FOUNDER’S GUIDE TO B2B SALES THE WORD “COMMIT” Sales leaders use the word “commit” in different and potentially confusing ways Some use it as contract between seller and manager on a given deal That means, if you “commit a deal,” you are personally guaranteeing it will close. This is often combined with early-quarter pressure to commit certain deals, which is then used to increase pressure on the seller later in the quarter (“you committed that deal, now you have to win it.”). This is a high-pressure sales management technique that is increasingly going out of favour. Others use “commit” as a synonym for “forecast” (or high-confidence forecast) Asking, “Jane, what’s your commitment for this quarter?”. I would suggest using “forecast” with a probabilistic definition (e.g. 90%) instead. Many use “commit” as a forecast category for a given deal Typical forecast categories and associated probabilities include: pipeline*/unlikely 0%, upside 30%, forecast** 70%, commit 90%. *Using “pipeline” as a forecast category is indeed confusing, but is still fairly common. “Unlikely” is an alternative, preferred term. **Using “forecast” as a forecast category is potentially confusing too, so ensure the context is clear. TRIANGULATION FORECASTS You should ask the head of sales for a forecast every week to ensure: • Accountability • Incorporation of new information • Ability to analyse trends You should triangulate that against other indicators, such as: • Pipeline coverage – value of pipeline / target (typically on a to-go basis) • Rep-level forecast – the sum of the individual sellers’ forecasts will be typically larger than the head of sales forecast, but not always • Expected values (also known as weighted pipeline) with the expected value of the pipeline calculated based on weights assigned to stages or forecast categories i.e. If we have $1,000K in stage 5 with a 40% probability of closing, then the stage- weighted expected value of that pipeline is $400K SPRING 2023 .26