All forecasting is based only on the data from the CRM system
Even if you are using some sort of external forecasting tool, all the data it uses should be coming from the CRM system.
- External spreadsheets may be used for reporting, but not as a data entry or modification vehicle.
- Assuming that your system has a real forecasting tool, all adjustments to the pipeline, commit, and other forecasting parameters need to be recorded in the CRM. If your system doesn’t have a forecasting tool, it is acceptable to have managers’ forecasting adjustments made in the form of synthetic deals (with either negative or positive amount values).
- Again, audit trails must be on for all forecasting entries and results, whether you are using the CRM’s forecasting system or an external tool. Definitely keep these audit trail tables around for at least three years.
Forecasts must be analyzed to outlaw bogousity
Bogousity means any of these things:
- Mandated by any level of management (e.g., “your number this week will be X”). This issue is painfully fraught with politics.
- “Gamed” entries from the worker-bees (e.g., “if I move this deal into next month and that other deal into this week, nobody will notice that I’m behind”)
- Adjustments to the forecast have been made with no comments recorded or apparent changes to the underlying pipeline.
- The forecast in aggregate involves an unusually fast or optimistic close rate.
- The forecast contains no notion of probabilities or ranges: if the forecast is “just this one number,” it’s being forced. True forecasts have a high, low, and “most likely” component.
All quotas are in the CRM system, with audit trails on
- This supports “I can see everything in one place” and eases management conversations.
- This also reinforces the distinction between “your nut” (the number you need to achieve to make on-target compensation) from “the forecast” (the realistic appraisal of the deals).
All commissions are contingent …
…upon deals satisfying the pipeline criteria of the first bullet and the “anti-gaming” criteria described throughout.
And then there’s that culture thing
Every level of management needs to explicitly reward good pipeline and forecasting behavior, while visibly highlighting sloppiness and sloth. With a sales organization of any size, the culture of accurate forecasting is a key success factor and a bad culture is a nexus of failure. Unfortunately, getting this right requires consistency, patience, and time -- things that many managements aren’t very good at.
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