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Fixing Forecast Accuracy
The quest for the holy grail of sales confidence!
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Tim BramanRevegy, Inc.VP of Corporate Strategy
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Deal Outcomes – Forecasted Deals Only
CSO Insights, Inc. 2013 Sales Performance Survey
48.6%
47.4%
46.5%
27.3% 26.1% 24.2%
46.8%
30.3%
All Companies Use CRM
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Poll
What tool do you use for forecasting?
- SFA (Salesforce, Microsoft, Oracle, SAP, etc.)- SFA plus Excel- SFA plus Forecasting Analytics tool- Excel only- Other
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Today’s Agenda
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The Smartest Guys in the Room
•Sirius Decision – Jim Ninivaggi•CSO Insights – Jim Dickie•Forrester – Scott Santucci•Aberdeen – Peter Ostrow
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Context for Today’s Discussion
$$$
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It Isn’t Easy…
Challenges with Forecast Accuracy
We don’t
really have
a process…
Our target market is
EVERYONE!
Tactical vs. Strategic SolutionBuyers
EngageLater
Big vs. Small
Prospect
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Poll
What is your biggest problem with forecasting
- No common language/process- Sales Representative forecasting skill/knowledge
- Lack of insight to customer behavior- Lack of Management inspection/coaching- Don’t have appropriate tools- Other
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46.8%
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What is “Good” Forecast Accuracy - Top 20%
90 Days 60 Days 30 Days Immediate
66%
76%80%
84%
Aberdeen Group : “Sales Forecasting Research Benchmark”
- On-time?- Amount ok?
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Why care about Forecast Accuracy?
Quota AttainmentSales Cycle Reduction
17% 10%
Top 20%
3% 0% 6%
7%
Middle 50%Bottom 30%Aberdeen Group : “Sales Forecasting Research Benchmark”
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Forecast with Confidence – The Five Pillars
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Forecast with Confidence – The 5 Pillars1. Ideal Customer/Qualify
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Who is your ideal Customer?
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Ideal Customer/Qualify
Case Study: GE Finance• 3X win rate increase• 10,000 New
Harvard Business Review, The New Science of Sales Force Productivity
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Ideal Customer – Qualify the timing
Win Rate 17%
CSO Insights, 2013 Global Sales Performance Optimization Study
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Forecast with Confidence – The Five Pillars2. Sales Process
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Stage(SFA-%)
Identify(Lead – 0%)
Qualify(D – 25%)
Develop(C – 50%)
Proof(B – 75%)
Close(A – 90%)
Objective Is this a prospect? Is there an Opportunity? How do we help? Prove our Value Get Ink!
Critical Success Factors
• Validate customer’s current business challenges and key initiatives
• Understand customer’s landscape and our potential partners
• Determine key stakeholders, evaluation criteria and decision-making process
• Develop latent pain /use Challenge/provocation message
• Conduct initial executive meeting
• Confirm executive commitment and critical success factors
• Identify competitive landscape
• Determine potential solution fit
• Develop initial sales strategy with account team & management
• Conduct discovery workshop
• Develop our unique value propositions (UVP)
• Confirm solution fit with key stakeholders
• Create solution presentations and demonstrations
• Test / Refine the solution presentation with our Coach
• Present OUR solution to key decision makers
• Integrate implementation, training and support teams
• Provide references or conduct POC
• Submit value-centric proposal
• Confirm final decision process and timing
• Gain customer commitment and finalize legal agreements / timelines
• Obtain internal approvals
• Process Contract/Purchase Order
• Conduct transition meeting with Professional Services and support teams
Sales Process
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Discovery QualificationSolution
Development Short List Selected
Qualified Opportunity
Signed Agreement
Solution Aligned with Customer Needs
Selected as one of FinalistsDemandGeneration
Stag
eG
oal
Defi
nitio
nTo
ols
Mile
ston
es
Sales Process
• BDR pre-qualifies from
marketing campaigns.• BDR and AE prioritize Top
Prospects• BDR sets up further
qualification and discovery calls.
• BDR and AE identify key stakeholders
• Contact prospects and customers to qualify budget process, time-frame, decision-makers and influencers, decision/ procurement process.
• Team gathers information to understand customer’s objectives.
• Further qualification of key decision-makers/ stakeholders, buying criteria and technical requirements.
• Professional Services engaged.
• AE works with team to develop the solution
• Create customer-centric demonstration
• Conduct demonstration/presentation
• Create proposal and customer
• Review proposal with key stakeholder
• Validate Short List• AE and team make final
proposal adjustments • Conduct necessary ‘Proof’
activities• Reconfirms customer’s
decision and procurement process.
• Negotiate Business Terms• Gain internal stakeholder
approvals (legal and finance)• Manage customer
procurement cycle• Identify potential risks• Obtain contract signature and
Purchase Order
• Territory Plan• Account Plan• Ideal Customer Profile• Marketing Campaigns
• Value Message • Qualification Checklist• Whiteboard• Call Plans
• Whiteboard• Overview Presentation• Win/Call Plans• Value Map• Joint Evaluation Plan
• Demo Scripts or Standard Presentation
• Opportunity Win Plan• Value/Relationship Map
• Proposal Templates • Joint Evaluation Plan• Opportunity Win Plan • Value Map• Statement of Work
• Contracts• Statement of Work• Implementation Plan
• Lead generated by BDR, AE and/or AM
• Or, Marketing scores the lead (0%)
• Opportunity identified
• Or evaluation is underway
• Project is funded
• Value Map Completed
• CSF’s confirmed with executive
• Demonstration/Presentation delivered
• Proposal reviewed with executives
• Notification of short list
• Proposal submitted
• Proof conducted
• Decision pending
• Verbal commit
• Contracting process identified
• Agreement on contract terms and conditions
Pipeline Upside Commit
Lead
Understand Requirements
0% 5% 20% 40% 75% 90%
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Your Sales Process in SFA
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=
So What’s the Problem…
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Start with Sales Process
Clo
sed
Qualify DiscoverDevelopSolution Propose Negotiate
Sales Stages
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Add Best Practice Activities
Collaborate on the
Evaluation Steps!
Do we have
Access?
How will the Customer
Measure Value?
Which StakeholdersVote on the
Final Decision?
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Collect the Reward!
Clo
sed
Qualify DiscoverDevelopSolution Propose Negotiate
Sales Stages
Sales Process Win Rate
No Process 38%Semi-Formal 46%
Formal 48%Dynamic 52%
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Align with Buying Process
Awarenessof Issue Prioritize
ExplorePossibleSolutions
EvaluateVendors
SelectVendor
Negotiate
Buyer Stages
Sta
rtC
lose
d
Qualify DiscoverDevelopSolution Propose Negotiate
Sales Stages
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Test Progress with Evidence
Clo
sed
Sta
rt
RFP/RFIIssued
Presentation/Demo Request
ShortListed
Legal ReviewPilot
Web/SocialActivity
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Why implement process?
Aligns toCustomer Buy Cycle
Win Rate
Poor 43%
Average 47%
Excellent 60%
CSO Insights, 2013 Global Sales Performance Optimization Study
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Forecast with Confidence – The Five Pillars3. Sales Tools
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Build a Plan – Begin with the end in mind
ReceiveValueDeployDeliverSign
ContractVendor of
ChoiceFinalistsSelectedTODAY
DateWhyWho
KPIMetrics
Source of Urgency
ApprovalProcess
DecisionProcess
EvaluationProcess
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Collaborate on the Plan
Activity Week of
Discovery Interviews – Prospect Technology Team 29-JulDiscovery interviews - Prospect Finance Team 5-AugSummarize findings and prospect agreement 12-Aug
Collaborate on Plan/Timing for Evaluation 19-AugCapture KPI/Metrics Current State 26-Aug
Develop Implementation Plan 2-SepAgree on preliminary success criteria 9-Sep
Submit contracts to legal 16-SepGain legal approval (Terms & Conditions) 23-Sep
Present proposal for approval 30-SepFinal negotiations 7-Oct
Contract Signed/Purchase Order Issued 14-OctImplementation Kick-Off 21-Oct
Go Live Date 15-JanMeasure Success 22-Jan
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Build a Plan – Watch for Bear Traps
- Procurement- Board Approval- Security Reviews
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Map the Decision Makers
✔ ✔
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Value tools and Negotiation Plan
P&L
Reduce Sales
Expense 5%
Increase Sales
Volume 5%
DecreaseDiscount
5%
Sales 100.0 100.0 105.0 105.0
Cost of Goods 60.0 60.0 63.0 60.0
Gross Profit 40.0 40.0 42.0 45.0
Fixed Costs 13.0 13.0 13.0 13.0
General & Admin. 11.0 11.0 11.0 11.0
Sales Expenses 6.0 5.7 6.0 6.0
Profit Before Tax 10.0 10.3 12.0 15.0
Profit Increase 3.0% 20.0% 50.0%
Harvard Business School Publication #9-192-098 rev 7/9/92
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Forecast with Confidence – The Five Pillars4. Coaching
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What is coaching?
38
Manager: Frank, I’m concerned about your
forecast Frank : Just submitted the final proposal to XYZ, I’m confident it will close this month
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What happens at the point of the Spear?
Poor Average Excellent0%
20%
40%
60%43% 47% 52%
Proactive Coaching
CSO Insights, 2013 Global Sales Performance Optimization Study
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When to Coach
Clo
sed
Qualify DiscoverDevelopSolution Propose Negotiate
Right Deal?
Can we Win?
Will it Close on Time?
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Rep
Fore
cast
Ski
ll Trust but Verify
Coach
Priority #1
Monitor
Ignore
Prioritize your coaching
Deal Size
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Forecast with Confidence – The Five Pillars5. Analytics/Metrics
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Why analytics and metrics?
43
40%50%60%70%
44.30%51.80%54.80%
70.40%
No AnalyticsWith Analytics
CSO Insights, 2013 Global Sales Performance Optimization Study
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What to measure
• Average Deal Size• Time to Win/Lose a deal• Qualification Score to Win/Loss• % of Outcome/Evidence to
Win/Loss• Velocity/Dropout between
Stages• Average Discount• Forecast Accuracy
44
New vs. ExistingDeal Size – Small vs. LargeCustomer Size – Small vs. Large
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Average Sales Cycle – New vs. Existing Customer
CSO Insights, Inc. 2013 Sales Performance Survey
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Sales Process Dynamics
OpportunitiesExiting Process
Leads In
60% 48% 22% 10%
Dis
covery
Pro
pose
Neg
otia
te
Clo
sed
W
on
Qu
alify
90Days
46Days
32Days
39DaysStage
Duration
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Don’t get Siebel-ed
Deal Forecast Percent
Amount
Deal #1 75% $1,000,000
Deal #2 75% $1,000,000
Forecast Amount ???
Forecast Percent vs
Forecast Category
10% Omitted25% Pipeline50% Upside75% Commit90%
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Which reps are following the sales process?
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VP of Sales – WIIFM?
Trusted Forecast
All Others0.00%
5.00%
10.00%
15.00%
Aberdeen Group – Sales Forecasting Benchmark Report
Average Revenue Growth Rates
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• Understand your ideal customer and when they buy
• Create an evidence-based, buyer-aligned forecast
• Leverage tools to plan and win• Change Sales Managers from “flogger of the
forecast“ to “Sales Coach”• Leverage key metrics into forecast reporting
Forecast with Confidence!
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Questions?
Tim BramanVP Corporate [email protected]