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Sales Ops Should Answer This “Loaded” Forecasting Question

In the on-demand webinar, Developing Better Forecasts, we explore what leading sales operations are doing differently to produce sales forecasts that far more useful and effective. While the webinar highlights a number of distinct strategic and tactical differences in how leading Sales Ops teams’ approach forecasting, these differences all tend to work together to answer one extremely “loaded” question:

“How do we close the gap?”

First off, you’ll notice that this question assumes there’s a difference of some kind…a gap. The gap being referenced is the difference between reality and aspiration. While far too many sales forecasts will magically end-up matching the stated goals, it’s much more effective and useful to keep these two concepts separated.

In other words, while the sales goals and targets will reflect the desired outcomes, the sales forecast should reflect the most likely outcomes.

To create this view of reality, Sales Ops will very often combine quantitative data with qualitative input. They’ll analyze lead-gen and pipeline data using historical close-rates and cycle-times, deal-type stratifications, and so on, to estimate yield and timing. They’ll then work to reconcile and refine this data-driven view with the “bottom up” perspectives provided by individual salespeople, as a way of capturing things that may not be entirely reflected in the data. (Gosh, I wonder how that happens?)

1. The gap is finally exposed when this reality-based sales forecast is compared to the more aspirational sales targets.

Of course, just recognizing the magnitude of the gap between what you want to happen and what will most likely happen if nothing changes is extremely valuable. Sales operations that blur the lines between forecasts and goals are often blissfully unaware of the gap until it’s far too late to do anything about it.

2. Which brings us to another part of this very loaded question…the part about closing the gap…

Answering the “how” requires sufficient understanding of root-causes to prescribe effective corrective actions. Beyond just knowing that there’s a gap, Sales Ops should also be able to explain why it exists. Is it a broad-based deficiency resulting from ineffective lead-gen and pipeline development? Is it localized to a particular territory or set of sales managers? Have close-rates or cycle-times on certain types of deals changed for some reason? Have certain reps been remiss in their follow-up and cultivation efforts? Is there a coverage or headcount issue?

With a solid understanding of the causal elements, Sales Ops can then recommend the best courses of action…specific things to do differently or things to do more of…to close the gap. Should certain people receive a swift kick in the motivation? Do others represent timely “training opportunities”? Are there certain types of deals that the team should seek more of…or stay away from? Which activities will be most productive to increase? Is there something marketing needs to do differently or more of? Does a fire need to be lit under recruiting and onboarding?

3. Inherent to the loaded question, there’s also an unspoken time dimension…

Certainly, you want to help identify and close the forecasted gaps in the short term. The urgency associated with the current period is a constant, of course. But Sales Ops should also be thinking about future periods. While duct-tape may have to suffice in the near-term, are there more systemic solutions that could and should be deployed for the future? Are the near-term gaps merely symptoms of chronic underlying issues that require more sustained effort to correct once and for all?

As you can see, this rather succinct and seemingly innocuous question—“How do we close the gap?”—has a whole lot packed into it. And by working to answer this loaded question, Sales Ops can take their contributions to the forecasting effort to a whole new level.

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