Something every sales manager should be aware of: Forecast Creep
There are a lot of things a CRM solution can do to help a company stay organized, share information, and track performance.
None of which this post is about. This post is about the thing I can’t find a CRM solution to provide that sales management should be keenly aware of — forecast creep.
Forecast creep is when you start a reporting period with a level of sales volume forecast to close and as the reporting period nears its end, the number notably changes and opportunities move to the next reporting period. What this shows is a salesperson, team or manager who doesn’t own their part of the business.
Forecast creep can kill a company and is a serious issue all sales and revenue managers should monitor.
Here are a number of reasons forecast creep is a concern. Forecast creep often means:
- The purchase cycle isn’t understood
- The salesperson isn’t working with the decision maker
- The salesperson doesn’t understand how decisions are made in the account
- The opportunity isn’t qualified
- There isn’t a driving mechanism in the account
Sales managers need to monitor the sales forecast for forecast creep and understand why opportunities move from date-to-date and reporting period to reporting period. Systemic forecast creep is a sign of underlying problems in the sales team.
Have you seen forecast creep in your sales forecast? What were some of the underlying problems that caused it? How did forecast creep affect your company?
Category: Leadership & Management
We’ve got stuff that drags out forever, and stuff the closes out of the blue. It’s so predictable, really, which ironically what a forecast is about. Lucky for us, the only damage is to the credibility of the sales people. But they are nearly all remote, so don’t sense what people at the home office have to say about them.
Hi Dave! Thanks for the thoughts. I have worked with companies with similar sales experiences — opportunities that lag well beyond the initial forecast and sales that fall from the sky to save the quarter.
The concern I have with that is we’ll never see the end coming.
All situations are different, but having been a person at the home office, I’ve been part of discussions wondering why we have a sales force that can’t own its part of the business and how much better we could perform as a company if we did. Just as some salespeople can’t see the next sale, some don’t see the layoff coming until it’s there.