Jeff Williams is Operating Partner at Bain Capital Ventures and former SVP of Sales at FireEye, where he led the team to over $1B dollars in revenue. Following his webinar on the metrics to use in sales forecasting, we spoke to Jeff about common sales forecast challenges and best practices.
How often do you think sales teams should revisit forecast data? Is there an ideal cadence for sales forecast calls or reviews?
Jeff Williams: Everybody has different philosophies on this, and the stage of your company also matters, such as if you're a startup versus a publicly traded company. I like to drive the following cadence:
Usually in the first week, I like to have a QBR. This would be just to review the previous quarter and celebrate the wins. Even if you missed a number, I guarantee there are highlights that you need to celebrate. You always want to reflect on what worked and what didn't, and then set expectations for the current quarter. That will give people time to update Salesforce or their forecast data in that first week; I'm not a fan of having a call the day after a quarter ends.
Generally, I then like to have a Week 3 commit, where they're committing based on the knowledge they have going in, and then a Week 6 commit where they're really locking down their number. Then I move to weekly reviews in Weeks 9, 10, 11, and 12. So I have large space in the first month, a couple of calls in the second month, and then I move to weekly calls in the final month because the cadence needs to move more quickly.
This macro kind of sales forecasting leaves room for other calls where you need to do sales training and enablement or deeper inspections. I'm just not a fan of doing weekly forecast calls. They add very little value from time to time, and, frankly, they take productivity out of the field. I'm a huge fan of building a trusted culture that consistently delivers accurate and timely data, so that we can do what I call—and what my team has always called—continuous pipeline management. It becomes something that just happens all the time and you have these calls spaced out where they can be meaningful to the actual update.
Returning to your point on productivity in the field, how do you enforce data entry from reps?
Oh, this is the age-old problem of sales reps not inputting the data! You're only as strong as your data, and you're only as strong as the accuracy and timeliness of that data. But that said, again, I think it's a cultural thing. I think you have fewer forecast calls and you give a trust-but-verify ability to enforce data entry. It's important to leverage a platform and to make sure it's really easy to input data for the reps, that there's no friction in their ability to enter data. Because we all know that sales reps don't like to input data: that's just a fact. So we need to create a platform and the ability for them to seamlessly enter the data in a timely fashion.
Again, I'm not a micro-manager all week. But I do set clear expectations that every Friday by close of business their time, I will be running a report and I will present it to the leadership team or to the board of directors. That way, you're not on them all week, but they have to do it on a weekly basis.
Could you speak to sales forecasting solutions or software you've implemented successfully at previous companies, or are you using an old-school Excel modeling method?
Obviously the little, little start-ups always start with using Excel, but I've always moved very quickly to a Salesforce-kind of automated platform where I can create categories and create historical data right out of the gate.
So when planning the sales forecast, how far back do you think sales executives should be looking for their analysis? Is it a quarter, a year, or something in between?
To me, that's simple. I think you need to start on day one. Go as far back as you can. The data will continue to evolve as the business changes.
Makes sense. Then how do you manage your numbers for next quarter while still working on this quarter's business?
This brings up an interesting point. To me, it's all about setting the proper value. Often, people put an opportunity in and just throw in a value, and that value's not accurate. It's important that you qualify the account well enough to the point where you have at least some form of value. It might be the average deal size if you don't have the data for the company, or it might be a proper deal value.
I think the most important thing is the date. People putting in entries of opportunities will just throw a date out there. They generally put the last date of the quarter, so it's not accurate, and you can't drive linearity.
You also need to manage leading indicators, like Proof of Concept (POC) or Proof of Value (POV) volume. It takes a certain amount of POVs per rep going into the next quarter to manage the forecast ratios that will drive the pipeline for the following quarter.
Switching gears a bit, could you tell us about your relationship with sales operations and how you leverage that team to automate this kind of reporting?
Absolutely. Sales Ops and Sales need to be in concert with data: data in brings data out, so those expectations need to be set. I've always worked very, very closely with Operations to ensure data integrity because I own the input of the data, and Sales Operations generally owns creating the actual reports around that data. It's a very strong and tight relationship around what data comes in and what reports we're looking to come out.
What advice would you give to a young, successful account manager as they seek to transition to becoming a sales director or sales manager?
Get your numbers right. We all know that data will give you the ability to make calculated, statistical decisions, but the ability to accurately forecast and hedge artfully is also important. I think a real sign of a great leader is somebody that can impart that art. If you overpromise and underdeliver, that's not good, and if you underpromise and way overdeliver, you're also missing out on opportunities. So I think it's the ones that can accurately forecast and the ones that can take a leadership role on making their own leadership look good—that generally bodes well.