How to Keep the Forecast Review Simple

When I work with some of the less experienced managers at our venture capital firm’s portfolio companies, I try to keep things obvious and simple. Not because those managers are incapable of complex strategies and initiatives, but because sometimes the simplest and most obvious approach is also the most effective.

That’s how I think most sales managers should approach reviewing sales forecasts. Keeping the review simple means asking a few simple questions. But the answers you get from those questions — no matter how simple they seem — could help you avoid missed forecasts.

Can My Rep Actually Hit her Quota?

This seems obvious, but every sales manager must consider whether a sales rep’s quota is reachable considering their current Commit plus Best Case numbers?

If the answer is no, then sales managers should reassess based on that answer. A sales forecast becomes unattainable when a sales manager’s reps miss their quota. By analyzing a rep’s quota based on Commit plus Best Case, sales managers should be able to better understand and prepare their forecast.

Am I Analyzing Each Opportunity?

For every sales opportunity, there is a separate subset of questions to consider. Each answer will help lead to a more informed forecast review.

The first issues to consider are why the close date was chosen and why the amount was selected for each opportunity? Again, it seems overly simple and obvious, but if you skip these steps then you may miss something that could have kept you from a more thorough forecast.

Next, consider why or how an opportunity got to its current stage and ask what its current status is. Not knowing the answer to this question is a little bit like a carpenter failing to measure before he makes his cut. Without those answers, you can’t truly understand the progress and realities of the opportunity.

From there, ask about the history of the opportunity to date and what steps were taken prior to the current stage. Assessing that timeline will help lead to answering the final question: What is the next action and why?

Earlier this year, Troy Elmore wrote an article for the Houston Business Journal that encouraged sales managers to act more like coaches.

As you go through the previous steps and answer each question during a forecast review, you should learn more about how to increase the likelihood that your team hits its quota and you ultimately exceed your forecast. From there, your job is to ask: How can I help?

Coaching your team through various scenarios will give your reps more confidence and allow you to recognize the hurdles that could keep you from hitting your forecast. If something can be corrected or adjusted based on the answers to your questions, the end result will undoubtedly benefit everyone involved.

Those questions may seem routine and overly simple. But if you miss a forecast, will you wonder if you skipped a step by leaving some of these seemingly simple questions unanswered?