Part two is here! Doug and Jess continue their discussion on mastering forecasting. Today, they cover the two common purposes of forecasting with an emphasis on why these should never be confused. They dig into why forecasting is so challenging and strategies for properly creating forecasts as well as fixing poor forecasting practices.
Audio:
Video:
Additional Resources:
- [RevOps Show] Mastering Forecasting Part 1: The 5 Methods You Should Be Using (And When)
- [RevOps Show] Episode 38: Forecasting - When It's Right & When It's Wrong
- [RevOps Show] Episode 12: Build a Better Forecast
- [Blog] The Problem with Forecasting: Why Sales Isn't Working Today
- [Blog] 2 Simple Things To Do To Dramatically Increase Your Sales Forecasting Accuracy
Show Notes:
Editor's Note:
- If you haven’t listened to Part 1 yet, hit pause on this episode, listen to Part 1, then come back and listen to Part 2!
- We have launched a YouTube channel for The RevOps Show where we'll be posting the video version and shorts from episodes. We'd really appreciate it if you took a minute to go and subscribe to our channel!
Pre-Show Banter:
- Doug, Jess and the team are back from our Chicago offsite. The team went to The Second City and did an improv workshop (and saw a show later that evening). I (Hannah) did look up the debate on where The Second City started and I can confirm they started in Chicago in 1959.
- Doug and some of the team went to Mr. Beef. We got the full experience with amazing food and mother f’s being dropped in the kitchen.
- Doug and Jess argue about the “rules” of improv.
- Jess’s highlight from the offsite were the team presentations that were done on the best-selling, award-winning book, The Revenue Acceleration Framework.
- Doug’s highlight from the offsite was the rainstorm that the team ran through to get to The Second City show. It was quite the bonding experience.
Request! If you have any ideas on where our team should go for our next offsite - email your suggestions to me at hannah@liftenablement.com.
Main Discussion Points:
- There are two reasons for forecasting and they should never be confused: reporting performance to senior leadership and managing the business. One is reporting performance up and the other is managing the business. They are in fact two different things.
- Forecasting is hard for a lot of reasons…confusing success with skill, reversion to the mean, limited data sets, and more. Deals have three components that all must be accurately forecasted–value, timing and probability.
- To fix forecasting, you need to have an understanding of four facts that impact it: demand type, timing confidence, deal quality and fit score.
- The value of forecasting should be measured in the ability to make better decisions, not in the aspect of being right. Being right is a byproduct.
Jess’s Takeaways:
- Don’t mix forecasting for the board with forecasting for the business. Managing the business should give a counterbalance to what you’re feeling.
- People aren’t paying attention to the factors that impact forecasting–demand type, timing, deal quality. We’re trying to be too precise and those things aren’t necessarily going to drive precision.
Next Steps:
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Coming Soon: Episode 99!