Most B2B-selling organizations that we work with at Bluewolf adopt a selling methodology that contains five to seven basic sales stages.

These sales stages are the vertebrae of the sales organization: they help to escalate deployment of resource and attention, as an opportunity matures and approaches closure. Effective organizations use their sales stages as an internal language to ensure that sales reps and managers are properly qualifying and moving the right opportunities through their funnel.

However, few organizations go back to evaluate the effectiveness of their forecasting. While they spend enormous effort to train their sales reps and managers on using the right stage, these organizations don't actually measure their personnel’s ability to forecast correctly.

A simple sales process might include stages at 10%, 30%, 50%, 70%, 90%, and 100% (closed won). Good sales managers use these percentages to build a weighted pipeline. And, if they want to take it a step further, they evaluate their reps — as well as themselves — on the trailing outcome of those stages, retroactively reflecting on the number of deals closed at each stage.

For instance, if 50% of the revenue that was forecasted at 50% closes, then a sales organization knows that it is forecasting correctly. The same applies to all stages. Best-in-class organizations keep their forecasting accuracy slightly above their stages, ensuring that their forecast contains a conservative fudge factor.

Below is a great report we use in salesforce.com that accomplishes this:

This report allows our organization to constantly track the effectiveness of our forecasting — it even lets us build "forecast accuracy" into our sales compensation plan. Most notably, it builds a discipline to ensure that we are deploying the right resource at the right time to our sales opportunities.

Interested in learning more about optimizing selling stages? Join Greg Kaplan at Apttus Accelerate, June 17-18, to discover how delivering seamless customer experiences can increase revenue. Or, contact us to connect with Greg’s team.