July 27, 2018

3 Steps to Accurate Forecasting

Gary Knight

The Predictable Revenue Podcast recently caught our attention when it hosted Zendesk’s VP of North American Sales, Jaimie Buss. She’s been a driving force for Zendesk’s unbelievably accurate revenue forecasts, which routinely land within 1% of actual revenue. Jaimie recounted:

“Before implementing our processes, the forecast was being missed by a large percentage, maybe 25%. But, you have to be within 5% – that’s industry standard. So most quarters, we have been within 1%. For two quarters, we were within 5%, that’s not too shabby on the whole.”

Jaimie didn’t right the ship with a data science team or some advanced AI platform – she established a consistent process and qualification scoring system throughout her sales team. Once the team was all speaking a common language (and updating their CRM data consistently), forecasting became a breeze.

First, Zendesk established their process into a sequence of events and educated their team on the definitions. For them, they broke down their process into 7 key stages. Here at ClosePlan, we have a 10 event sales process from discovery through contract signatures. Every business is different, which is why our Sales Events are built to be completely customizable.

ClosePlan Sales Events

Next, Zendesk reinforced their deal qualification by implementing a quantified scoring system to pair with their MEDDPICC methodology. They opted for a brilliantly simple 0-2 score for each topic: 0 for “don’t know,” 1 for “know something but need to know more,” and 2 for “know everything we need to know.” We love the simplicity of this model – it makes it incredibly easy to apply consistency across a large team.

ClosePlan Deal Scorecard

Finally, it’s just a matter of understanding the data. Once the team is speaking the same language and updating opportunities consistently, you’ll know the win rates associated with each deal stage and qualification level. When it comes time to forecast, you simply apply expected win rates to each opportunity and voila! – you have a valid and accurate forecast.

Every organization is capable of achieving these successful forecasts, the tricky part is maintaining the discipline required to see the benefits. The proper process and qualification criteria will change from business to business, but the foundation is what’s important. This is our core philosophy here at ClosePlan: we believe the key to running an effective sales cycle is consistently executing a best-practice process – across the entire team.

ClosePlan is purpose-built to optimize your team’s sales execution. We’re 100% methodology-agnostic and fully intergrated with Salesforce – the world’s #1 CRM. If you’re interested in learning more, contact us or visit our features page.