With pervasive use of CRM systems like Salesforce.com, you have more historical data than ever at your finger tips.
With this data, you have a new opportunity your predecessors never had – the chance to use real data to supplement your gut instincts. Enhancing your intuition with data improves your ability to forecast and prioritize the best opportunities to close new business.
Every sales leader assigns a probability to close for each opportunity stage. It is the first, most basic step in sales forecasting. And when you’re just getting started with a company’s sales process, it’s ok to simply estimate what you think those probabilities are. Even run a couple scenarios in a spreadsheet. But once you have seen your sales cycle run through to completion for a significant number of opportunities, it’s time to question those initial assumptions.
What is the right probability? Are those guesses right? If you are tracking each opportunity and each opportunity stage is logged accurately, there’s no reason not to go back and verify your assumptions.
Run the numbers and determine if your guesses (or Salesforce.com’s default guesses) are right. As you size up your pipeline, you should know exactly what the probability is that these opportunities will close is. You need to manage upwards and communicate the right expectations. Using “25%” because it was what you plugged in the day you turned on Salesforce.com is only going to hurt you in the long run and lead to misleading expectations.
And once you’ve calculated that overall number, you need to dig in and look for variations in this number. How do different product lines convert? Different regions? Different managers? How are these rates changing over time?
Having this probability data in your back pocket based on actual evidence gives you a leg up on the vast majority of sales leaders. So go get it today. Even the most analytical of leaders don’t calculate this number with anything close to rigor. Don’t miss an opportunity to out execute your peers.
Think this would be too time consuming to calculate on your own? Contact us for a free trial of InsightSquared today and so you can run your business by the numbers.