Ho Hum, it’s March. Everyone had a good January, and February was OK. So, answer me this:
What does your 30/60/90 day pipeline say, with 90+% accuracy?
Why is this so hard?
It’s not unusual to go into a company and hear the VP of sales say their goal is to get forecast accuracy up. They need better pipeline visibility. They have to get a better handle on deals. I’ve even heard them beg.
It’s not that hard.
What we observe in companies that get it right is they are really focused on two things – one from the customer side and the other from the sales side.
Customer Side: Customers will not buy unless they really commit to an implementation date for what you are selling. This I-Date needs to be obtained from the customer about mid-sale, like around Stage 3 or 4 at the latest.
What day is the prospect going to start using what you are selling? No, the actual day they are going to throw the switch, do something different? For the services industries sales teams, what meeting have they committed to, or what project are they working on where they need to have the information or service you are providing?
This Implementation Date, or I-Date, has to have at least two “compelling events”, which we have labeled Dragons.
It’s really this simple from the prospect’s side:
No Dragons = No I-Date
No I-Date = No Deal
So get these “maybe” deals off the forecast, period. I had a rep at a company tell me one of his deals would come in within 30 days; it had been in the forecast for 442 days. To top it off, I actually followed up since I knew the company the rep was trying to sell into and discovered they had already bought from a competitor and were very happy.
Sales Side: If you really want a leg up on your forecast accuracy, you need to get a handle on the speed or velocity of deals. Not just how long has the deal been in the forecast, but how long by stage.
Way too often we see deals that spend the right time in Stage 1, forever at Stage 2, and then run through the rest of the Stages.
Here’s what you should see in a typical sale, say between $20K-$50K.
Really start observing what is typical or normal when customers buy from you, and then track normal against the funnel. No more deals holding at Stage 2 since the sales rep does not want the visibility and have to “force” the deal at the end of the month or quarter.
If you really want to end Q1 well, and start Q2 off on a great note, clean your forecast. Clean it as a rep and as a manager. Follow the rules in this article and you may have to work harder, but you won’t have to do what my friend, Stu Schmidt, calls “unnatural acts” at the end of the month to make up for poor stage management practices.
Don’t be unnatural, unusual, or uncomfortable at the end of the month. Do it right. Measure days in stage and get I-Dates.