There are many times in life where “following your gut” takes you in the right direction. Calling your sales forecast number is not one of them. If you’re a forecasting gut-follower, you may only start to worry when your team comes in under goal — or during the mad scramble at the end of the quarter. However, blowing your sales forecast out of the water isn’t a win either. You’re actually missing out on key opportunities you could’ve taken if you’d have been data backed and accurate from the beginning.
Research from the Aberdeen Group, said that companies with accurate sales forecasts are 10% more likely to grow their revenue year-over-year and 7.3% more likely to hit quota. And yet, with all that on the line, Gartner’s State of Sales Operations Survey revealed that only 45% of sales leaders have high confidence in their organization’s forecasting accuracy. If leaders don’t have confidence in their sales forecasts, how can they expect the organization to achieve them?
The reality is, your forecast determines how your company allocates budget, distributes headcount and plans for the future. So accuracy is critical. Coming in under forecast leads to layoffs, budget cuts, low morale, and more. Alternatively, blowing your forecast out of the water means you missed key business opportunities to accelerate hiring, marketing programs, or product development. In both cases, you risk losing board confidence and executive team credibility.
Today’s leaders need to shift from simply "rolling up a number" to having a deep appreciation for how that number fuels their operating plan. In this infographic, we dive deeper into the impacts of a poor forecasting process.
Want to take your forecasting process from a ‘gut’ instinct to data driven confidence? Check out our pathway to revenue confidence.