Today's post is by K. V. Rao, co-founder and CEO, Aviso.
A sales leader’s life is a hard one, albeit with rich rewards if one can deal with the tremendous pressure and a million distractions from focusing on what is really important – killing the number.
There’s a never-ending pile of email, long sales, marketing and executive meetings, and, of course, tedious sales forecasting calls. That last bit, sales forecasting, is actually the most critical business process to ensure a credible and confident roadmap to making the quarterly number – but that process itself is broken.
“Happy Ears” (and Other Forecasting Challenges)
In many large enterprise organizations, it can take a sales leader’s operations team days to develop a reliable forecast. Often this process involves manually consolidating hundreds of spreadsheets that contain both estimates and complicated formulas trying to take into account judgments that are too often based on intuition and “happy ears” – and not tempered with data-driven analysis.
These are some of the reasons forecasts are not living up to their full potential:
- data is not real time,
- outlook is too optimistic late into the quarter,
- opportunities that are quietly at risk are overvalued
- hidden golden opportunities are missing because they weren’t recognized (and resourced) in time to save them.
This is the stuff that keeps sales execs up at night, particularly when it’s nearing monthly or quarterly end. They are looking for smarter business insights that are really hard to extract looking in CRM alone.
There is no question the data in a company’s CRM is critical and valuable to the business. The CRM market grew 13.3 percent in the past year, from $20.4 billion in 2013 to $23.2 billion in 2014, and that number is expected to have grown in 2015, according to Gartner Research.
Of course, every B2B sales team relies on CRM, but, even after all of the investment in a CRM system, why does forecasting remain so difficult, time consuming, and – more importantly – unreliable in meeting and exceeding plan?
The Power of Data Science
Two words – data science. There’s a lot of buzz around this term lately, but do we all really understand what it is and what it can do for sales?
Early on, my co-founder, Andrew Abrahams (who led all quantitative research initiatives at JPMorgan Chase) and I understood that, if we could bring data science to sales, then we would really have something. It’s the closest thing to a crystal ball for sales.
One spreadsheet and one brain can process a few elements, but, when considering the performance of dozens – or hundreds – of salespeople, regional environments, seasonal trends, and a constantly fluctuating pipeline, it’s nearly impossible for one person to get to a reliable and confident path to making the number.
Every day, every quarter, sales executives bet their jobs on numbers – numbers that hold them accountable to the executive team, to the board, and sometimes to public markets. Easier said than done, unless you have Aviso. OK, that was a shameless plug, but I always like to have our customers talk for us.
Rickie Goyal, director of worldwide sales operations at Nutanix – and an Aviso customer – gets it. For one quarter, Rickie continued with his spreadsheet process and ran Aviso side by side to see how Aviso performed in comparison to his tried-and-true method. After Aviso predicted quarterly revenue within a 4 percent margin (and they could have actually hit the exact number), Rickie and the executive team were convinced. The spreadsheets are now gone and reps just input their numbers directly into Aviso and data science does the rest.
Rickie summed it up beautifully. “Aviso is our forecast. I’m not going to make a business decision just based on information from a guy who doesn’t want to get fired. I want to make a decision taking into account what the data science tells me is going to happen.”
And isn’t that what we all want?