In the market for a sales forecasting tool? While it may seem as simple as picking whatever tech your friend uses at their job, the truth is that without taking into consideration the prerequisites below, you may be looking at a shiny new piece of software that’s collecting dust.
Here are the three most important questions you should be asking when evaluating sales forecasting tools.
Is Your Data Ready for a Forecasting Tool?
Here’s the truth: if you’re already struggling with CRM data quality issues, it won’t matter what sales forecasting tool you choose—because it won’t work. Much like your CRM, the concept of “garbage in, garbage out” applies here, too.
Just consider the role that data plays when forecasting, especially sales activity data. When you have limited or no visibility into who your reps are engaging with or what activities are happening across their accounts, how can you possibly make an accurate judgment call let alone forecast?
It’s clean, reliable data that fuels sales forecasting tools to deliver accurate results to the business.
Here’s the good news: you’re not alone when it comes to data quality issues. One Gartner survey reported that organizations believe poor data quality is responsible for an average of $15 million in losses each year.
Save yourself (and your Ops team) the headache of ripping and replacing tech because of bad data. Instead, make data quality your priority ahead of any big purchases. Not only does this ensure you’ll get the results you’re after, but that the tech you’re buying is delivering on the ROI you expect.
What Priority Does Forecasting Hold in Your Tech Stack?
Typically speaking, a sales tech stack looks something like this:
First, you've got the CRM serving as the foundation. By far the most expensive piece of tech in the stack and will ultimately take up the most considerable portion of wallet share. That leaves sales teams with enough budget for roughly 3-4 core sales productivity tools.
Trying to solve the productivity challenge with only a handful of apps to choose from is no easy feat, especially considering the size of today's sales tech landscape. So it's not surprising that so many sales teams have chosen to fill one of those slots with their forecasting tool. Too bad that can't solve the real problem.
To truly deliver on productivity and consistently increase revenue per rep, sales teams need to leverage both lagging indicators that make up a sales forecast with leading indicators that proactively identify risk and allow teams to course-correct ahead of time.
Are You Focusing on the Metrics that Matter?
Traditionally, sales leaders have looked at past outcomes, i.e., lagging indicators, to judge how well their team was performing and whether they were successful. Some examples can include:
- Quota attainment
- Number of deals won
- Number of deals lost
- Average deal size
- Average deal length
The ironic thing is that even though lagging indicators are supposed to be a benchmark of success, they don’t do anything to guarantee it.
By leveraging leading indicators, rather than just focusing on lagging, you’re able to see much further down the road, whether it’s quarter or year-end, to gauge whether you’ll hit or miss targets. That’s because leading indicators are all about the early activities that translate into pipeline generation and maturation, not just results.
How many meetings have your reps had in the last seven days? How many were new business vs. existing customers? And the million-dollar question: what are they doing today to influence next quarters’ opportunities? Leading indicators can surface the answers to these questions, helping not just give you a clearer picture of the road ahead but the ability to pinpoint what activities drive the highest impact.
Increase Forecast Accuracy with People.ai
Miller Heiman Group research finds that fewer than 20% of sales organizations have forecast accuracy of 75% or greater.
With People.ai, sales leaders can not only increase the accuracy of their forecasts but discover what needle-moving behavior separates their top performers from the rest of the pack. That’s because People.ai is the only revenue operations and intelligence platform that’s able to turn activity and contact data into actionable insights that help managers proactively spot risk, coach reps, and drive results.
Learn more about how People.ai can help you drive predictable results quarter after quarter.
