Solving the Sales Forecasting Problem

Switch from sellside to buyside forecasts in your CRM system.


Ian H Smith

Everyone engaged in selling high-value products or services, or fundraising for nonprofits, will recognise the sales forecasting problem. It is sales people telling managers what they want to hear, a Close Date that is usually too optimistic and an Opportunity Value that has not been validated.

The answer to this problem is this: switch sales forecasting from the sellside to the buyside. This is easy to implement in any CRM system, with the aid of Web Forms integrated directly to specific Opportunity Records. This also has a great counter to deal slippage.

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However, culturally, it is transformational and will encounter significant levels of resistance.

So this topic is all about how to enable Buyside Forecasting. How to coach sales professionals and other market-facing team members to be confident in making this work. This means learning and continuously improving their abilities in the following areas:

  1. Engage in Mutual Value Discovery to build receptivity, rapport and trust. When engaging with decision-makers, sales professionals need to learn how to communicate conversationally, without Powerpoint 'pitching'. This is engaging in Mutual Value Discovery, learning how to rapidly develop receptivity and rapport, which in turn, leads to trust. With trust the sales professional will now get the truth from the buyer.
  2. Apply Value Engineering to defend value over price. In sales forecasting it is two fields in a CRM Opportunity Record that matter most: Opportunity Value; and, Close Date. Value Engineering is a way to engage a trusted buyer in the truthful calculation of answering a key question: what is the cost of NOT buying the solution offered? This becomes a Return On Investment (ROI) Modelling of both Opportunity Value and Close Date. The Opportunity Value relates directly to the buyer's ROI Calculation and the Close Date relates to a calculated Cost of Delay or Cost of Doing Nothing. This Time-Based Value calculation counters deal slippage.

With 1. and 2. we now have sales professionals and others fully equipped to guide decision-makers through what becomes Buyside Forecasting, submitted to the sellside CRM system via a connected Web Form. However, the key enablers here are sales professionals armed with the ability to engage in Value Engineering, underpinned by an ability to build receptivity, rapport and trust with decision-makers in a Mutual Value Discovery.

At Being Guided we are offering a free 30-minute Discovery Workshop to business leaders who want to measurably increase operational effectiveness. This is an introduction to our interpretation of Mutual Value Discovery and Value Engineering and how it can make a real difference to you, if you are engaging in a knowledge-intensive product or services organisation.

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1. Engage in Mutual Value Discovery

Identify and Analyse Needs 
Engaging with potential buyers to understand their specific needs, challenges, and what value means to them in the context of the product or service. This must compare Current State (without investment the product or service) and Future State (with investment in the product or service).

Evaluate Function versus Cost
Analysing how each function of the product or service contributes to its overall cost and the perceived value to the buyer. The goal is to optimise this balance and maximise value, underpinned by measurable value outcomes from a ROI Model.

Simplify and Optimise
Looking for opportunities to simplify complex features or processes without compromising essential functionalities, thereby making the product or service more accessible and understandable to the buyer. This is one of our Design Principles: Fierce Reduction.

Communicate Value Effectively
Articulating the benefits and value of the product or service in a way that resonates with the buyer's specific context and needs. This often involves translating technical features into tangible benefits. This should recognise that this is combination of both an objective 'Economic Basis of Decision' and a more subjective 'Emotional Basis of Decision'.

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2. Apply Value Engineering

Value Engineering allows prospective buyers to input data and receive a calculation of the Return On Investment (ROI) they can expect from your product or service. By customising these calculators and integrating them into your CRM system, we create a compelling interactive experience for your prospects, building engagement and trust.

Here's are the advantages:

Enhance Prospect Engagement

Custom ROI Calculators provide a hands-on experience for your prospects. They can play around with different scenarios and instantly see how your offerings can impact their bottom line. This interactive process not only keeps them engaged but also educates them about the value of your products or services.

Achieve Data-Driven Insights

When prospects use your ROI Calculators, they input data that is crucial for understanding their needs and pain points. This data, when upserted into a CRM system, gives your sales team a clear picture of the prospect's expectations and how they perceive the value of your offerings.

Align Buyside and Sellside Perspectives

One of the most significant advantages of integrating ROI Calculators into a CRM system is the ability to compare the Buyside view (prospect’s input) with the Sellside view (your sales team’s estimations). This comparison can be incredibly insightful. For instance, if there's a significant discrepancy between the Opportunity Amount and Close Date as perceived by the prospect versus your sales team, it could signal a need for better communication or re-evaluation of the offering.

Counter Deal Slippage and Discounting

Time-Based Value (e.g. Cost of Delay) helps you to win timely deals and gives the buyer a solid foundation for maintaining a self-interest in a timely completion of purchase and a settled mind in your defending value over price.

Streamline the Sales Process

By automating the process of capturing and upserting prospect data into a CRM system, you reduce manual entry errors and save time. This efficiency not only speeds up the sales cycle but also ensures that your sales team has access to accurate, up-to-date information.

Customise for Specific Needs

Every tech firm is unique, and so are its customers. Customising your ROI Calculators to reflect specific use cases, industry standards, and unique value propositions ensures that the tool is relevant and effective for your target audience.

Build Trust through Transparency

Providing prospects with a tool to calculate ROI themselves enhances transparency. It shows that you're confident in the value of your offerings and are willing to let the numbers speak for themselves.

Identify Key Metrics
Determine the key metrics that matter most to your prospects and are relevant to your offerings.

Customise the ROI Calculator
Tailor the calculator to reflect your unique value propositions and ensure it aligns with your brand.

Integrate Seamlessly
Ensure the ROI Calculator integrates smoothly with a CRM system, allowing for automatic data capture and 'Upsertion'.

Ensure a User-Friendly Design
Make sure the ROI Calculator is easy to use and understand, even for non-technical users.

Train and Support
Provide your sales team with the necessary training and support to leverage this new tool effectively.

Return on Investment (ROI) is a metric used to evaluate the profitability of an investment relative to its cost. When comparing a Current State (As-Is) to a Future State (To-Be), the formula can be adapted to represent the net benefit gained from purchasing a product or service relative to the cost of making the purchase.

The Buyside Amount is generated by a ROI Model; not a price list, nor an unchallenged copy of the Sellside Amount. As illustrated in the examples below, ChatGPT 4 is a powerful Co-pilot in applying Prompt Engineering to create appropriate ROI Models that makes sense to both buyer and seller.

Here are some examples of ROI Modelling created with ChatGPT 4 Prompts.

Firstly, the general ROI formula:

ROI = (Cost of Investment / Net Profit​)×100%

To adapt this formula for an As-Is vs. To-Be comparison, consider:

Net Profit: This will be the difference in profits between the Future State (To-Be) and the Current State (As-Is).

Cost of Investment: This is the cost incurred to move from the Current State (As-Is) to the Future State (To-Be).

Given the above considerations, the formula becomes:

ROI = (ProfitToBe​ − ProfitAsIs​​ / Cost of Transition) × 100%


ProfitTo-Be = Profit or (benefit) in Future State
ProfitAs-Is = Profit (or benefit) in Current State
Cost of Transition = Cost to move from As-Is to To-Be

Note: If you're measuring benefits other than strict monetary profits, such as time saved or other intangible benefits, ensure you can convert these benefits into a monetary value for this calculation to be valid.

To calculate the Return On Investment (ROI) from Digital Innovation with the specified inputs, we can formulate several equations. Let's define the variables first:

BVAs-Is = Current State (As-Is) Business Value generated per annum without Digital Innovation.
BVTo-Be = Future State (To-Be) Business Value generated per annum after investing in Digital Innovation.
CDI = Cost of Digital Innovation as a Recurring Annual Subscription.
ROI = Return on Investment as a ratio relative to the Cost of Digital Innovation.
CoD = Cost of Delay per day when not investing in Digital Innovation.
CoDN = Cost of Doing Nothing per day when not investing in Digital Innovation.
CoDday = Cost of Delay per day when not investing in Digital Innovation.
CoDNday = Cost of Doing Nothing per day when not investing in Digital Innovation.

Calculating ROI from Digital Innovation:
Net_Gain - BVTo-Be - BVAs-Is

Calculating ROI:
ROI - Net_Gain - CDI / CDI
The ROI is expressed as a ratio. Multiply by 100 to get a percentage.

Cost of Delay (CoD):
This represents the loss per day by delaying the digital innovation. Assume the delay starts from the beginning of the year and goes on for d days:
CoD = BVTo-Be - BV As-Is (d x CoDday) - CDI / CDI

Cost of Doing Nothing (CoDN):
This is the loss per day for not implementing the innovation. Similarly, for d days:
CoDN = BVAs-Is - (d x CoDNday) - CDI / CDI

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Remember, there are two key elements in enabling the switch to Buyside Forecasting:

  1. Engage in Mutual Value Discovery.
  2. Apply Value Engineering.