The most important problem in any sales organization is managing the funnel to achieve an accurate sales forecast. Let’s look at two ways this core problem is typically handled.

Company A’s funnel process uses one of the most common approaches to forecasting, orienting their sales funnel to the steps of their sales process: qualification, opportunity identified, quote provided, demo delivered, and negotiation/closing. You already know what to do.

Company B uses a funnel based on the customer’s buying process. Each stage of the funnel identifies specific actions customers take as they move through the buying process: set up a meeting, acknowledge their pain points, meet with the second decision maker, define purchase criteria, request a proposal, etc.

Can you guess which sales funnel design leads to better forecasting accuracy? Right. Company B. By a wide margin. If your company has a sales funnel more similar to company A than company B, here are three tips to get you started making more accurate forecasts.

1. Define the steps in your sales funnel and CRM based on customer actions.

In Company A’s funnel structure, sales opportunities are tracked based on sales tasks performed by the salesperson. In a sales-focused sales funnel, it’s easy to be disappointed: a rep is confident that an opportunity will close successfully because he’s done everything he’s supposed to. But tracking the actions of sales reps doesn’t help you predict what a customer will do.

By contrast, Company B has specific criteria in its sales funnel that indicate whether a customer has completed one purchase step and is moving on to the next. The better a sales rep becomes at getting customers to complete next step actions, the more consistent and predictable the sales funnel becomes.

With a purchase-focused sales funnel like Company B has, if a buyer decides not to go through with it, alarm bells go off. Sales managers are alerted to the problem immediately and can intervene while there is still a chance to fix the problem and get the opportunity back on track.

2. Turn your reps’ perception of CRM from a pain to a win

The work of defining a customer-centric funnel has a second benefit: Any rep who thinks negatively about the extra time and effort required to enter information into CRM will quickly see the personal benefits of a Type B company approach.

Look at it this way: Company A’s sales funnel generates sales process statistics that are lagging indicators (data collected after a process is complete), such as how many calls, appointments, demos, and quotes have (or haven’t) been made. ). When this data reveals a problem with a rep, it’s too late for a sales manager to get involved with a specific opportunity and fix the problem. All managers can do is urge the rep to once again “try harder.”

Company B originally had a CRM system like Company A’s, but realized that its sales force was not using it well. Punishing people for not using the system didn’t work, and lagging indicators didn’t help anyone improve. They found that having a more customer-centric sales funnel was just the ticket to turning their CRM into something reps and managers alike would want to use. Salespeople can now be more accurate in describing which opportunities are moving forward or not, and they know where the pain points are. Additionally, sales managers have better visibility into customer actions earlier in the sales cycle and can provide more timely advice to sales reps.

3. Refocus your sales managers on training opportunities from start to finish.

At company A, forecasting is the process of tracking which opportunities are closest to being closed. That means sales managers typically get involved when opportunities are at or near the Deal/Close step, often stepping in to save the day if there’s a sign of trouble.

Company B’s system places much more emphasis on sales managers coaching reps through every customer milestone, from initial contact to post-sale follow-up. Managers more quickly recognize the importance of training the selling skills of early sales cycles so that their salespeople are better at getting more and better opportunities down the funnel first.

Proactive management of sales funnels and forecasts

As you may have noticed, the real difference between Company A and Company B is that Company A forecasts sales reactively, near the end of sales opportunities. Company B, however, is proactive. They see their funnel as a way to help them become truly customer-centric: During every step of the buying-selling process, their reps are thinking about what the customer needs to do to move forward with the purchase.

A better process leads to better forecasts, not the other way around. With a buy-focused sales funnel and early (and frequent) coaching, managers and sales reps have a much better idea of ​​which opportunities are likely to actually deliver and which are at risk, and can be much more confident. to predict which opportunities are gone. to close successfully.