Bryan and I had a great time with the RevOpsCo-op folks discussing sales analytics that help you sell more. Check out the webinar.
(Article guest-written by RevOpsCo-op.)
Having a perfect forecast is great, right? Think again. If your sales forecast is right at the beginning of the quarter, something is wrong. Join Bill Kantor, Co-Founder at Funnelcast, Bryan Lewis, Co-Founder at Funnelcast, and Camela Thompson, RevOps Co-op's Head of Marketing, to find out how data can help you improve your win rate–and your forecast–over time.
Sales forecasting is not like the weather, you can use your CRM data to advance your cause. — Bill Kantor
Forecasting tool vendors make some big claims like, “Forecast your sales with 98% accuracy!” Sounds great, right? Not so fast. The truth is, if you forecast perfectly at the beginning of every quarter, your data isn’t actually helping you move pipeline forward to reach and exceed your target.
You’re measuring pipeline value and win rate wrong
PCR is like that ‘one weird trick to unlock sales metrics!’ But weird tricks are not enough. — Bryan Lewis
Ask any sales leader how they determine whether they have enough deals in their pipeline to reach their targets and they’ll point to their pipeline coverage ratio (PCR). This is the total pipeline divided by your goal/target. Typically, they’ll want to see 3X the target or more.
Logically, this makes sense. You want enough deals to account for losses and pushed opportunities. But PCR can be volatile. It ignores a lot of details like customer segment, stages, staleness, activity, and more. Poorly qualified and stale deals are given too much weight.
WOWPL
PCR isn’t the only problem. WOWPL, or “Won over (won + lost),” is a popular formula used to measure win rate. But it’s also volatile, biased, and, ultimately, not what you think it is. This method holds on to lost or stale deals for too long. You can start your quarter with an estimated win rate only to have it completely change after a data hygiene exercise halfway through the month.
So what’s the solution?
As RevOps, you’re in a position to give people mind-blowing details and advice. You already have all the data you need to do this. — Bryan Lewis
The insights you need are already in your CRM and you have more control over your forecast than you might think. Instead of relying on PCR and WOWPL, take a close look at these 3 categories:
Most impactful pipeline changes
Most impact demand generation
Most worrisome deals
Funnelcast uses real customer data (check out the full webinar for a walk-through) to show how changes to these 3 areas can affect the probability of reaching your sales target. In this example, the baseline is a 24% chance of exceeding a $2M sales target.
Here’s what changes when you focus your efforts:
Advance your 5 most impact deals = probability increases to 61%
Increase demand generation for the most impactful segment = probability increases to 80%
Dump your most worrisome, stale deal = probability decreases to 70%
By focusing on impactful changes to your pipeline, you can control and improve your sales forecast over the course of the quarter. You’re not stuck with whatever number you set in Week 1. Remember, sales forecasting is not like predicting the weather, you can control the end result!
See how to sell more. Try Funnelcast. |
Need help with the math?
Insights can help you meet or even beat your goal. — Bill Kantor
Looking for help calculating your sales forecast and win rates this quarter? Watch the full webinar to access a win rate reference and calculator as well as an A/B calculator provided by Funnelcast.
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