RevOps Co-op Weekly #104 - End Of Year Forecasting
We caught up with Erin Gondeck from Pigment to ask all the questions about end of year forecasting and best practices.
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End Of Year Forecasting
Dylan Zayonc
We have the amazing Erin Gondeck from Pigment for our Slack AMA to discuss end of year forecasting and best practices!
We have some great topic questions that Erin will be discussing at first and then submitted questions from members of the ROC, but please bring your own questions and warm those fingers up because this is a packed event!
To get everyone warmed up i'm going to ask a question near and dear to my heart: Does pineapple belong on pizza?? Drop your answers in the chat!
Blake Kendrick
Not preferable, but acceptable.
Dylan Zayonc
Alright, i'll take that.
We’re going to kick this topic off with a question that should get everyone's blood flowing!
What are some best practices on forecasting methods & approaches to take that can improve sales forecasts?
Erin Gondeck
Good answer Blake, pineapple on pizza can be a polarizing topic!
Alright, let's do this! This can vary depending on size of team and maturity of business. A few different approaches we typically see:
You want to have different eyes / opinions - not just rep vs. first line manager but also potentially getting your SC leadership to opine, or CS if it is an expand opportunity
Also, try to leverage data as much as possible. There is a lot of rich historical data that can help to bubble up insights and patterns to help validate or invalidate opportunity forecasts
Dylan Zayonc
Those are some great insights, Erin.
Does anyone have any questions or experiences to share on this topic?
Erin Gondeck
If there are any specific areas people are looking for more best practices in let us know in the chat and we can provide more details!
Dylan Zayonc
This is a perfect discussion to lead us into our next question that comes from Taylor Risner: Sales teams are overly optimistic, finance teams are overly cautious. What are the best practices to establish a middle ground so that you don't have 4 different forecasts across the company?
Erin Gondeck
Good question, Taylor! We see this a lot with our customers and prospects; here are some things we think can help bridge the gap between sales and finance teams:
Having a single spot for sales and finance to collaborate and provide their inputs to the forecast, working of the same data source instead of pulling data from different systems or at different times and working on two different sets of assumptions
Agree on shared KPIs and dashboards to enforce collaboration instead of each group working towards different objectives
What if scenarios - plan for a range of outcomes to incorporate a more optimistic best case plan, base case, and worst case
Measure forecast accuracy of each group to enforce data driven decisions and encourage inputs to the forecasts that are making the plan more accurate
Here's a great article on other strategies to help get finance and sales teams in sync - HBR: Get Sales and Finance in Sync
Dylan Zayonc
That's a great question Taylor! Is there anything further you would like to pick
Erin’s end of year forecasting brain on?
This brings us to the next question: What types of data or inputs from teams can help the sales forecasting process?
Trevor Greyson
Do you keep renewal forecasting in the same forecast pack you mentioned above? What KPI's are you tracking in there?
Erin Gondeck
Dylan, here are some examples of data and inputs to incorporate:
Start off with bringing in opportunities from CRM, then incorporating things like historical win rate by sales reps, segment, industry, pipeline coverage ratio, aging, average time to close or time in stage
Commentary from front line sales leads, commit inputs, also incorporating MEDDICC or other sales methodologies to help qualify deals and some key considerations in a sales cycle
Yes, Trevor! We typically see customers including renewals in forecasting and then using deal type to split out new vs expand metrics. Further, some KPIs we see people track are: renewal date, commercial terms (i.e. auto-renewal, renewal uplift), NPS, user activity (e.g. log-ins), subjective traffic lighting by CS organization. I am also slacking a CS team member to see if they have any more to add to that list!
Dylan Zayonc
Erin, what tools/algorithms can consolidate all these data points?
Erin Gondeck
I am biased, but Pigment is a great tool for this. We have native connectors with Salesforce, HubSpot, NetSuite and others so our customers use it as a central platform to consolidate data and model out forecasts with algorithms and what if scenarios. There are a lot of options out there, I think this HubSpot article is a great resource for different sales forecasting methods:
Dylan Zayonc
Thank you for that input. I know this is a discussion I see all the time in the community so I'm sure people will be checking that out!
One last question in the inbox regarding this topic: How do solutions consultants at pigment positively influence deals that have risk of slippage?
Erin Gondeck
Good question, I think for solutions consultants it's really important to build out relationships with prospects at the champion or influencer level, so if a sales rep is not getting a response or a deal is at risk of slipping the SC can also be someone who reaches out to try and get communication or momentum going again. Our SCs can also really focus on differentiators to show prospects why they need a flexible planning & modeling tool now and help to quantify what the impact is if they wait or do nothing.
…There’s more! Read full AMA here 👉 End Of Year Forecasting
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