It’s the beginning of a new quarter and you’ve finished your sales forecast for next month. You leave for a short vacation, expecting everything to be just fine when you return.
However, when you get back, you discover you’re well behind.
Your team is only trending 70% of what was forecasted. How are you going to explain that to your superiors?
Right now, the only way to figure out what happened is to run a new report from your CRM, export it to Excel, and compare each line item to an earlier report to see which deals were dropped or pushed back.
It’s a painfully tedious process and a perfect example of why pipeline analytics are so useful.
Which deals will close this quarter?
Analytics can track all your opportunities and use historical performance of past opportunities to determine the likelihood of a deal closing this quarter.
This allows for greater pipeline visibility. CEOs, VPs, directors and managers can all look at the levels below them and drill down into the specifics of each opportunity. They can see which opportunities are at risk and why, based on things like how long an opportunity has been in its current stage and if this deal has been pushed back before.
It also allows sales leadership to see if reps are backfilling their pipe with new deals to make up for lost opportunities.
Without these kinds of tools, sales managers wouldn’t have any idea what’s causing them to fall behind with enough time to make the necessary adjustments and stay on target.
Identify the real risk levels in your deals
It’s next to impossible for managers and sales leadership to stay in the loop with every opportunity.
There are simply too many things going on with every opportunity to keep track of a very fluid pipeline.
To help counter this, managers should be having regular discussions with each of their sales reps.
These conversations are vital in helping sales managers and directors stay up to date on which opportunities are in the pipeline and where they stand.
Ultimately, sales forecasts are built based on these conversations.
Unfortunately, it doesn’t always work as it should. While conversations between reps and managers have always been a part of sales, they aren’t an exact science.
Most sales conversations rely on the instincts of the sales rep, and even if someone has years of experience, intuition isn’t perfect.
A rep can be absolutely certain a deal will go through and still be left empty-handed at the end of the quarter.
That’s why data is so valuable. While these conversations are possible without it, they are often imprecise and costly.
Conversely, a much more effective approach is to have a data-driven discussion about your pipeline.
Personal opinions can be full of biases, whereas data is objective.
A rep might say a deal is a slam dunk because he or she felt the conversation went great, while the data might suggest the deal is risky because the conversation didn’t include a key decision maker at the organization.
Data can reveal a number of important insights based on past information.
Pipeline analytics built on data and a predictive engine can use information from past deals to determine whether or not opportunities are likely to close, but also, why.
So while a sales rep might have a strong gut feeling about a particular deal, if the data indicates that opportunities that haven’t been contacted in over a week don’t typically close, and this particular opportunity hasn’t been contacted in 15 days, you might want to reconsider including it in your forecast. That’s just one example of the types of insights this kind of technology can provide.
These insights can also help a manager discuss the right steps to save a deal. If a deal is unlikely because someone doesn’t have budget, instead of pushing it back, maybe you can offer a discount if they purchase early, helping you reach your number in time.
A more accurate forecast through pipeline management
A poor forecast harms the entire business.
One of the quickest and easiest ways to solve forecasting inaccuracies is to use data to improve how you manage your pipeline.
Data will allow you to have more meaningful conversations with your reps and determine which deals are likely to close with more confidence.
Data also provides sales leadership with deeper insights into each deal, clearly showing why certain opportunities are risky, and which steps can help close a deal on time.
To learn how you can manage your sales pipeline more effectively, download the free white paper below.
Free White Paper: Applying Data Science to Sales Pipelines for Fun and Profit
This whitepaper presents an overview of our predictive sales technology for two specific problems: opportunity scoring and forecasting.
- HD Data Fuels Success Across Your Entire Sales Funnel
- How Predictive Lead and Account Scoring Fuels Sales Efficiency
- How Prescriptive Sales Activities Optimize Your Sales Process
- Use Prescriptive Opportunity Scoring to Win More Deals This Quarter
- How Predictive Forecasting Can Improve Forecast Accuracy
- Customer Success: The Next Generation
- Put an End to the Lead Generation ‘Groundhog Day’ Loop