Sales Forecasting

The seasoned sales leader knows from experience to take their team’s forecasts with a grain of salt.  Some team members are predictably high, others tend to run low, and patterns start to emerge.

There are five “archetypes” we commonly see among sales reps when forecasting.  Which profile do most of your team members fit?

1. The Optimist

The Optimist loves the thrill of the hunt and easily gets excited about new opportunities.  Their passion is contagious.  They broadcast their prospecting successes to the team, but ultimately, many of the opportunities they identify seem to stall or fizzle out. 

Optimists are great to have on board and tend to have a positive impact on morale. But when it comes to forecasting, it’s hard to trust their numbers.  

2. The Time Traveler

The Time Traveler is similar to the Optimist in their enthusiasm about deals in the pipeline. They are better at qualifying and sizing opportunities than the Optimist – but they keep pushing their close dates forward, time and time again.

Sales leaders need to know not just HOW MUCH revenue to expect, but WHEN to expect it.  Time travelers can make achieving revenue predictability quite difficult.

3. The Sandbagger

The Sandbagger is the polar opposite of the Optimist and the Time Traveler.  Sandbaggers are cautious and not ones to brag – in fact, they downplay what’s in their pipeline to manage expectations, and they often set close dates way out.

If you’re trying to achieve growth and have a target number to hit, Sandbaggers may need to be pushed to be more aggressive with the revenue they commit to bringing in the door. 

4. The Data Dude

The Data Dude knows their numbers top to bottom. They know what they’ve closed in the past, and use this as a lens to look at their current pipeline.

They may not have exact figures, but they have a good approximation of historical close ratios, pipeline velocity and time-to-close metrics, win rates against different competitors, and more.

There’s a lot of merit to this approach.  Looking at hard data from the past can provide a great indicator of future performance – but this alone may not suffice when introducing new products, entering new industries, or when the competitive landscape evolves.

5. “Just Use My Numbers from Last Quarter”

“Just use my numbers from last quarter” is the worst type of them all.  This is pure forecasting laziness.  In organizations where reps don’t have true accountability to a sales forecast, or where partner networks are involved, this archetype can rear its ugly head.

The Perfect Blend for Sales Forecasting & Revenue Predictability

Individual reps and sales organizations that excel at forecasting often do so by blending archetypes one through four. They have a well-oiled process that weighs data, the sales rep’s “gut feel,” and market factors to reliably predict revenue. 

Ideally, this process lives in their CRM, allowing them to have a real-time view of what’s changing and the most current information when building budgets and forecasts.

The very best actually go back and measure deviation from the forecast, so that their team can benefit from “lessons learned,” identify coaching opportunities, and continually improve their processes.

Sales Forecasting in Your Organization

Which of these archetypes in most common at your company?  Are there other “types” we missed?  How do you achieve revenue predictability and accurate sales forecasting?