Customer Success

5 Tips Every VP of Sales Needs to Run a Successful Forecast Meeting

July 4, 2012

Want to know the most important step in the sales forecasting process? It’s not coming up with your best case and commit numbers or predicting the odds that an opportunity will close. It’s instituting a regular forecast meeting.

Forecast meetings provide a forum for in-depth discussion between you (the VP of sales) and your sales reps about the individual opportunities that make up a forecast. The purpose of the meeting is to develop a level of confidence around each forecasted opportunity so that you can deliver the most accurate forecast to management. Having an effective forecast meeting will not only help them forecast more accurately, but also provide regular coaching opportunities to help make good reps better, while weeding out the bad ones.

Here are five tips to ensure that your forecast meetings are efficient and effective:

Tip 1: Prepare in Advance

One of the most important factors in running a productive forecast meeting is preparation. To be productive, as the VP of sales you must be prepared to ask tough questions about each opportunity, and the sales reps must be prepared to answer those questions.

For sales reps, that means bringing the forecast they submitted along with the list of opportunities that make up the best case and commit forecasts. Sales reps should be prepared to discuss the opportunities that they are forecasting, as well as anything else in their pipeline. For the VP of sales it means coming to the meeting with your notes from the previous week’s forecast meeting and the sales rep’s new forecast. Doing so allows you to accurately follow up on forecasted opportunities from the previous week and confirm that progress is being made.

Tip 2:  Conduct a Thorough Inspection

A great way to start a forecast meeting is to quickly review the current forecast and any progress being made toward hitting the forecasted number. Your sales reps should have already sent you their forecast sheet with their best and worst-case numbers and the list of opportunities that they expect will get them to those numbers. Compare that sheet to the one they gave you the previous week. If the number has changed, find out why.

Once you have a forecast number, work backwards through each deal, starting with the deals in the commit number, followed by the best case, and ending with the pipeline identifying backup deals to cover any deals that may fall out. The goal is to feel more comfortable about each opportunity, so you should run through as many questions as it takes to get to that point. As you get through each opportunity, you’ll develop your own level of confidence on whether the opportunity belongs in the forecast or not, as well as the probability that you think it will close.

Tip 3: Invite the Right Meeting Participants

The forecast review meeting is designed to be a one-on-one meeting between you and your sales reps, but in some cases, it may be appropriate to invite other people. In more technical sales, for example, you might invite a sales engineer to the forecast meeting to provide feedback on the technical aspects of the deal or to confirm the technical win. Often times, as your sales team grows, a very well-trained and trusted resource such as a sales engineer can offer valuable insight from the front lines. For instance, the sales engineer may have additional insight into the deals that her or she has been involved with, or information about new technologies and competitors that you or your reps may be competing with on deals.

However, be cautious not to let any other meeting participants undermine a rep’s forecast. Reps should own their forecast. If they start to feel like you or someone else is setting it for them, you risk losing their trust.

Tip 4: Recognize That What You Say — and How You Say It — Matters

One thing to keep in mind throughout the entire forecasting process is that the goal of forecasting is accuracy, not getting to quota. This is where the art of management becomes very important. The forecast review meeting is an opportunity to hold sales reps accountable and to really analyze their deals. However, you do not want to put them in a situation where they’re simply telling you what you want to hear for fear of how you might react if they tell you the truth.

With sales reps, it is important to establish up front that the ultimate purpose of the forecast review meeting is to improve accuracy. If a sales rep misses his quota, but hits his forecast dead on, that’s a better end result than if the forecast was wrong altogether. After all, that situation allows you to deliver a more accurate forecast to management, making you look better, and improving management’s ability to make informed decisions.

Ultimately, your success depends on the success of your reps. When you dig into their deals, it’s with their — and your — best interests in mind. You are keeping them on track with each deal and helping them get better at their jobs. While it is important to ask tough questions, how you ask those questions is just as important. You must ask them in a way that makes the reps realize you are trying to be helpful by encouraging honest answers and accurate forecasts rather than fixating on them hitting the quota.

Tip 5:  Identify the Right Meeting Frequency

The forecast meeting should be held with every sales rep at least once a week regardless of the length of your sales cycle. Quite simply, unless you are reviewing the business that is closing on a weekly basis, you don’t know your business. That’s a good philosophy for any VPs of sales at an expansion-stage company to live by. If you have a shorter sales cycle with a low average sale price (ASP), you will probably be focusing on the many deals that are closing within the next week. If your sales cycle is longer with a high ASP, there may only be a few deals forecasted to close. That doesn’t mean you should have less frequent meetings. Rather, it just makes it even more important to stay on top of those deals. Consider a rotation of rep, and day, and time. Be mindful that the detail discussed within these meetings can be exhausting for the VP of sales to absorb.  Stagger your forecast review meetings throughout the day and week:  stacking back-to-back-to-back forecast meeting is never a good idea.

What are some best practices you have developed in your sales forecast meetings?

To find out more, check out OpenView’s eBook: “Sales Forecasts: A Question of Method, Not Magic.”

VP, Sales

Ori Yankelev is Vice President, Sales at <a href="">Own Backup</a>. He was previously a Sales and Marketing Associate for OpenView.