Why discipline in Rep to Manager conversations matters

Are you confident about the forecast being presented at the closing of this fiscal quarter? What excuse will you give in your business review meeting following the quarter’s end, knowing the results are painting a totally different picture from the recent forecast?

I know you often spend a substantial amount of time explaining why the budget assigned to you will be hard to achieve despite the resources approved for the fiscal year. However, I think it is even worse to try to explain why you missed your recent forecast after your managers invested time to review deals and help reps close them. It should be easier to forecast the next two months than trying to predict the entire fiscal year, right?

There could be many reasons why the forecast was not accurate, and I am not planning to address all of them in detail. However, this blog post will provide a framework to help your managers do a better, more consistent job of presenting the forecast that avoids embarrassing follow-up questions and conversations.

I believe your forecast can be achieved if and only if your managers do an effective job in inspecting and coaching the sales reps in their opportunities and improving their skill gaps. They have a mission to assess risk in the current pipeline and come up with the right strategy and actions to produce an accurate forecast, regardless of whether their number is close to or far from hitting quota. Managers will then be able to more clearly ask for resources and support from senior management to defend their strategy in improving sales productivity. Many Managers rely on their “gut feeling” about a deal based often based on the seller’s optimism but there is way to significantly increase accuracy, through a more structured and consistent inspection process.

Let us say you are two weeks before the end of the quarter and the management staff, and the CFO in particular, is putting pressure on your shoulders to produce accurate weekly and, in some cases, daily forecasts. You transfer that same pressure to your sales directors and managers. For them to give you the answers you need, it will require an enormous effort from sales ops, managers and reps to collect the status of every deal every day, taking time away that they could have spent in front of customers and partners. After many complaints from your managers, you subsequently delegate the process to your sales ops person, but they know this process has created a bottleneck: reaching out to every rep to obtain a real-time status of every deal proposal for the closing. This reactive approach is not adding value to anyone in the organization; nevertheless, the weekly or daily forecast is required. In your mind, you prefer to come to the table with something rather than nothing and therefore must block off time after the closing to prepare your story on why forecast was missed. How would you feel after several quarters ending up over or under 15% of the original number? I bet you there will be a lot of embarrassing situations with the CFO, CMO, CEO, etc. Because you don’t want to be in another situation like that, you make a clear statement to all your direct reports to improve discipline and process. If this scenario sounds familiar to you, let me share a model that can alleviate the pain and help your appointed person solve the problem from the ground up.

The first step is to spend time with each of your direct reports and work together to identify the problem. Believe me, this time invested up front will pay dividends and produce a real plan to accurately develop and achieve your forecast. I understand the time is gold for every sales professional. You don’t want to spend cycles handling internal matters because you know they want to be with customers and partners; otherwise they will have the perfect excuse to explain their quota shortfall. As a result, you and many sales ops and enablement leads jump to quick solutions, which will not move the needle toward accuracy. Instead, take the time to understand what the real root causes are, and what is preventing your team from producing a predictable forecast.

Once you understand the source of your problems, you will have to consider a range of possible solutions, some quick fixes, some medium-term, and some long term. If you center the effort to understand sales rep behavior in managing and developing opportunities, then you will come across the following challenges:

  • Bloated pipeline: Reps have too many opportunities registered in the CRM but these deals are not well mapped out or defined at every sales stage. You will see many opportunities that have slipped several times, stalled in their sales stage, or moved back and forth in the sales process. You might also see barely touched opportunities that are showing low volume of activity compared to highly engaged prospects. You can find insights on these “non-real opportunities” from your CRM data, which can be used to make a decision on what you expect the rep to do: disengage them, categorize them as lost, or change sales stages.
  • Hidden opportunities: This category is about deals landing at the last minute to support rep quota attainment, and the manager wasn’t aware of them at all. Reps will always have a good excuse to defend their case. They are normally called “BlueBirds.” You want to minimize this type of deal because they can significantly alter your entire forecasting narrative.
  • Lack of data hygiene: Missing elements in your CRM and unlogged activities in the opportunity section of the CRM can misinform and diminish your manager’s ability to balance the pipeline and mitigate risk with upside from other groups.
  • Lack of negotiation skills: Poor negotiation can delay deals forever and drive bad discounting behavior. I know that empowerment level can be defined at each level of the sales team but not having a clear close plan and sale strategy can end in a situation where customers and prospects don’t see the real value of your offering. Also, your sales reps might end offering products that the customer doesn’t need, creating a customer satisfaction issue afterward, or giving extra discounts and leaving money on the table.
  • Under- or over-forecasting deals:  The amount of the opportunity depends of quantity, type, and price of the product offered. Bad use of these three elements can change your results after winning the opportunity. For example, many reps add extra products in the deal with the likelihood that the customer will accept the value prop of something that is not top priority in their initiative, which I call overselling. The same goes for discounting; some reps try to use discounting as a weapon to secure the deal when they haven’t done an exhaustive job of selling how their product stands out from the competition. Another instance is when over-optimistic reps try to oversell quantity by covering all possible users of the product when customer might want to start with a control group.
  • Poor communication with sales managers and among teams: Unclear expectations produce friction inside sales teams, breaking the trust between managers and reps and even among account team members. Sales teams need to have a clear rule of engagement when issues surface, and help is required. Companies can learn from every deal and use the information to support productivity in future deals and to onboard new sales team members.

These issues can hinder the manager’s assessment of what to forecast, what the risks are, and what could be an upside. If you also lack a clear inspection and coaching practice among reps and managers, then the situation could get even worse. If you want to improve your forecast, you will need to mature the following elements in your sales organization to mitigate the above issues:

  1. Defining, living, and breathing the company’s sales process (I have videos and other posts that describe how to build the sales process if you need guidance). Sales managers must master the usage of the sales process to effectively inspect and coach every deal and rep. Following the sales process is an indication of control of your business.
  2. A predictable 1:1 cadence for managers and reps that includes a compelling and structured agenda for discussion. For example, the agenda must cover pending and past due actions discussed and agreed upon by sales team and prospects. You want to discuss above issues to correct bad behaviors, and you want to track progress in each discussed area.
  3. Clear set of leading indicators for every rep to inspect their execution. I am sure you have a dashboard to track your business goals, but you also need to create a list of KPIs focused on the rep execution to convert leads to opportunities, and from opportunities to close/support sales stage. The leading indicators will help expose issues in your 1:1s and secure the right sales stage for leads and opportunities
  4. Comprehensive adoption of your CRM. You need to remove the barriers of adoption and these days many CRM platforms are making the process simpler for reps to avoid long hours stuck doing data entry. How do you know you are getting the most value of your CRM platform? This will depend on the level of collaboration in your sales organization through the usage of the CRM capabilities such as email campaigns. You don’t need to manually upload emails into the CRM, many platforms can integrate with your email provider (e.g. Outlook and Gmail) to synchronize information and minimize rework. In many scenarios, it can also help fill any missed field that to uncover issues such as product discount.
  5. Clear definition of committed pipeline including upside revenue and run rate. The core of your inspection and coaching discipline (along with your forecast management effort) relies on your ability to explain the importance of creating and managing committed opportunities. In the B2B space, sales cycles last on average 90 days and committing an opportunity for the forecast requires understanding of the rep’s velocity to close, the customer’s velocity to buy, and the velocity of your team to support. Based on the opportunity’s sales stage, you can assess the risk of the deal’s slipping by moving the due date to the following quarter or investing resources and energy to secure the closing on time. This is a powerful concept that triggers discussion on all other risk factors listed here. For example, you can add the opportunity to your current forecast only if the opportunity is in the negotiation stage and there are enough days left to close, whereas you don’t do so when the closing is contingent on both rep and customer velocity.
  6. A standard forecast management process for every manager, with clear expectations on outputs as well as due dates to present and maintain their forecast. It’s one thing to define the rule of commitment for the forecast that all managers should use and another to define the process that they should follow to produce and update their forecast. For example, you need to have a way to report the latest status of the top deals to the management level in a simple and easy way. In Salesforce, the Chatter tool shows the track record of the opportunity, but this might be cumbersome for some sales managers and VP of sales if the story is not well-maintained and documented. For example, you might want to have an executive summary that explains the current status of these big deals as a key element of the forecast management process—this expectation needs to be explicit and clear among sales managers. In addition, you also want to add the due date and format to publish the forecast that can be easily aggregated for the VP of sales to apply the same rule of commitment. The same recommendation applies for reporting potential upsides and discounts affecting the forecast. We can write a full book on how to run an effective forecasting process, but I just wanted to spotlight a few core aspects that require structure and agreement from your team.
  7. Management endorsement to land the inspection and coaching discipline. As I said before, this is the single biggest lever for the manager to inspect and coach the seller in a consistent and effective way. Executives must endorse this effort with the same energy as they are doing for the forecast process.

You can use this checklist to determine your forecasting discipline’s maturity level—you don’t need to throw out what you already have but to evolve from your baseline toward highly managed forecast practice, which will likely involve changes on several fronts to master the new process, but I hope this blog gives you a comprehensive summary of the levers you can pull to build that capacity including the definition of the challenges before taking an action.

I am happy to connect with you to discuss your sales discipline and help you develop a strategy for your forecast management effort to give you more confidence in your discussions with top executives down the road. Connect with me via email or give me a call to get started on the conversation you want and need.


Michele Lanzara is CoFounder of Convercio

Michele Lanzara is CoFounder of Convercio