4 Tips to Take the Stress Out of Forecasting

Stressed salesperson in forecast meeting
Erik W. Charles
Erik W. Charles
In Finance, Incentives, Sales Performance, Trending
Erik Charles is the Vice President, Product Marketing, at Xactly Corporation where he is responsible for driving the product strategy, defining the product vision, and developing a strong team of product owners and designers.

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. For 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.

Furthermore, although they might not be seated at the table, finance is watching your sales forecast – and you know that you’ll be meeting with them next. There’s nothing finance dislikes more than uncertainty.

The forecasting meeting doesn’t have to be as painful. Following are a few simple ways that sales leaders can take the stress out of the pipeline-forecasting meeting and make the experience more successful for everyone.

1. Be Prepared

There should be no surprises at the forecast meeting. You need to walk through the door knowing 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

To forecast accurately 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 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 credibility of business operations, 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 what these dollars mean to the business – taking away the historical 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



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4 Tips to Take the Stress Out of Forecasting

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