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Is your CFO rolling the dice when it comes to receiving accurate sales forecasts?

Date:January 8, 2015

Large sales opportunities continue to create a false hope to meet forecasts

C-Suite executives are losing confidence in their sales organization’s ability to deliver accurate sales forecasts. According to a recent CSO Insights survey over 47% of forecasted (and weighted) enterprise sales opportunities never close. In fact, the odds of winning at a craps table in Las Vegas are slightly higher. 

There is a great video by Jim Dickie, Managing Partner at CSO Insights, talking on sales forecast accuracy and close rates. Take a moment and have a look a Jim's video below.

Large forecasted sales opportunities create a false sense of pipeline security in many organizations. The reality is you can’t close 50% of a large sales opportunity. It is all or nothing despite qualification weighting. When these large “opportunities” are lost it is nearly impossible to backfill the lost revenue associated with the deal, which creates tremendous angst and pressure throughout the organization.

Veracity of the sales pipeline has never been more important than it is now. With higher levels of competition, and longer sales cycles, sales organizations are looking for processes and methodologies that increase accuracy and close the “Reality Gap” that is associated with large sales opportunities.

Here are 4 insights to help close the “Reality Gap” in your sales forecast:

  1. Look to the future not just the past – Conventional organizations rely heavily on historical data to generate projections on future business. If these assumptions are inaccurate the margin of error can be significant. Highly accurate forecasting requires the use of data science to analyze a number of factors such as macro-economic trends, compelling events, and real time specifics on individual opportunities. 
  2. Address pipeline changes and make adjustments along the way – You need to adjust your forecast according to organizational and personnel changes. Consider all factors that cause opportunities to drift. Some of these include: seasonality, vacation, illness, and organizational structure changes.
  3. Remove the subjectivity – Implement sales forecasts that are not biased on hunches, gut feels, and assumptions.  Ensure you define, track, and measure specific attributes that help sales teams decide which deals can be “committed” to the forecast.
  4. Sales tools and coaching – Encourage knowledge transfer throughout the sales team and create an organization with ongoing skill development and coaching. Engaging a third party sales effectiveness organization to coach your sales team will increase their competencies and will improve the reality of their forecasts.

There are best practices and software solutions to help your organization provide more accurate sales forecasts to the CFO.

If you have questions about how 4Growth can help you with your sales forecasting, please feel free to contact us at


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Date:January 8, 2015