Have you ever wondered how the greatest CRM company in the world does their forecasting? If so, it’s your lucky day. I’m going to tell you exactly how Spiro does their sales forecasting, so you can be (almost) as awesome as we are.
One of the most important parts of sales management is building out a strong pipeline and being able to forecast against it. And who better to teach you how to generate a sales forecast than the industry experts? Forecasting is a key component to sales managers’ success, and Spiro has built-in product functionality and dashboards and generates reports to help managers forecast accurately and easily. First let’s step back a bit, and start with the basics on forecasting.
The Problems with Bad Forecasting
Bad forecasting is about as useful as screen doors on a submarine. However, a bad forecast, if identified early enough, can show holes in your overall sales process. You can then adjust for to hopefully get a proper forecast. There are some common issues that may arise that could negatively affect the forecast. These are known as “barriers.” The following are a few barriers that will keep you from forecasting well:
- Sales reps not updating data on accounts
- Over or under-valuing deals
- Dead deals not being dropped
- Deals slipping through the cracks
Many of these issues stem from management. A great sales manager needs to have their eyes on all their reps’ deals. Managers need full visibility into what their reps are working on so that they can coach them if needed, or perhaps push them to work harder. Sales managers also have superior knowledge and experience when it comes to forecasting. This means that they need to work directly with the team maintaining updates, because it affects the sales pipeline itself.
The Benefits of Good Forecasting
Conversely, a sales manager who nails their forecast is often revered as a guesstimation genius, as many people still believe that forecasting is just a bunch of random estimations. But, we need to give credit where credit is due. Forecasting involves a great deal of work and planning based on existing data. This is one of the reasons Spiro’s sales automation CRM is ideal, because it has the ability to accurately forecast for you. Some examples of the benefits of good forecasting include:
- Using more accurate data
- Managers that are aware of what their reps are doing
- More closed deals
- An improved sales process
A sales forecast provides the overall company with expectations for cash flow, how much product they need to be producing, and how to manage and lead the company into the future. Forecasting helps company leaders make decisions on many aspects of company life, from budgets to bonuses and beyond.
Learning to Forecast Better
As Spiro grew from its infancy into the incredible product it is today, our database of customers and prospects grew as well. We were hiring new reps and renewing current clients, but we also needed to nail down our forecast if we were going to secure funding from investors. We are continually evolving our product to forecast better and improve Spiro to include what we believe is important in producing an accurate forecast. Here are a few things we feel are key to proper forecasting, and how we incorporate them at Spiro:
Eliminate human bias. One of the best ways to have an accurate forecast is to ensure that your reps don’t lose sight of a deal that is on the back-burner. This may seem logical, since no sales rep wants a deal to fall through the cracks, but sometimes human emotion plays a role in who sales reps are actually calling and following up with. Just as people prefer to buy from people they like, the same is true on the selling side. We are more apt to call someone we get along with. But, that prospect doesn’t necessarily give us the best chance of success. We discovered that we could utilize artificial intelligence (AI) to produce proactive recommendation to reps that are prioritized based on data, not emotions. AI helps us cut through all our data and automatically rank our deals by high, medium, and low-priority, which helps us focus on which prospects can bring us the most success, let us reach our quota and forecast accurately.
Use priority, not probability. The majority of sales strategies I have come in contact with base their forecasts on the probability of a deal closing. But, like your mom used to say, “if everyone else jumped off a bridge, would you do it too?” Don’t get stuck using the wrong approach just because . Instead of putting such weight on the probability of a deal closing, Spiro assigns each open opportunity a priority value, then calculates our forecast accordingly. We then tailor our personalized recommendations of who each rep should call based on priority and which deals need attention to keep them moving forward faster.
Align your team.The only way a team is going to forecast correctly is if all members work together, as everyone’s closed deals are going to be the highest priority opportunities that will get the team to its sales goal. At Spiro, we wanted our sales managers to have complete visibility into all the deals their reps were working on. That manager can then move deals around to see where the focus needs to be to meet the quota. The whole team can then see reports on what deals need to happen to make their goal. Focus and team alignment have been key to accurate forecasting at Spiro.
Work from the top down. As mentioned earlier, if you want to have an accurate forecast, you need to have an accurate pipeline. To do this, we at Spiro start from the top and work our way down. First, we set our overall quota. Then, we use a priority-view screen to drag and drop opportunities from one ranking to another, and…voila! We can automatically view how that will affect the chance of us hitting our quota. Working from the top down allows you to have control over the deals going through your pipeline, delegating priorities to reps, and maintaining your sales team. Now that’s efficient.
Not every workplace operates like we do at Spiro. But, if you have a sales pipeline and you try to replicate how we do our sales forecasting, you will see positive results. Spiro’s CRM helps to make even the most difficult forecasting manageable. Check it out for yourself!