FOUNDER’S GUIDE TO B2B SALES FORECASTING AND PROBABILITIES When it comes to forecasting: • Sellers tend to be optimistic (i.e. have “happy ears”) • Sellers tend towards imprecise language (e.g. “best case” or “if the stars align”) • Sellers tend to resist probabilities (e.g. “we can’t win half a deal”) To combat these tendencies, do the following: • Define the VP-level sales forecast number as a 90% probability – that is, they get to miss it once every 2.5 years • If you also want a best-case, define that as well – 90% chance of beating forecast, 20% chance of beating best-case • Use forecast category as probability of individual deals closing Define the forecast in terms of probabilities, but do not impose rules on how the forecast is made. • Most sales leaders use scenario analysis to arrive at their forecast. You should consider their forecast an independent prediction; use triangulation to see the bigger picture. How to train your VP of Sales to think about the forecast In this article, Dave Kellogg asks you to imagine this conversation in a Board Meeting between a Director and a VP of Sales. READ SPRING 2023 .25

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