Myth #1: All Forecasting Requires is Giving “The Number” to Your Boss Once a Week

By Michael Lock

Thinking about what’s changed in the world of sales, I’ve formulated a list of ten things that were once true, but that have become myths in today’s environment. I’ll share them with you, one at a time over the next few weeks before Ascent, starting with today’s post.

In the past, sales forecasting was about using your best sales intuition and knowledge of your prospects to provide “the number” in the weekly sales meeting. The all-important forecast was a single number––meant to be a quick look ahead to guesstimate which sales would close in the near future. After some verbal scrutiny in the weekly sales meeting, the  number would get forwarded to the CEO and the CFO, and that was that. It was only after the quarter’s close that sales leaders would conduct a full business analysis, usually at a QBR held at a winery or a golf course. In that era, executives used data from previous quarters to make decisions but had no access to real-time information about sales performance.

Those days are gone. Today, just calling the number is not enough––business has sped up, and industry has become hyper-competitive. In this environment, the forecast plays an entirely different role. It must reflect real-time data about what is happening with the business right now!

Stakeholders need real-time data at a level of detail that enables them to adapt and fine-tune strategy. In today’s world, the forecast is more than a single number, its many numbers. While maintaining an overall forecast, the CRO also needs to understand what’s going on across many dimensions: geography, product, business segment, industry, revenue type, sales type, etc. The list never ends.

So why am I telling you this? I have been running sales organizations and forecasting for 30 years, and I was used to the old paradigm. All that changed when people from across the organization started showing up in my office to get the forecast.  A parade of product managers, services managers, industry managers, supply chain managers, support managers, and competitive market managers wanted real-time data about what was selling.  If I didn’t have good answers for them, they got a CRM license and started running reports against “my system.” I knew that I would have to get better.

Enter real-time sales visibility. Calling the forecast “the number” is a myth today because as the CRO, the very person calling the forecast is the most important customer of the forecast. You need the data in real-time, with a multi-dimensional view, so that you can make real-time adjustments. You can’t wait until quarter-end to course correct or reallocate resources. If a region is doing poorly, you’d better do a mid-quarter business deep dive. If a product is failing to meet its goal, you’d better get the product managers in your office to diagnose and fix the problem. If a particular business segment is doing well, you’d better allocate more resources quickly so that you can capture the opportunity. If you are doing well in “upsells,” but new business is struggling because of a new competitor, you’d better get the competitive marketing team in your office to figure things out.

Today, the forecast is a real-time view into the revenue engine of your business. You can’t afford to be without an accurate, multi-dimensional, granular view of what is happening right now. The CEO and CFO are not the prime consumers of forecast data because every part of the organization relies on the data to plan and realign their departments to changing market dynamics. And, let’s not forget that you, as the CRO, are in a real-time hot seat. You need real-time data more desperately than anyone else.

See how Aviso can help you.