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

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