Sales organizations choose this

[sami]

Bad Sales Forecasting Math
As I discussed in my book Sales EQ, the vast majority of sales organizations derive their forecast from pipeline opportunity stage. These organizations have applied a percentage to each stage and use that percentage multiplied by the projected revenue of the deal to create a forecast.

For example: If a $10,000 opportunity is in the “Discovery” phase which has been determined to be 30% to closed/won in the CRM, then the forecast for that deal, at that point in time, is $3,000.

A flawed methodology because it is easy.

It requires no critical thinking and no courage on the part of sales leaders to dive into the pipeline and hold people accountable. Just plug the stages and percentages into the CRM and voilà, you have a sales pipeline forecast on the dashboard.

Not surprisingly, organizations that leverage the stages-based forecasting methodology rarely have accurate and predictable sales forecasts. Yet, they are consistently and predictably plagued by end-of-the-quarter fire drills in their attempts to make up for the inaccuracy inherent in this approach.

Note: Respected sales expert Colleen Francis disagrees with chinese overseas europe database me on this point. Read her alternative argument on stages vs probability based sales forecasting.

Good Sales Forecasting Math
There is a better way. For sales organizations it requires that you develop a culture that expects accurate sales forecasts and that you train your leaders how to coach the pipeline and forecasting. Leaders will need to master a combination math, art, intuition, and managerial courage.