Even under the best of circumstances, forecasting is difficult. In order to know whether or not an opportunity is likely to be won—and by the forecasted date—you have to test those opportunities. Here are five reasons your forecast may be bogus.
There is a difference between a lead and an opportunity. A company may buy what you sell. They may spend a fortune in your space. They may have an identifiable challenge that you can solve. But until they agree that they are going to explore changing with you, you are looking at a lead. Just because they have met with you, doesn’t mean there is an opportunity.
The first way to spot a problem forecast is to look at the close dates that are tagged to opportunities. If those dates are March 31, June 30, September 30, or December 31, you have real problems. Why? Because these dates were chosen by the salesperson, not their prospective clients. Don’t base the date on the end of the quarter, but on the actions of the prospect.
How many people are involved in the opportunity? If your opportunity only has the support of one person, even a key person, that opportunity is at risk. Companies buy on consensus now. You need deep relationships and wide support if you are going to win a deal—and if you are going to forecast it. If you don’t know who's on the buying committee, you aren’t ready to forecast.
Many of the opportunities that fall out of your forecast will do so because they don’t have executive support. This is especially true for larger, more complex, or more strategic purchases. When priorities change, the opportunities with executive support survive. The opportunities without that support wither and die on the vine.
Your primary sponsor leaves and takes a new job. Budgets are slashed. A competitor you didn’t even know was being considered wins. There are always factors beyond your control which cause you to lose opportunities you were positioned to win. But it isn’t all bad news. You are also going to have new, very motivated, very dissatisfied prospects come into your forecast throughout the quarter. You can’t forecast the unexpected.
Test your opportunities against these five tests. Where they fail, go back and take the actions that will allow you to commit with no reservations.
Once your forecast is underway, it's time to start qualifying those prospects. Learn how with the free Salesforce e-book below.