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Sales Forecasting

Every sales organization has a sales forecasting process in place. This is usually done in a meeting or on a tele-conference.During this call each sales team talk about how much sales closure do they each expect for the week, month or quarter.

This is also the meeting where senior sales managers (2 or 3 levels above the sales executives on the road) want to know the status of the pipeline and determine if they will be able to achieve their sales quota for the respective period, as they are measured on delivering their sales quotas.

Typically, everyone in the sales team is present on these meetings – from the sales executive on the road to the Head of sales and everyone in between.

These calls were very important or sacrosanct for the senior sales executives to be able to determine the health of their pipeline.

However, with the advent & large scale adoption of the different CRM systems in each organizations, these calls are no longer necessary as the CRM can help the senior managers to get the same information from the system.

These forecasting calls or meetings are still held in almost every organization. Why? There could be multiple reasons for this.

  1. Inertia: No one ever questioned the need for these calls or meetings, even when the CRM systems were put in place.
  2. Trust: Sales leaders did not trust the information in their CRM system. This could also explain why CRM could never fulfill its true potential – transform the sales organization.
  3. Pressure: Sales leaders also use this call to motivate their sales teams (more likely, apply more pressure). They could never do that through the system. In some cases, applying more pressure works but is usually counter-productive and in the long term is never good for any organization.

Do you still need these forecasting calls/meetings?

In my opinion, you could do away with the forecasting calls totally. Instead, I would recommend that they be transformed into the following:

  1. Trust: Sales leaders need to ensure that their teams know that they are expected to maintain and manage their pipeline in the system being used (CRM or otherwise). That the status in the pipeline is always up-to-date. This is a culture that will lead to the system being more trustworthy and transparent. 
  2. Coach: Sales executives could use these calls instead to seek assistance or inputs from the senior managers on handling a specific sales scenarios or seek their help in closing specific deals. The sales leaders can use these call to coach their teams so that everyone benefits from their experience.
  3. Culture: By building trust & coaching their teams, sales leaders can build a culture of trust and high-performance.

We also know that forecasting accuracy is never high enough for us to consider them as critical. Also, every sales manager that I have know thinks and wants to improve the accuracy of such forecasts.

Accurate sales forecasts is an oxymoron.

I would however, recommend that you should do away with your forecasting calls/meetings and rely upon your system to monitor the health of the pipeline.

What do you think? Do share your thoughts on this topic by commenting below or tweeting your thoughts to me at @rmukeshgupta.

PS: You could also look at my thoughts on Sales Review Meetings and sales quotas.

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  1. Maarten de Vries
    April 8, 2013 at 12:38 pm

    Very interesting idea! It reminds me a bit of total quality mgt approach in manufacturing. If you do things right in the first place (i.e. the sales are managing the deals well, and the managers are coaching them on it), there is no need for quality inspections and rework at the end (forecast calls). You could, however, use simple things like “visual control” (see Wikipedia) to make sure everyone is aware of the status at all times.

    • April 8, 2013 at 12:39 pm

      Superb analogy! You’ve hit the nail on its head! Thanks for sharing your thoughts..

  2. Harish M
    April 8, 2013 at 3:31 pm

    Quite an interesting & a debatable thought for sure, In my opinion doing away of forecasting meeting would be dependent on the type of industry . A set up where it is only one line of products that are manufactured within a time frame the process can be discontinued by giving way to Trust & Coaching .In case of set ups wherein products are customised according to the customer needs, forecasting activity will be critical and cannot be done away.

    • April 9, 2013 at 5:08 pm

      Thanks for sharing your thoughts Harish. In my opinion, the only purpose for a forecasting call or meeting is for senior management to gain visibility on the pipe and course-correct if required. This can be achieved if everyone in the team maintained the up-t-date status in the CRM or similar system.

      The senior leaders can then decide which sales executive to talk to if needed and can engage with those folks alone. This way, we save a lot of time and the effectiveness of the meeting is enhanced significantly as it is a one-to-one conversation which can then be turned into a coaching session by the senior leaders if required.

      Doesn’t depend on the industries or the kind of solutions we speak about. This can work in large software deals and also in a direct selling scenarios as well.

      These are my thoughts and opinion on this topic 🙂 I guess a lot also depends on the sales leaders and their trust levels wiht their teams keeping the system up-to-date. This can only come by practice & depends on the culture that they want to set in their teams.

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