Fixing Forecast Accuracy: Joint Webinar with Sales Management Association
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Forecasting accuracy is a problem for sales organizations. Too often forecasts reflect little more than a sales force’s collective intuition about future results. Not the reliable predictor management needs. New approaches to forecasting are proving much more valuable. They combine technology, salesperson activities, and a focus on verifiable customer outcomes.
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Fixing Forecast Accuracy: Joint Webinar with Sales Management Association
- 1. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Fixing Forecast Accuracy The quest for the holy grail of sales confidence!
- 2. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Tim Braman Revegy, Inc. VP of Corporate Strategy
- 3. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Deal Outcomes – Forecasted Deals Only CSO Insights, Inc. 2013 Sales Performance Survey 48.6% 47.4% 46.5% 27.3% 26.1% 24.2% 46.8% 30.3% All Companies Use CRM
- 4. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Poll What tool do you use for forecasting? - SFA (Salesforce, Microsoft, Oracle, SAP, etc.) - SFA plus Excel - SFA plus Forecasting Analytics tool - Excel only - Other
- 5. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Today’s Agenda
- 6. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL
- 7. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL
- 8. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL The Smartest Guys in the Room •Sirius Decision – Jim Ninivaggi •CSO Insights – Jim Dickie •Forrester – Scott Santucci •Aberdeen – Peter Ostrow
- 9. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Context for Today’s Discussion $$$
- 10. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL It Isn’t Easy… Challenges with Forecast Accuracy Our target market is EVERYONE! Tactical vs. Strategic SolutionBuyers Engage Later
- 11. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Poll What is your biggest problem with forecasting - No common language/process - Sales Representative forecasting skill/knowledge - Lack of insight to customer behavior - Lack of Management inspection/coaching - Don’t have appropriate tools - Other
- 12. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL 46.8%
- 13. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL What is “Good” Forecast Accuracy - Top 20% 66% 76% 80% 84% 90 Days 60 Days 30 Days Immediate Aberdeen Group : “Sales Forecasting Research Benchmark” - On-time? - Amount ok?
- 14. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Why care about Forecast Accuracy? Quota Attainment Sales Cycle Reduction 17% 10% Top 20% 3% 0% 6% 7% Middle 50%Bottom 30% Aberdeen Group : “Sales Forecasting Research Benchmark”
- 15. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Forecast with Confidence – The Five Pillars
- 16. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Forecast with Confidence – The 5 Pillars 1. Ideal Customer/Qualify
- 17. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Who is your ideal Customer?
- 18. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Ideal Customer/Qualify Case Study: GE Finance • 3X win rate increase • 10,000 New Harvard Business Review, The New Science of Sales Force Productivity
- 19. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Ideal Customer – Qualify the timing Win Rate 17% CSO Insights, 2013 Global Sales Performance Optimization Study
- 20. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Forecast with Confidence – The Five Pillars 2. Sales Process
- 21. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Stage (SFA-%) Identify (Lead – 0%) Qualify (D – 25%) Develop (C – 50%) Proof (B – 75%) Close (A – 90%) Objective Is this a prospect? Is there an Opportunity? How do we help? Prove our Value Get Ink! Critical Success Factors • Validate customer’s current business challenges and key initiatives • Understand customer’s landscape and our potential partners • Determine key stakeholders, evaluation criteria and decision-making process • Develop latent pain /use Challenge/provocatio n message • Conduct initial executive meeting • Confirm executive commitment and critical success factors • Identify competitive landscape • Determine potential solution fit • Develop initial sales strategy with account team & management • Conduct discovery workshop • Develop our unique value propositions (UVP) • Confirm solution fit with key stakeholders • Create solution presentations and demonstrations • Test / Refine the solution presentation with our Coach • Present OUR solution to key decision makers • Integrate implementation, training and support teams • Provide references or conduct POC • Submit value-centric proposal • Confirm final decision process and timing • Gain customer commitment and finalize legal agreements / timelines • Obtain internal approvals • Process Contract/Purchase Order • Conduct transition meeting with Professional Services and support teams Sales Process
- 22. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL DiscoveryQualification Solution Development Short List Selected Qualified Opportunity Signed Agreement Solution Aligned with Customer Needs Selected as one of FinalistsDemand Generation StageGoalDefinitionToolsMilestones Sales Process • BDR pre-qualifies from marketing campaigns. • BDR and AE prioritize Top Prospects • BDR sets up further qualification and discovery calls. • BDR and AE identify key stakeholders • Contact prospects and customers to qualify budget process, time-frame, decision-makers and influencers, decision/ procurement process. • Team gathers information to understand customer’s objectives. • Further qualification of key decision-makers/ stakeholders, buying criteria and technical requirements. • Professional Services engaged. • AE works with team to develop the solution • Create customer-centric demonstration • Conduct demonstration/presentation • Create proposal and customer • Review proposal with key stakeholder • Validate Short List • AE and team make final proposal adjustments • Conduct necessary ‘Proof’ activities • Reconfirms customer’s decision and procurement process. • Negotiate Business Terms • Gain internal stakeholder approvals (legal and finance) • Manage customer procurement cycle • Identify potential risks • Obtain contract signature and Purchase Order • Territory Plan • Account Plan • Ideal Customer Profile • Marketing Campaigns • Value Message • Qualification Checklist • Whiteboard • Call Plans • Whiteboard • Overview Presentation • Win/Call Plans • Value Map • Joint Evaluation Plan • Demo Scripts or Standard Presentation • Opportunity Win Plan • Value/Relationship Map • Proposal Templates • Joint Evaluation Plan • Opportunity Win Plan • Value Map • Statement of Work • Contracts • Statement of Work • Implementation Plan • Lead generated by BDR, AE and/or AM • Or, Marketing scores the lead (0%) • Opportunity identified • Or evaluation is underway • Project is funded • Value Map Completed • CSF’s confirmed with executive • Demonstration/Presentation delivered • Proposal reviewed with executives • Notification of short list • Proposal submitted • Proof conducted • Decision pending • Verbal commit • Contracting process identified • Agreement on contract terms and conditions Pipeline Upside Commit Lead Understand Requirements 0% 5% 20% 40% 75% 90%
- 23. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Your Sales Process in SFA
- 24. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL So What’s the Problem…
- 25. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Start with Sales Process Closed Qualify Discover Develop Solution Propose Negotiate Sales Stages
- 26. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Add Best Practice Activities Collaborate on the Evaluation Steps! Do we have Access? How will the Customer Measure Value? Which Stakeholders Vote on the Final Decision?
- 27. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Collect the Reward! Closed Qualify Discover Develop Solution Propose Negotiate Sales Stages Sales Process Win Rate No Process 38% Semi-Formal 46% Formal 48% Dynamic 52%
- 28. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Align with Buying Process Awareness of Issue Prioritize Explore Possible Solutions Evaluate Vendors Select Vendor Negotiate Buyer Stages StartClosed Qualify Discover Develop Solution Propose Negotiate Sales Stages
- 29. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Test Progress with Evidence ClosedStart RFP/RFI Issued Presentation/ Demo Request Short Listed Legal Review Pilot Web/Social Activity
- 30. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Why implement process? Aligns to Customer Buy Cycle Win Rate Poor 43% Average 47% Excellent 60% CSO Insights, 2013 Global Sales Performance Optimization Study
- 31. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Forecast with Confidence – The Five Pillars 3. Sales Tools
- 32. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Build a Plan – Begin with the end in mind Receive ValueDeployDeliverSign Contract Vendor of Choice Finalists SelectedTODAY Date Why Who KPI Metrics Source of Urgency Approval Process Decision Process Evaluation Process
- 33. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Collaborate on the Plan Activity Week of Discovery Interviews – Prospect Technology Team 29-Jul Discovery interviews - Prospect Finance Team 5-Aug Summarize findings and prospect agreement 12-Aug Collaborate on Plan/Timing for Evaluation 19-Aug Capture KPI/Metrics Current State 26-Aug Develop Implementation Plan 2-Sep Agree on preliminary success criteria 9-Sep Submit contracts to legal 16-Sep Gain legal approval (Terms & Conditions) 23-Sep Present proposal for approval 30-Sep Final negotiations 7-Oct Contract Signed/Purchase Order Issued 14-Oct Implementation Kick-Off 21-Oct Go Live Date 15-Jan Measure Success 22-Jan
- 34. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Build a Plan – Watch for Bear Traps - Procurement - Board Approval - Security Reviews
- 35. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Map the Decision Makers ✔ ✔
- 36. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Value tools and Negotiation Plan P&L Reduce Sales Expense 5% Increase Sales Volume 5% Decrease Discount 5% Sales 100.0 100.0 105.0 105.0 Cost of Goods 60.0 60.0 63.0 60.0 Gross Profit 40.0 40.0 42.0 45.0 Fixed Costs 13.0 13.0 13.0 13.0 General & Admin. 11.0 11.0 11.0 11.0 Sales Expenses 6.0 5.7 6.0 6.0 Profit Before Tax 10.0 10.3 12.0 15.0 Profit Increase 3.0% 20.0% 50.0% Harvard Business School Publication #9-192-098 rev 7/9/92
- 37. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Forecast with Confidence – The Five Pillars 4. Coaching
- 38. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL What is coaching? 38 Manager: Frank, I’m concerned about your forecast Frank : Just submitted the final proposal to XYZ, I’m confident it will close this month
- 39. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL What happens at the point of the Spear? 43% 47% 52% 0% 20% 40% 60% Poor Average Excellent Proactive Coaching CSO Insights, 2013 Global Sales Performance Optimization Study
- 40. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL When to Coach Closed Qualify Discover Develop Solution Propose Negotiate Right Deal? Can we Win? Will it Close on Time?
- 41. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL RepForecastSkill Trust but Verify Coach Priority #1 Monitor Ignore Prioritize your coaching
- 42. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Forecast with Confidence – The Five Pillars 5. Analytics/Metrics
- 43. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Why analytics and metrics? 43 44.30% 51.80% 54.80% 70.40% 40% 50% 60% 70% Win Rates Reps Achieving Quota No Analytics With Analytics CSO Insights, 2013 Global Sales Performance Optimization Study
- 44. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL What to measure • Average Deal Size • Time to Win/Lose a deal • Qualification Score to Win/Loss • % of Outcome/Evidence to Win/Loss • Velocity/Dropout between Stages • Average Discount • Forecast Accuracy 44 New vs. Existing Deal Size – Small vs. Large Customer Size – Small vs. Large
- 45. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Average Sales Cycle – New vs. Existing Customer CSO Insights, Inc. 2013 Sales Performance Survey
- 46. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Sales Process Dynamics Opportunities Exiting Process Leads In 60% 48% 22% 10% Discovery Propose Negotiate Closed Won Qualify 90 Days 46 Days 32 Days 39 DaysStage Duration
- 47. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Don’t get Siebel-ed Deal Forecast Percent Amount Deal #1 75% $1,000,000 Deal #2 75% $1,000,000 Forecast Amount ??? Forecast Percent vs Forecast Category 10% Omitted 25% Pipeline 50% Upside 75% Commit 90%
- 48. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL
- 50. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Which reps are following the sales process?
- 51. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL VP of Sales – WIIFM? 0.00% 5.00% 10.00% 15.00% Trusted Forecast All Others Aberdeen Group – Sales Forecasting Benchmark Report Average Revenue Growth Rates
- 52. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL • Understand your ideal customer and when they buy • Create an evidence-based, buyer-aligned forecast • Leverage tools to plan and win • Change Sales Managers from “flogger of the forecast“ to “Sales Coach” • Leverage key metrics into forecast reporting Forecast with Confidence!
- 53. COPYRIGHT © REVEGY, INC. // PROPRIETARY AND CONFIDENTIAL Questions? Tim Braman VP Corporate Strategy tbraman@revegy.com Revegy www.revegy.com