Sitting in a pipeline forecasting meeting can be stressful. If the pipeline isn’t sufficient to meet the quarter’s numbers, sales leaders are under pressure. And as for the reps, being put on the spot in front of their peers can be uncomfortable—potentially causing them to embellish the likelihood of a deal closing or make projections based on their gut feelings. Each person in that meeting has a role and responsibility to ensure targets are met, and continual growth is achieved.
But the meeting doesn’t start and end with sales. Although they might not be seated at the table, finance is watching your sales forecast—and you know that you’ll be sitting down with them next. There’s nothing finance dislikes more than uncertainty.
Despite the fact that stress levels may be higher than normal, forecasting meetings don’t have to be painful. Here are a few simple ways sales leaders can take the stress out of their pipeline forecast meetings.
1. Be Prepared
There should be no surprises at the pipeline forecast meeting. You need to walk through the door and already know where reps stand with their numbers. In addition to detailed pipeline data in Salesforce, you should also have access to reps’ sales activities and customer interactions on a day-to-day basis.
This information tells you whether the level of rep activity is sufficient to close a deal for your business. By knowing what’s needed and whether it’s being done, you can make actionable, data-based recommendations for your team. Additionally, by understanding the level of interactions, you can make a more accurate revenue projection – based on data rather than sales “instinct.”
If you see that reps are having the right amount of engagement with the right stakeholders, your confidence goes up that a deal is actually on track to close – making you more comfortable with your numbers.
2. Speak Their Language
Know what motivates your reps, so you can speak their language to incent the desired behaviors. Reps may not care about the revenue, but they do care about hitting their own numbers and maximizing their commission payments. Keep that in mind and share ideas for them to increase their variable pay.
Maybe it’s using the forecasting meeting to unveil a new SPIF. If you tell reps they can earn 3x more by bringing in three new deals before the end of the month; you’re talking their language. That number will get their attention faster than looking at company revenue/margins. If reps aren’t where they should be, it’s part of your job to figure out how to motivate them to get there.
3. Eliminate Surprises
There’s a reason that most sales leaders only deliver 1/2 of their committed forecast on a consistent basis. Sales forecast accuracy requires visibility into anticipated costs, as well as generated revenue. It’s essential to have access to data on both revenue and costs—particularly for your finance department. Finance wants to know the expected revenue, contract terms, and the final costs of commission payouts.
With a precise picture of both sales revenue and variable pay expenses, finance can be more strategic in decision-making, increase business operations’ credibility, and lower company risk. Subsequently, your systems must give finance fast and comprehensive access to all aspects of deals in play. If you’re using an incentive compensation plan, it should seamlessly integrate with Salesforce so data can be shared across the two systems.
Pulling projected forecast data from Salesforce, for example, Xactly lets you instantly calculate sales commissions and determine the impact on earnings. Additionally, every time that your sales organization makes a change to its pipeline numbers (and as deals in the pipeline close), these numbers are automatically re-run, giving finance the very latest information.
4. Educate Stakeholders
Many people in finance don’t understand the full impact of incentive comp in motivating sales behaviors and driving higher revenue. With visibility into performance and commission data, they can make the connection and see in black and white what these dollars mean to the business – taking away the historically adversarial relationship between finance and sales.
Finance should know why the cost of closing a deal for your top rep might exceed that of a mid-performing rep if there’s an accelerator. At the same time, they also need to recognize the value of that incentive by seeing how much more revenue that top rep brings to your bottom line.
5. Use AI-powered Solutions to Increase Forecasting Accuracy
By using advanced artificial intelligence and machine learning capabilities to automate and systematize the sales forecasting process, sales leaders now have access to information they need to increase the consistency, accuracy, and reliability of their sales and plan data.
Issues traditionally felt by leadership when manually putting together projections include lack of pipeline and forecast visibility, inconsistent sales process execution across teams, and poor data quality since CRM systems and spreadsheets are rarely updated.
Solutions, like Xactly Forecasting, help organizations drive greater revenue predictability and consistency in sales processes—solving a significant concern that has long impacted enterprise sales organizations. This allows management to spend less time building and updating reports and more time evaluating, streamlining, optimizing, and improving their overall sales strategy.
To learn more about how to optimize your sales processes, check out our webinar, "Intelligent Forecasting: Call Your Number With Confidence."
This article was also published on LinkedIn by Erik W. Charles. You can view it here.