the leadership team discover areas of improvement for individuals and the group.
Differentiate yourself with consistency and dependability
If you can forecast your revenue as a sales manager, not only are you an invaluable asset to your VP and company, you’re on your way to becoming the next VP. One of the easiest ways to stand out is by consistently nailing your number and showing people that they can count on you. This separates you from the pack and will help you take your career another level up the ladder.
Nobody likes missing targets. Nobody likes having no idea what sales will look like. Get it right and you stand out. Get it wrong, and you’ll be gone.
Learn more about developing reps and how high-performing cross-generational teams succeed in our eBook!