5 Conversations Necessary to Making Your Forecast
Forecasting isn't easy. Even if you try all the common tactics, like having three times more opportunities in the pipeline than you need to reach your goal in a quarter, it still isn't easy to get forecasting right. And like everything else in sales, shortcuts only tend to make things worse. Some sales organizations try discounting to move deals forward, not recognizing that a lower price isn't what is motivating change. Nor is it addressing the internal conversations they must have to agree to move forward at all.
Even if you inquire about every opportunity every day, it has no impact on the forecast itself. There are, however, conversations you can have that will improve your forecast.
Asking the Client Their Desired Go Live Date
Much of the time, the date the client would like to go live is a date that drives all the milestones between the time you ask and the time they go live. If you need 60 days from the day the client signs the contract in order to implement and begin executing their solution, you now have the information you need to ask the client whether they can work on that timeline.
The client's timeline is a more accurate guess, even though it still contains an opportunity to push. That said, it's much better than an uneducated guess as a placeholder in your CRM.
Asking the Client to Commit to Providing resources
In some cases, when what you sell is complex and requires information and analysis, being able to move forward in the process requires the client provide you with information. Someone has to acquire that information and provide it to you. Asking the client to commit the resources to provide you what you need to create and present a solution gives you an indication as to whether or not you're going to be able to keep a deal on track.
Missed commitments on the client side, especially when it's something as easy as providing information, may be an indication as to how well they're going to keep greater commitments in the future. If you are unwilling to ask the client to commit to providing those resources by a specific date, trying to close their business by an artificial date that a salesperson put in the CRM isn't going to be any easier.
Asking the Client About Their Process
We spend a lot of time talking about our sales process and the importance of doing all the things we need to do to create and win an opportunity. I am sales process agnostic, believing they all have value while recognizing they are mostly an orienting generalization; they are a map and not the terrain. A large part of how well things go as you work through your process depends on how much you know about what the client has to do on their side. More often than not, you'll be surprised to find out that the client hasn't really thought through all of the things they need to do on their side. In The Lost Art of Closing, I wrote about commitments like collaboration, where you tailor your solution for the client, and consensus, and you bring in the stakeholders who are going to be impacted by a decision to change to get their buy-in.
Asking the client about what needs to be accomplished on their side massively increases the odds of building a plan they can agree to and one that you can help them manage. This will improve your forecasting.
There are also conversations you need to have with your salespeople.
Asking the Salesperson Whose Date
If the date a deal is projected to close is the end of the month at the end of a quarter, those are salespeople dates, not client dates. Clients don't tend to think they need to sign a contract the last day of the month or the last day of the quarter, and when they do it's because they know you are likely to cave-in on your pricing. Salespeople use dates as placeholders, believing they can close the deal by that date. Mostly, they are wrong. This is why dates shift around quite a bit, and it takes us back to the first conversation, the one in which we ask the client what date they would like to go live.
Your client has no idea what your timeline is, and so there is no way they can be committed to the dates that you are looking at, as they lack any awareness of that date.
Asking the Salesperson What Still Needs to Happen
Having a conversation about what needs to be accomplished between the date you're having a conversation and the date you are forecasting the client's deal to close will give you some idea as to how close you are to being on course, or more likely, how far off you are. When there has been no collaboration, no consensus, no review of the solution, and no conversations about what execution might look like, you are right to be skeptical about the date being forecast.
If you want to improve your ability to forecast, these five conversations will help you tremendously. More still, they will help you understand where you are when it comes to reaching your goals, and what you need to do about it.
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