Keys to Effective Sales Forecasting

Forecasting with Don


“Ok, Don, you have $350k forecasted for this quarter with Citbank, where are we in the process?”

It was our weekly forecast call and Don had been batting a big fat zero for weeks. Naturally, he blamed his territory. We responded by sharing with him that having New York City by himself was a sweet gig and he needed to start taking advantage of the opportunity or move on.

So like magic, Don’s forecast goes from $0 to $500,000 in one week; half million, just like that.

“Ok Don, who are you talking to and what’s the process?”

“Well, I met this girl who works for the VP of IT. She’s going to arrange a dinner with her boss and me. I figure we’ll have a good meal, share a few drinks, and schedule a WebEx. I will show the VP a quick overview, and we should wrap this up by the end of the month.”

“The end of the month is in two weeks.”


“So you are telling me that a VP at a premier financial services company is going to spend $350,000 with a vendor based on one dinner and an online meeting?”

“That’s the plan.”

“And there are no formal requirements, no RFP, no evaluation team, and no evaluation process?”

“That’s why I can get it in so quickly.”

“Don, one of us on this call is stark raving stupid and fortunately it’s not me this time.”

Keys to Effective Forecasting

Weekly Forecast Review

When digging a ditch, it’s almost impossible to tell if you are progressing in a straight line. That’s why it’s important to have someone on higher ground monitoring your progress and giving direction.

In an enterprise sales environment, even the best can overlook the fundamentals. The sales manager is responsible for identifying missing fundamentals and red flags that will delay or derail your deals.

Early in my sales career, I used to take any critique as a personal insult against my sales skills. If you are the sales manager you need to be aware of the fragility of the alpha-male ego, and treat accordingly.

Who makes it to your forecast, who doesn’t?

Your forecast is the justification for your existence, treat with care.

If there is an account that is repeatedly taken up your time, they belong on your forecast. If there is no good reason to put them on your forecast, stop wasting time on them. You can go broke being a free source of information.

The Evergreen Deals

I know the person that took my position with a former employer. There are three companies that were on my forecast 3 years ago, that still live on today.

If there are deals in your forecast that you know will never close, call your boss, explain the facts and then remove them. You will win far more brownie points than never closing a forecast of fictitious deals.

The Fundamentals

Here are the questions that sales manager need to ask about every deal.

Who – Who will run evaluation, Who will fund with budget, Who will make the decision, Who will sign off?

What – What products and services are you pitching?

Why – Why are they looking? Why are they looking at us?

When – (Work Backwards) When do they want to be live? When do they want training? When do they want to make a vendor selection? When will they have their short list? When will they invite vendors for first round evaluations?

The “Gut” Explained

Ok so what percentage do you put on your deals? Try this:

25% – You are in the deal

50% – You are on the short list of three or less vendors

75% – You are selected, waiting for final executive sign off

90% – Paperwork complete, waiting on purchase order

100% – Paperwork received and processed by accounting

Any suggestion? Email us at

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Lessons from a 911 Call

At a recent neighborhood association meeting, we had a man collapse, become unresponsive, and, in general, scare the holy crap out of all of us.

In short, the neighbor, Charlie, had what equates to a stroke. The following are the lessons that made themselves apparent and the series of events surrounding this emergency as they unfolded.

It is natural not to immediately acknowledge a bad situation

This situated started as I was walking to check on the kids who were playing in the yard adjoining the meeting, I noticed someone lying on the ground, face down. If I showed you a photo it would be quite easy to describe the situation and what was happening. However, as I was walking toward the person on the ground, I kept trying to convince myself that what I was seeing was not what I thought I was seeing. Surely this had to be an odd shadow or a kid playing a game with the others.

As I continued to walk, I was six feet from Charlie when his wife saw what was happening, and cried out. This was the confirmation needed for my brain to take hold of the situation. I jammed my hand into my pocket, retrieved my cell phone, and called 911.

How many times in our professional lives have we looked at a dismal situation and tried to avoid reality?

  • “I don’t cold call, I only talk to important people”
  • “All I need is to close 40% of my pipeline and I’m good”
  • “The next bug fix release will help us drive revenue”

Challenges to you and your company’s established position will come from areas that you do not expect, and from players with whom you are not familiar. It is extremely difficult to build and maintain a competitive advantage, and it is far too easy to lose it by not staying focused and having visibility to the events and circumstances that surround you.

You have to know what you don’t know

I reached 911 immediately and described the situation to the emergency operator.

The operator began asking me a series of questions in order to evaluate the situation and to gather pertinent information that she would relay to the ambulance drivers.

“Name? Age? What was he doing when he collapsed? Had he had any complaints about not feeling well before he collapsed?”

The answers I delivered included “Charlie, mid-50s, no complaints but has a history with a heart condition.”

Next question “Has he taken any medication this evening?”

I asked the wife. She replied “He’s on heart medication; he’s taken other medicines in the past. He could have gotten his pills mixed up.”

You need to know what you don’t know.

  • What is the profile of your typical customer?
  • Why do you win (and lose) deals?
  • How does your competitor drive 30% of revenue through partners and you can’t?
  • How loyal are your customers?

“I don’t know” can often be the smartest thing you will ever say – it gives you space to think, research, and gauge your colleagues without losing face, or leading someone down a path that will not bear fruit. Never be afraid to admit you don’t know something. You can always learn and win, but if you lie, you will lose.

In a crisis, people panic and will put them first

With the ambulance on its way, the next question from the 911 operator was “Is there a Doctor or Nurse in the area?”

I yelled the question to our group.

Ms. Houlihan came up and stood next to Charlie. She announced that she indeed was a nurse, a few years retired, but unfortunately she just had knee surgery and could not comfortably get down on the ground to check on Charlie.

On the ground you have Charlie, my wife who is keeping track of Charlie’s pulse, Charlie’s wife who is alternating between caring for her husband and freaking out, and me with my ear to my cell phone communicating with 911. We all momentarily stopped and looked up her. You could tell by her tone she was used to throwing out the whole “knee surgery” ploy to generate sympathy, pity, and maybe cut in line at local buffets, who knows?

When times get tough, two groups usually emerge, those who seek solutions, those who complain about problems.

  • “Its sales fault, they are the ones responsible for revenue”
  • “You can’t cut my department we are too important”
  • “We are too busy to do any extra, you get your team to do it”
  • “We just need to keep what we are doing”

Assumption is not a replacement for intelligence

As Charlie was loaded into the ambulance and the 911 operator bid me goodbye, I looked around for my kids – ages 8 and 10.

In the commotion they had retreated back into our house. I went inside to survey the level of trauma and try to calm them down.

I found them in my home office with my son playing on the computer. He seemed reasonably unfazed. He is 10, and he didn’t really know Charlie at all, so I took this to be a reasonable response.

My daughter however was sitting on the love seat, crying softly.

I breathed a sigh, and sat down next to her. At eight years old, she is definitely the tender-hearted one of the bunch. She has cried after seeing a good puppy food commercial, so this was what I expected.

“What’s wrong honey?” No verbal response, but tears and sniffles.

Mentally I’m trying to recall the sage advice from the parenting books on how to communicate with your children during a crisis. I start to panic when I draw nothing but blanks. I flash forward 20 years, a therapist’s couch, my daughter, her escort from the correctional facility, and a shrink proclaiming “So your dad royally screwed you up that night, now we know!!!”

I try again.

“Honey, can you tell Daddy what’s wrong?” Waiting for the obvious. A moment passes.

Finally, as she chokes back the tears she starts to speak “I was playing hide-and-go-seek and the other kids where playing freeze tag and no one came to find me!!!!” More tears.

Soooo, the whole neighbor collapsing on the lawn and being unconscious, no biggie, BUT, the fact that she spent 10 minutes crouched down in our shrubs, now that was problem.

How common is this in business, where we assume we know marketing conditions, customer preferences, or competitive threats?

  • “They have been our customer for 17 years, we know what they want”
  • “That company has never been a real threat to us, so we ignore them”
  • “Do you know who we are? We do not have to worry about things like that”

I think you would have found these same attitudes at Kodak, Delta, and General Motors.

Charlie is still recovering. We wish him and his family the best.

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I’ve been on the road a lot lately and recently had a panic situation that prompted a frantic call home. One of my bellwether measurements was out of range.

Let me explain.

When you’re married with two kids and managing two careers things get hectic and you actually forget to focus on certain intimate aspects of your relationship with your spouse.

The warning system that I use to alert me to that fact that my wife and I haven’t shared any “alone time” is Flo, the insurance spokesperson.

You’ve seen the commercials where Flo is the customer service rep in a white-washed virtual store that sells all types of insurance coverage. Under normal circumstances, Flo doesn’t strike me as all that attractive. But as the time between spousal “sessions” grows, Flo becomes more appealing.

This past week, one of Flo’s commercials inspired a visionary desire to wash over me.

I felt a longing to find a little cottage on Cape Cod where Flo and I could spend our summers and focus our time on Flo’s life, her thoughts, her dreams, and her unrealized ambitions.

We will stroll hand-in-hand down the beach while she shared the manuscript that she wrote in college and tried to get published only to find that there was no demand for political manifestos inspired by the writings of Alfred E. Neuman.

Later, after I finished painting her toe nails and agreeing that she should have been the captain of the cheerleading squad in high school and not that tramp Jennifer, I would craft a series of sonnets celebrating her life, her womanhood, and the inspiration Flo has given to dozens of aspiring insurance professionals. I would then sing these to her while accompanying myself on the lute.

And so that I could imbibe all that is Flo, I would invite her mother to come live with us.

We hear a lot of negative news these days on the state of the economy; the federal debt, trade imbalances, and unemployment is still higher than historical norms.

But remember, bad news sells, good news doesn’t.  Even the weatherman knows that people stay tuned in longer, the worse they perceive the weather to be.

So, as the bad news flows like malt liquor at a tractor pull, keep your eye on the issues that apply most to your business.

  • Are their companies in your industry that are attracting new investment?
  • Is your base of potential customers growing?
  • How are your competitors doing?
  • What is your customer attrition rate?
  • Is revenue/client dropping or stable?
  • What does your 90 day sales pipeline look like? Are there new accounts on the pipeline or just carryovers from previous quarters?

Real Estate, Economics, and Politics are all local, don’t let a “national trend” blind you to a “local opportunities”.

Now back to me.

So I call my wife and tell her that the ”Flo Alarm” has gone off and that when I get home, she needs to bar the door because she is in for the most intense four and a half minutes of her life.

As she starts to cry, she recites the passage from the Southern Junior Leaguers handbook that says that these types of acts are no longer required since we have birthed a girl and/or junior republican.

I politely interrupt her to let her know that I love her and that I have a court order.


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Buzzword Bingo

The comedian Steve Martin once said “Mambo Dogface to the Banana Patch”; explaining that if you intentionally and consistently jumbled your words when speaking around a toddler, that the toddler’s first day in Kindergarten would be extremely entertaining, and I really couldn’t agree more.  The point is that when it comes to personal-level communications, the focus should be on the comprehension of the parties involved, not the extremes to which the lexicon is taken.

However, as a species, we have a long-standing tradition of attempting to “enhance” our communications with clichéd words and phrases such as “net net”, “circling the wagons”, and the classic “at the end of the day”.  Recently, social media has motivated the bastardization of traditional job titles with many professionals calling themselves “ninjas”, “evangelists”, and “chief happy officers”.

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Signs Your Sales Rep is a Moron

Some sales-centric publications claim that 65% of sales people do not belong in sales. As a sales manager you wonder at times if that number is a tad low. However, as a service to our readers, we’ve put this quick reference list together to help you spot those 65%’ers in your organization.

Signs Your Sales Rep is a Moron

  • They talk more than anyone else
  • They try to create some remote, third-party connection with prospects. For example “Yeah, my cousin did time in your state. So we are like family.”
  • They claim that your solution can do everything, just name it. For example. “You want an open, yet proprietary architecture that will randomly reset the credentials in your enterprise single sign on layer? Oh heck, no problem.”
  • They know nothing about the prospect, their business model, or even the city in which the prospect is located, but pretend they do. For example “Valdosta, GA? Oh yeah, that’s where they grow those onions. It’s like a second home to me.” (Vidalia, GA grows the onions)
  • Their presentation is focused on the history of the company, the great things about the products and services, yet says nothing about how they will help the prospect or why really anyone should do business with your company. For example “Now that we are done with our three hour overview of our products for DOS, let’s talk pricing”
  • They won’t get off the phone even though the prospect has given valid reasons to support the claim that they are not interested. For example “Ok, I know that your bank really doesn’t do anything with South American Derivates, but can you at least watch our demo?
  • They trash the competition, a lot. For example “I’m not saying that your current vendor likes to skin the pelts off puppies, but have you ever seen a puppy around their offices?”
  • They start a blog for sales stories

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October 23, 2012 · 7:05 pm

Great Sales Sins – Trashing Your Competition

“Hi Bob, have you tried “natural” male enhancement? I saw the commercial on TV last night and immediately thought of you”

“Wow Barbara, that dress looks great. Did you get it in the “big girls” section at Lane Bryant?”

“So the wife and I just joined a swingers club……”

I would hope the readers of this blog would agree that these are lines that would exude a certain level of awkwardness and discomfort if they appeared in casual conversation.

However, as sales professionals we can generate similar feelings of discomfort with our prospects if we start to trash our competition.

I hate to burst your bubble, but you remember that great conversation you had where you felt like you and the prospect really “connected” and you shared how your competitor’s solution has been linked to Herpes Simplex 10?

Well here’s a news flash, your competitor had that same “connecting” conversation and when the subject of your company came up, he responded this with this:

“You are looking at ACME? You know they do very well in Java shops and I’ve seen some good press on them. However, knowing your internal infrastructure, project requirements, and with the fact that your CEO is sponsoring this project, I am confident that our solution, along with the reputation of our company, will not only surpass your technical needs, but offer a degree of comfort and validation that you are doing business with the industry leader.”

See the difference? Herpes vs. Industry Leader?

You should always feel comfortable asking your prospects which of your competitors they are evaluating.  If they respond with “Oh, you are the only vendor we are evaluating” you should start panicking because there is no way a serious purchase is going to be made without multiple providers being evaluated, unless, of course, you are Halliburton and you are selling into a Republican administration.

If you prospect is hesitant to give you the names of the others, calm their concerns by saying “The reason I am asking is that there are a good many vendors who do what we do, in their own unique way, some provide simple, cost-effective solutions while others provider enterprise-grade, robust systems.  If you are looking at vendors with whom I don’t normally compete, then I will know that one of us should not be taking up your time.”

If they still refuse, let it go.

If they ask your opinion about a competitor, start with a complement and then work in how you are different.  See example above.  If you have a good nugget of knowledge, like you replaced another vendor, save that until you get further into the evaluation.  You want to knock a vendor out when you are one of three, not when you are one of ten.

If you want an interesting exercise, call some prospects who went with the other guy and ask them “What do you enjoy about the system you picked?”  If you stay friendly, and polite, they will sometimes start slipping in the things they don’t like about your competitor as well.

Good luck.

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October 18, 2012 · 8:05 pm