Sales Forecast Accuracy: Sales Process

If you have not read the first part of this blog series, you can find it here.

In this part, we’ll focus on the underlying activities that lead to effective forecasting. A disciplined approach to defining and deploying a sales process, methodology, and deal review process will leave you with a much clearer picture of your pipeline, leading in turn to more accurate forecasting.

Sales Process

Trying to forecast without an effective sales process is like throwing darts in the dark. Maybe you’ll hit the target, but more likely you won’t.

A typical sales process encompasses qualification, deal development, demonstrating that we are the right choice, proposing a solution, and closing the deal. Each stage should be well defined, including actions to be taken within the stage and clear direction on when to move from one stage to the next (aka exit criteria). We usually include a set of validating questions in each stage to help confirm which stage we are in for any given deal.  

Additionally, it’s common for our prospects to believe we are in one phase of the sales cycle, when we are actually in another. When we understand our own position in the process and where our customers are, we are more likely to accurately predict when a deal will close. To help us do this, we need an effective sales methodology.

Sales Methodology

Many companies use a form of MEDDIC for deal qualification, or you may consider using Mentor Group’s own INFINITE methodology. Whatever methodology you use, there are three key steps to perform:

1. Always be Qualifying! Deals evolve, often due to changes in scope, personnel shifts, or other projects taking priority. It’s critical to re-qualify every time you interact with your prospect to aid in more accurate forecasting (and just getting the deal closed, of course!)
2. Be Qualitative. For example, if you are concerned about competition, think through why you are concerned, and what strategy you will use to beat the competition. Alternatively, if you know that the prospect has a consensus-driven decision-making process, that may factor into the time needed to close a deal. This is especially important as a sales rep who may be managing multiple deals, and it is invaluable to a sales leader who needs to assess a large volume of deals quickly.
3. Be Quantitative. We recommend using a ratings scale (Mentor Group has a standard one for MEDDPICC). As an example, if a deal does not have a Champion, the score should be zero for that metric. If that Champion is not only supporting you but is actively internally selling for you on your behalf, then you can score the Champion more highly. This score can be compared to your current stage in the sales process (lower scores typically indicate an earlier stage) or against AI scoring from applications like Clari. It simply provides an additional way to validate deal quality.

Deak Reviews

This is where science meets art. You have a well-defined deal with a value, a close date, a sales stage, and clear next steps. As sales leaders, we often ask very open-ended questions about deals, such as: “What’s going on with the ABC deal?”

Unfortunately, these types of questions may not lead to confidence in a deal value or closure.

The best deal reviews focus on two areas: defining who you are selling to, and validating the information provided in the previous section (using MEDDPICC, for example).

If you are using MEDDPICC, you are effectively combining the two questions into one when you ask about actions from the Champion and Economic Buyer. In Enterprise sales cycles, you need to ask not just about these two roles, but also about other people who may be supporters or opponents. In sales cycles that involve partners, it is critical to understand what they are thinking and how they are supporting (or opposing) the deal.

If you spend your time validating the output from the sales methodology, you’ll increase your confidence in the timing, scope, and value of each deal.

Many years ago, a simple approach was introduced in manufacturing environments known as the “Five Whys.” Simply put, it is a root-cause analysis designed to gain a deeper understanding of the challenge at hand. It is simple: just ask a “why” question up to five times.

Usually, you will get your answer before the 5th question. For example:

• Why did you push out the close date for the Acme deal? 
  • The prospect team wasn’t ready to sign the deal by that date.
    
    
• Why wasn’t the prospect team ready to sign the deal by that date? 
  • The approval process will not be completed by that date.
    
    
• Why wasn’t the approval process completed? 
  • We only started the process two weeks ago. They require six weeks for approvals, as the approval team is based in India.
    
    
• Why did you only start the process two weeks ago? 
  • We didn’t realize the process would take that long.
    
    
• Why did you not realize that the process was going to take that long? 
  • We simply didn’t ask.
    
    

…and there it is. When we use a sales methodology that includes a contracting process (such as the Paper Process in MEDDPICC), we recognize the importance of enquiring about the approval process early. Had that been done, we would either have initiated the process earlier or set a more suitable close date.

Another variant of the “5 Whys” is the “3 Whys”. This one is more specific and is often used to qualify a deal more fully. These questions are:

• Why do anything?
• Why buy from us?
• Why buy now?

On the first “why”, if the prospect doesn’t believe that there is any reason to change, then unless you can highlight what they are missing (like MEDDPICC Pain), you are not likely to move any further ahead.

On the second “why”, we must simply differentiate ourselves from our competitors, recognizing that the most likely competitor is “doing nothing”. Having a clear benefits analysis or ROI model often shows that it makes more sense to work with us, rather than to work with someone else (or to do nothing). On average, people tend to resist change or are risk averse. In both of those cases, when you provide a very clear business case, your prospect is more likely to work with you.

Regarding the last “why”, it is crucial to determine the prospect’s timeline to provide a more accurate forecast. Having little sense of urgency is a warning sign that the deal may never happen or that other projects will take priority. Again, a strong ROI model may help to accelerate a deal when it is clear that there are significant benefits to moving forward.

Lastly, it is still necessary to confirm that the prospect has a way to pay for our product and/or service. Although there may not be a formal budget per se, there needs to be confidence that the money will come from somewhere. Not knowing where the money would come from is a significant cause of deal delays or reduced deal size.

Now that you have a set of well-defined deals with both qualitative and quantitative insight, your ability to forecast more accurately should be significantly better. In the last post in the series, we’ll review the management cadence and analytics approaches that can be used to truly lock down forecast accuracy.