Forecasting and pipeline management don’t get nearly the attention they deserve and that doesn’t make sense. Of all the parts of CRM, the forecast is one of the few things many companies still leave to manual systems, i.e. spreadsheets. Even sales compensation has a higher place in heaven as companies like Xactly have blazed a trail away from spreadsheets to a system with a database and analytics, with excellent results. You’d think that sales people would be willing to invest as much in the forecast as they do in counting their commissions.
Part of the challenge with forecasting and pipeline management is that some professionals might resent conventional forecasting systems for the same reasons they like compensation systems. Confused? You shouldn’t be. Both types of system reduce uncertainty to certainty as much as possible. But while that’s a good thing when you are counting existing money (your commissions), it’s a problem when figuring out the future because the future is anything but certain.
That’s why last week’s Cloud 9 Analytics user meeting was so important. At their third annual user conference, CEO Jim Burleigh, talked about the importance of understanding the probabilities when forecasting. It’s no coincidence that Cloud 9 now boasts a forecasting user interface that uses probabilities but also acts like a sales manager.
If you’ve spent any part of your career in sales then you know there are deals and there are DEALS. Some deals are like racehorses, they practically sprint from first call to closure while others plod along and maybe even stop. That’s an extreme situation and it’s easy to spot the real winner. But consider two deals at a 90 percent completion stage. They might look the same numerically but each took a different path to that 90 percent mark. One might have taken twice as long, one might not have enough money budgeted, one may be run by a C-level officer on the customer side the other might be managed by a director.
These differences in the history of the deal add up and a seasoned sales pro knows they are important. But conventional pipeline and forecasting tools (e.g. spreadsheets) make no use of history, which might help explain why only nine percent of organizations we’ve surveyed have a 0.9 correlation between the forecast and reality. The rest? Foregtaboutit. When it comes to forecasting these deals, the sales pro might favor one over the other for reasons that add up to gut instinct. So, it’s no surprise that the pros create three flavors of forecast — the best case, worst case and the most probable.
The genius of Cloud 9 today is that they’ve found a way to take the best of what analytics can do to track history and spot trends and combined it with a forecasting user interface that enables a professional to apply common sense to arrive at best, worst and most probable scenarios. Some people call it gut instinct and I suppose that’s as good a term as any, but really, it’s not gut — it’s applied intelligence and experience that just happen to be hard to put into words. At any rate, the new forecasting UI is straightforward and looks easy to use and it will remind professionals of their beloved spreadsheets, but with a lot more intelligence behind it.
Getting sales people to put aside the pure spreadsheet approach and go with something with more rigor behind it may still be a challenge. But Cloud 9 has demonstrated that it both understands the challenge in all its dimensions and that it can turn its knowledge into very serviceable product. Like the compensation managers before them, Cloud 9 has replaced the spreadsheet with something that makes more sense, is easier to use and should result in better results all around.