RevOps Co-op Weekly #10 - Rethinking your 2021 Revenue Forecast
We know, we know. You sat through painful Zoom meetings with finance and settled on a forecast. The last thing you want to think about right now is revising your revenue forecast...again.
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Rethinking Your 2021 Revenue Forecast
We know, we know. You sat through painful Zoom meetings with finance and settled on a forecast. The last thing you want to think about right now is revising your revenue forecast...again.
But if you used the same forecasting method you’ve relied on every other year, you may be missing the big picture.
What We Know
When the pandemic first hit, many of us (minus epidemiologists) thought we would be looking at taking extra precautions for a few weeks. When it became clear the virus was on the loose in the United States and moving quickly, some business leaders panicked. Before understanding how buying behavior would change, they slashed budgets and laid-off employees.
Clearly, some industries continue to be hit extremely hard. On the flip side, some industries have thrived during the pandemic. These industry trends align with common sense (except roller skates...we still can’t figure that one out), but trends have not been consistent nationwide. Buyer behavior has varied by a region’s political leanings and Governor’s orders.
What the last nine months have shown is we're not going to flip a switch and go back to "normal."
People are adapting, and companies must do the same.
The Keys to Adjusting a 2021 Forecast
Start Smaller & Build More Than One Plan
2019 feels like a lifetime ago. I didn’t appreciate the luxury of relying on years of data to map trends. Seasonality was predictable. It was magical.
This year is different. We can use trend data to predict days or weeks, but knowing what next year will look like is no simple matter.
Use the trending directions over the last few months to help predict what will happen in the next few months. Develop multiple models for the year based on varying degrees of optimism. Finally, argue with finance and don't adopt the most optimistic version or agree to reevaluate monthly to quarterly.
Why a variation in optimism? Unfortunately, early signs point to hackers targeting the vaccine supply chain, and we’ve seen how unpredictable people are when it comes to following recommendations. We have to assume some variability in the percent of the population that will elect to get a vaccine, even when widely available.
Industry First
The industry you belong to and the industries you sell to should heavily influence how you adjust your forecast. The industries you sell to and how they respond to the pandemic should also inform your sales strategy and possibly even your product strategy.
Industry trends may be more reliable than what you see in your own business. They will help you gauge whether you're performing on par with the rest of the sector or lagging.
For reputable data sources for industry reporting, check out Tufts University’s suggested sources. For niche markets with established customer bases, sometimes social mentions and competitive analysis are better research tools. For more market research tools, check out this Alexa blog post.
Regional, National & International Indicators Second
Some industries will need to be plugged into pandemic trends. For example, retail businesses can use pandemic data to determine how in-store vs. curbside pickup vs. online shopping is trending in any given area. The CDC has downloadable data available to the public here.
Supply chain issues impacted product availability at the beginning of the pandemic, but researchers are finding that big swings in consumer behavior are accountable for many of the current shortages. Whoever figures out the magic formula for what people will crave over the next few months will gain market share faster.
Inevitably, the behavior impact will vary by region as people adjust to varying degrees of change. Research organizations like Simmons Insights, EASI Market Planner by Data-Planet, or Passport by Euromonitor are good places to start your data quest for consumer behavior indicators.
Verify With Immediate Patterns
Even if you throw this advice out the window when signing off on your 2021 forecast, plan to frequently evaluate your forecast. Get access to industry, pandemic, and consumer behavior data sources. Figure out which external figures are the strongest leading indicator for your business and build them into your predictive models.
If your numbers fall off course during the coming year, examine the benefits of readjusting your plan.
The best thing you can do in 2021 is to keep an open mind and follow the evidence.
Read the full blog post on this topic here 👉🏻 Rethinking your 2021 revenue forecast
🐦 This week in #RevOps Twitter
Agreed…but easier said then done
Sure is 👇🏻
It’s definitely > 0% 👇🏻
📚 Your curated #RevOps reading list
From Surviving to Thriving in the Global Pandemic: How Subscriptions Could be your Magic Pill, from the Chargebee blog
Traditional businesses all over the world are using technology to bridge the physical divide. They are quickly realizing that a lot of SaaS solutions will help them adapt to the new normal and stay in business as the world around them changes.
How Collaboration and Breaking Down Silos Can Benefit Your Ops Team, from the Sonar blog
There is no “I” in “team.”
Alone we can do so little, together we can do so much.
Teamwork makes the dream work.
Collaboration is the key to success when it comes to driving tangible results. Before RevOps was a thing, marketing, sales, and customer success teams operated in silos with little understanding of how their counterparts worked. Thanks to the collaborative nature of RevOps, however, these teams can now come together to operate more efficiently than ever before.
4 Actions to Clean Up Your Sales Pipeline for 2021, Now, from the Clari blog
Upended sales cycles. Forecasts flying out the window. Shrinking pipelines.
If 2020 taught us anything, it’s how much the best laid plans can change instantly.
One of the best hedges against drastic and unexpected shifts is a solid pipeline coverage, promising a steady inventory of opportunities. As the next four quarters continue to hold so many unknowns, so much of your business will depend on a healthy pipeline.
The current year rolling into a new year is a perfect time to clean up your pipeline to set yourself, and your business, up for success for the next 12 months. Here are 4 things you can do to make an impact on your 2021 pipeline:
Start yesterday
Assess your pipeline inventory
Create a plan to re-engage
Pressure test your pipeline
AMA Summaries → Online @ RevOps Co-op
Why averages are bullsh*t, and other nuances of productivity analysis, with Ross Nibur, Director of Operations from Toast
From 0 to 1 - how to grow and scale your RevOps team, with Brian Vass, VP of Revenue Operations from Paycor
Funl is an operating system for your GTM team that provides end-to-end, full funnel analytics and insights that keep marketing, sales and customer success teams aligned and working seamlessly together to drive more revenue growth for your business.