There is only one way to ensure that you have an accurate sales forecast. You don’t need software, and you don’t need dozens and dozens of questions. A single question will suffice to provide you with all you need to know about the accuracy of your forecast. That question is this:
“What date did the prospective customer select for their ‘go live’ date and why?”
Close Dates Mean Little
Closed dates are relatively meaningless. Anything with a month ending date should be discounted on principle. Your prospective clients don’t select a “go live” date or a “deal ink” date by looking at the last day of the month.
If the last day of the month is bad, then the last day of the quarter is even worse. The last day of the quarter is a day only sales organizations care about. Your prospective client did not choose that date, and the one thing you can predict with absolute certainty is that they have no idea that the last day of the quarter is the forecasted close date in your CRM.
Stages Mean Even Less
The stages in your sales force automation software are meaningless. It doesn’t matter whether the stage is negotiation or acquisition or some other stage deep in the sales process. Regardless of what the stage is indicated in your CRM, the customer is still controlling the date the deal closes. You can’t close without them.
The percentages attached to your stage are also meaningless. First of all, they probably do not reflect an accurate percentage based on stage if you were to look at your past wins and losses. Second, an opportunity with two competitors has only a 50 percent chance of winning; it can’t be 90 percent. The stage of your sales process is not a particularly accurate indicator.
The Only Date That Matters
If you expect the customer to close on a certain date, shouldn’t they be aware of that date? Are they going to be surprised when you ask them for their business and show up with a contract and a pen? Should they not have something on their calendar indicating that they are signing a deal or going live with your solution?
Could you acquire and agree on a date and still not have an opportunity close on time? Absolutely. But if you want forecast accuracy, you ask for the date to which the customer has agreed.
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Filed under: Sales