Not preferable, but acceptable.
Alright, i'll take that.
We’re going to kick this topic off with a question that should get everyone's blood flowing!
Good answer Blake, pineapple on pizza can be a polarizing topic!
Alright, let's do this! This can vary depending on size of team and maturity of business. A few different approaches we typically see:
Those are some great insights, Erin.
If there are any specific areas people are looking for more best practices in let us know in the chat and we can provide more details!
This is a perfect discussion to lead us into our next question that comes from Taylor Risner: Sales teams are overly optimistic, finance teams are overly cautious. What are the best practices to establish a middle ground so that you don't have 4 different forecasts across the company?
Good question, Taylor! We see this a lot with our customers and prospects; here are some things we think can help bridge the gap between sales and finance teams:
That's a great question Taylor! Is there anything further you would like to pick
Erin’s end of year forecasting brain on?
Dylan, here are some examples of data and inputs to incorporate:
Yes, Trevor! We typically see customers including renewals in forecasting and then using deal type to split out new vs expand metrics. Further, some KPIs we see people track are: renewal date, commercial terms (i.e. auto-renewal, renewal uplift), NPS, user activity (e.g. log-ins), subjective traffic lighting by CS organization. I am also slacking a CS team member to see if they have any more to add to that list!
I am biased, but Pigment is a great tool for this. We have native connectors with Salesforce, HubSpot, NetSuite and others so our customers use it as a central platform to consolidate data and model out forecasts with algorithms and what if scenarios. There are a lot of options out there, I think this HubSpot article is a great resource for different sales forecasting methods:
Thank you for that input. I know this is a discussion I see all the time in the community so I'm sure people will be checking that out!
Good question, I think for solutions consultants it's really important to build out relationships with prospects at the champion or influencer level, so if a sales rep is not getting a response or a deal is at risk of slipping the SC can also be someone who reaches out to try and get communication or momentum going again. Our SCs can also really focus on differentiators to show prospects why they need a flexible planning & modeling tool now and help to quantify what the impact is if they wait or do nothing.
That's a great perspective on that question and coming from a sales background myself, it's something that more companies need to be doing!
Agreed! Alright, setting quotas - there is a lot I could share here but the short answer is that whatever is communicated to investors / the board. Wall Street is the baseline, and you add X% to the quota on the street to create that buffer.
But the real answer is that quota is basically the output, and you need to look at the inputs, which would be how many reps you need and the territories you give them.
By taking a more prescriptive approach to understanding the optimal headcount number and the territories to fill them, you can allow your organization to not look at quota as just a revenue exercise, but a margin exercise as well.
At Pigment we help our customers figure out sales capacity first to better inform the quota setting process, here are some more tips on this topic:
I know it’s a hefty topic so thanks for the precise answer. You read my mind - I was just about to ask if you have any references regarding this topic that might help! Thank you for that.
Yes, and happy to chat more about the quota setting process, if anyone wants more info please slack me directly!
Have multiple drawers! Drawer one is the deals you believe are going to happen. Drawer two are deals where you have strong relationships and need to make an inorganic ask to pull it forward.
Drawer three is where you need to take a “Hail Mary” approach. You usually don’t want to pull on drawers two and three, but it is important you are at least thinking about them to mitigate the inevitable lumpiness that comes with bigger deals.
Additionally, it becomes incumbent on the highest ranking leader(s) who carry the portfolio to guide the organization to pull one lever if another lever is not going to happen. The more levers you have, the more you can mitigate the risk of lumpiness.
Yes a few more articles to share to help with sales forecasting & more general revops planning processes:
This one does a great job outlining out technology can improve sales forecasting processes - BCG: Boost Sales and Lower Costs with RevTech
This has been amazing, thank you Erin. Everyone in the community can learn so much from you and we look forward to our next event with you and Pigment!
Please reach out to Erin Gondeck if you have any further questions or want to expand on the topic and we look forward to seeing everyone at the next Slack AMA!
Thanks for all the great questions Dylan & co. Yes, please reach out and can't wait for the next event!
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