Credible forecasts come from customer behavior, not sales anecdotes.
Imagine being in the Board of Directors (BOD) meeting 30 days before the end of the 4th quarter (it will be here in just a couple of weeks), and the VP of Sales is providing anecdotal information regarding the likelihood of the biggest deals of the quarter actually closing. How much confidence can the Board have in this sort of explanation, deal after deal?
The short answer is that board members don’t want to hear subjective views on deals. Instead, a simple yes or no based on objective criteria is more credible. For example, has the decision maker accepted our business case and the unique capabilities that drove it? Do we understand why the the deal is happening this quarter and the financial consequences for inaction?
Long winded explanations laced with “gut feel” are just code for “I hope the deal closes, but I really have no idea if it will close.” In all likelihood, this salesperson doesn’t truly understand how the customer buys. Is there a decision by committee with all votes equal, or is there algebraic democracy (all members have a vote and the decision maker has every vote plus one)?
Simply put, when you have a strong relationship with the decision maker to the extent that he/she has negotiated the business case with you, he/she has explained the rationale for the deal timing (compelling event) and allows you to demo last, you don’t need anecdotes during the BOD call to forecast accurately.
Focusing on the customer’s behavior tells the salesperson all he/she needs to know, and whether what is learned is objective (yes or no). The customer will divulge their buying process and their signing process if the salesperson just asks.
Ultimately, as CEO, it’s your choice: live (and die) with subjectivity in the board room, or have the discipline inherent in MOIC Pipeline Grader to deliver objective and consistently predictable results.
If your company needs help shifting from intuition-based forecasting to fact-based forecasting, sign up for a trial of Pipeline Grader at moicpartners.com.
