Where is the best place to start improving the accuracy of pipeline and forecasting reports (currently off by at least 20% each quarter)?

If your pipeline and forecasting reports are only out by 20% each quarter better here is my advice on how to give them surgery:

- MEDDPICC for Qualification Rollout: This framework helps standardize how your teams are qualifying opportunities amongst everyone. This brings an extra level of discipline to your sales process and means you only move in well-qualified deals, making forecasts more robust.

- Revisit Your Opportunity Stages Again — Once more, make sure you have defined your opportunity stages in Salesforce clearly so that it is well understood and used consistently by every sales team member. If this is misaligned, your forecasts are out of whack.

- Analyzing Historic Data: go back to previous quarter and see where differences happened. Is there a particular stage known to be consistently overestimated? Leverage these insights to reset or recalibrate your forecasting assumptions.

– Weighted Probabilities: Rather than only caring about opp stages use more reasonable probability percentages for each stage that develops based on prior win rates. It puts some life into your forecasts, and accurately reflects the probability of converting deals.

– Weekly Pipeline Reviews: Schedule regular calls to review the pipeline in great detail. In this way, it will pick up any discrepancies or apparently merrily deals before they affect your metrics.

- Use Advanced Forecasting Tools: You can use advanced forecasting features on Salesforce or third part tools that offer predicative analytics to increase accuracy.

With the MEDDPICC approach and a lot of rigour in taking care of data hygiene, tightening this qualification process would definitely lead to better pipeline accuracy & hence forecasting as well.

To improve pipeline accuracy, I first look at the process related to sales forecasting:

1. How much of the process is (or can be) assigned to objective activities (ie contract signing, request for quote etc)?

2. How well are your salespeople trained on the non-automated aspects of pipeline and forecasting?

3. Are there aspects of your sales comp plan that are tied to pipeline?

4. Who is accountable for the accuracy of the pipeline? Does that person have the right tools/authority to coach/correct contributors who aren't accountable for the pipeline/forecast accuracy?

Those areas are low-hanging fruit for improvement.

From there, Salesforce has great AI tools (Einstein/Forecasting) to help analyze your past results to improve your forecast.

As someone with a background in data analytics, here's the big secret of data analytics: You need to know your process to confirm that the model is correct. Your data could be skewed by data inaccuracy and outlier deals. Salesforce Forecasting tools can help you refine a model, but without a consistent process that provides consistent data, you won't see great accuracy improvements.

How much of the process is (or can be) assigned to objective activities (ie contract signing, request for quote etc)?

If your first reaction is "What process?", that's where you need to start. What are the large categories of your opportunity pipeline?

Salesforce has a lot of out-of-the-box (OOTB) stages for opportunities. Not all may apply to your business. Refine these stages and define them, so if salespeople are moving stages manually, they understand what they are communicating when they move an opportunity to the stage.

How well are your salespeople trained on the non-automated aspects of pipeline and forecasting?

In Salesforce, specifically, salespeople can update stages and close probability independently. If you have field history tracking on for stage and probability changes, I would analyze that data to see if there are points of confusion in the process. Maybe there are too many similar stages. Maybe the team is manually moving opportunities to a stage that should be moved via automation (ie activated contract in Salesforce = "Contract Signed" stage), or adjusting probabilities without moving stages. This effort should yield areas to clarify and coach with the sales team.

Are there aspects of your sales comp plan that are tied to pipeline?

I've seen competing comp plans between sales and business development, where one is comped on deals closed and one is comped on pipeline. The people who were comped on pipeline would covert leads to opportunities and changed the stage to "in progress", which positively impacted their compensation -- and negatively impacted the accuracy of the pipeline and forecast.

If your company has a similar misalignment, there may be aspects of "opportunities" that are better managed through other objects, automation and/or permissions to ensure the integrity of your opportunity pipeline.

Who is accountable for the accuracy of the pipeline? Does that person have the right tools/authority to coach/correct contributors who aren't accountable for the pipeline/forecast accuracy?

Assuming that forecasting and pipeline is important in your organization, the work I've outlined above will help you identify and address the pain points, as well as develop/enhance coaching tools to ensure that all team members follow a consistent process. Consistent Data = More Accurate Pipeline.