Industry-first Benchmark Study from InsightSquared and RevOps Squared Reveals Top Avenues for Boosting Forecast Accuracy include Improved Data Quality, Increased Sales Rep Accountability and Automation
BOSTON — MAY 25, 2021 — A first-of-its kind benchmark research report released today from InsightSquared, a leading provider of revenue intelligence solutions, and RevOps Squared, a SaaS benchmark and research firm, finds only 15 percent of revenue leaders are very satisfied with their forecast process, with 91 percent of participants reporting their predicted forecast is six percent or more off from actual results.This indicates businesses are making critical decisions—from hiring to market expansion to product roadmap investments—without confidence in their current and future growth.
These new findings are part of The 2021 State of Sales Forecasting study, a survey of nearly 400 B2B enterprise organizations across industries to better understand how they manage the forecasting process, which lines of business are forecasted, how automation factors into forecasting, and to ultimately establish industry benchmarks for forecast management accuracy, process and performance.
“Despite the growing pressure on CROs and RevOps leaders to accurately predict growth and confidently report to the board, The 2021 State of Sales Forecasting reveals only nine percent of respondents are achieving a forecast accuracy of five percent or better,” said Todd Abbott, CEO of InsightSquared. “This study clearly shows the challenges revenue leaders face when it comes to efficiently and accurately forecasting their businesses and represents a material opportunity to improve forecast management.”
Following are key takeaways from the research:
- Sales Rep involvement and data quality are key to improving accuracy. Only 25 percent of companies report their sales reps, those closest to the deals, are involved in the forecasting process. The Lack of Rep Accountability was identified as the top reason for poor forecast accuracy (57%), with CRM Data Quality (44%) and Manual Processes (43%) ranking second and third.
- Automation boosts forecast satisfaction. A large percentage of companies still don’t have forecasting automation (52%), but of those that do, confidence in forecasting improves significantly. By removing human bias and manual efforts, as well as the errors that come with, satisfaction grows to 76%.
- Forecasting in disparate tools can impact efficiency and predictability. 80% of participants are using two or more forecasting platforms, with 55% using three or more. While the CRM is the top tool for forecast automation, less than one third are using it for opportunity scoring—turning most frequently to Excel—creating inefficiencies and data silos. Modern forecasting tools can provide a seamless experience to fill this gap.
- Reliance on Sales Stages remains high despite emergence of predictive attributes like activity. Sales Process Steps (53%) and associated stages are the number one input factor when it comes to forecasting opportunities, followed by Meetings Held (46%) and Emails/Phone Calls (43%). Executive/Economic Buyer Involvement is only considered by 30 percent of companies, a surprise given the growing size of buying groups. The focus on sales stages can be a flawed component as it relies on Sales’ input to accurately report sales stage progression of the opportunities.
- Frequent movement of opportunities impacts predictability and requires forecasting systems that can correlate changes to outcomes. Less than half (47%) of opportunities actually close within the original forecast date. Of those that push, they move five times at median, placing a burden on forecasting owners to monitor frequent changes and the impact they have on the business.
“With the 2021 State of Sales Forecasting Benchmarking Report, our goal is to foster new, innovative thinking and highlight opportunities to re-imagine how revenue leaders and revenue operations teams approach forecast management,” said Ray Rike, founder and CEO, RevOps Squared. “The research highlights that the 68 percent of participating companies who are experiencing more than 10 percent deltas in forecasts versus actuals have the opportunity to redefine their forecasting processes and apply emerging technologies including artificial intelligence, to reduce frustration and improve their forecast accuracy.”
As CROs and other revenue professionals continue to grapple with forecast accuracy, key findings from the report indicate rethinking processes in order to 1) increase Sales Rep accountability; 2) improve CRM data quality; and 3) leverage automation should be prioritized. Adopting a revenue intelligence platform that automates activity capture and offers machine learning-driven opportunity scoring can help enterprise organizations remove human bias and focus on real-time engagement and deal health—the top predictors of deal success, and overall business execution.
To view the full report and research findings, please visit: https://www.insightsquared.com/
InsightSquared and RevOps Squared will host a webinar today, May 25, 2021, at 2pm ET to discuss the report in detail. Register to discover the top challenges revenue teams face, as well as key tips to overhaul and better manage B2B sales forecasting processes.
About the 2021 State of Sales Forecasting Report
The State of Sales Forecasting Benchmark Research was conducted in April 2021 and included nearly 400 B2B companies providing insights across multiple categories including process, responsibilities, accuracy, satisfaction, and forecast automation platforms utilized. All data was anonymized, aggregated and normalized to exclude any outliers that are greater than two standard deviations from the mean. During tabulating the research findings, the following company segmentation attributes were used: 1) Company Revenue; 2) Average Annual Contract Value; 3) Distribution Model; 4) Target Customer Market and; 5) Go-To-Market Motion.
InsightSquared empowers revenue professionals to make better decisions by equipping them with actionable, real-time intelligence that drives predictable growth. B2B organizations worldwide rely on the company’s full funnel revenue analytics and forecasting solutions to build healthier pipelines, boost forecast accuracy, target rep coaching, and significantly increase competitive win rates. For more information, visit www.insightsquared.com.