From finance, product, marketing, and HR all the way to the C-suite, your entire organization relies on the accuracy of the sales forecast. Solid sales numbers enable your organization to plan, hire, and invest wisely. Your marketing team will know how many new qualified leads to generate. Your R&D team can understand which areas on the product roadmap to prioritize. The sales pipeline and revenue forecast are key strategic inputs into where your company needs to focus and prioritize in coming quarters.
What happens when deals across the sales team fall through in the final weeks of a quarter? Shortfalls between predicted and actual revenue can disappoint shareholders and throw strategic investment plans into chaos. How can your sales organization ensure the numbers are as close to the mark as possible?
Your entire sales team must be invested in the outcome and accuracy of your sales forecasts. Here are three strategies for doing that successfully:
Showcase the Importance of Forecasting in Sales Trainings
When new sales reps join your team, provide a holistic company overview that illustrates the importance of accurate forecasts. Showcase the many ways that forecasts affect the organization, from company growth and public perception to fundraising and investor relations. If you challenge reps to look beyond their own roles, they will understand the importance of their work to company goals and the importance of rigor around sales forecasting.
Offer Sales Bonuses Based on Forecast Accuracy
Consider tying your sales team's incentives to their commitments and adjusting at the end of quarter based on accuracy. Reps who forecast accurately will be eligible for the entire potential bonus, while the overly optimistic may see their compensation fall short. This incentive strategy will encourage your reps to take a close look at how likely each prospect is to commit and guide them to speed up expected close dates when possible.
Increase the Accountability of Sales Managers
Your sales reps work the front lines, managing communications with prospects and guiding them closer to a sale. But in order to ensure forecast accuracy, sales team managers must build it into their DNA, which will in turn drive behavior of the reps on their teams. Hold leadership seminars for sales team managers to review best practices on running 1:1s and how to approach forecasting conversations so they know what to ask reps to gauge which commits are likely to close.
Getting buy-in on the importance of sales forecasting at every level of the organization is crucial to building optimal processes.