Sales forecasts suck

Sales forecast have little to do with revenue growth. It's a great method for coaching and training - but not managing revenue growth.

We discuss the limitations - and what you can do instead to manage revenue.

• (00:00) - Introduction
• (01:37) - The sales forecast
• (05:49) - This is what the salesforecast is for
• (08:21) - Tunnel vision
• (11:56) - The GTM forecast
• (17:00) - Building the GTM forecast
• (20:11) - How do you put this together?
• (25:05) - The rituals

Check out the bowtie post Toni mentioned here.

Creators and Guests

Host

Mikkel Plaehn

Marketing leader & b2b saas nerd

Host

Toni Hohlbein

2x exited CRO | 1x Founder | Podcast Host

What is The Revenue Formula?

This podcast is about scaling tech startups.

Hosted by Toni Hohlbein & Raul Porojan, together they look at the full funnel.

With a combined 20 years of experience in B2B SaaS and 3 exits, they discuss growing pains, challenges and opportunities they’ve faced. Whether you're working in RevOps, sales, operations, finance or marketing - if you care about revenue, you'll care about this podcast.

If there’s one thing they hate, it’s talk. We know, it’s a bit of an oxymoron. But execution and focus is the key - that’s why each episode is designed to give 1-2 very concrete takeaways.

[00:00:00] Toni: Hey everyone. This is Toni Holbein. You're listening to the Revenue Formula.
[00:00:03] In today's episode, we are going to talk about why sales forecasting gives you dangerous tunnel vision and why you need to look at the full funnel instead. Enjoy. The energy in the room is palpable.
[00:00:21] Mikkel: Is that word of the day? Yeah. Explain. What does it mean?
[00:00:25] Toni: You can touch it.
[00:00:26] Mikkel: Okay, you can touch the energy.
[00:00:30] Toni: Yeah, I mean, it's it's metaphors, you know. Have you heard about this? Sure. Talking about things metaphorically. Yeah,
[00:00:36] Mikkel: what does that mean?
[00:00:39] Toni: Hahaha.
[00:00:42] Mikkel: I'm just here to ask you questions. And it's just like my daughter, she's at the age now where it's like, why? She does the ten whys, not the five, the ten whys.
[00:00:50] Toni: So it's really like Lea was pointing out, was like, uh, Toni, you should do a sermon
[00:00:56] Mikkel: Yeah. That is so true. And now we're doing it actually. So we can tag her. We can tag her as legit. Uh, no. So, uh, we have been talking a bit about forecasting as of late and, um, Um, we've talked about it actually also in a previous episode, the sales forecast, and there are actually some fundamental issues that we're going to get into today.
[00:01:18] Toni: That's it. And also obviously what you should do instead.
[00:01:21] Mikkel: obviously what we're just not going to leave you staring into the void here. and that's what we're going to get into. So
[00:01:27] I mean, it is a bigger conversation, so I'm hoping you've done your homework for us to talk about this today. Let's see. As
[00:01:34] Toni: see about that.
[00:01:37] Mikkel: So sales forecast.
[00:01:39] Toni: Yes. The thing is, everyone on the planet is doing a sales forecast. it's number one job requirement for anyone in sales operations, revenue operations, right?
[00:01:49] Hey, we need to have a sales forecast. The CEO
[00:01:53] Mikkel: CEO
[00:01:53] Toni: is asking the CEO every day, how's the forecast going? The CEO is spending hours and hours and hours to grill the VPs, grill the directors, grill the reps on, is the forecast tight? Yeah. Yeah.
[00:02:07] Mikkel: Yeah?
[00:02:08] Toni: And, um, And all of this is, is, is good and, and, and such, but, um, really kind of when you think about what is the forecast actually for, what's the purpose of the forecast, I think if you're honest with some of these things, and we're going to go through the purposes here a little bit.
[00:02:23] you got to ask yourself, well, is it, is it actually achieving those purposes? Right. so let's just, let's just start with, it helps sales to achieve their goals. So we Googled a little bit and I think it's a HubSpot source. So, you know, why do you do sales forecasting? And you know, they did a great SEO thing, you know, on this.
[00:02:42] So that's kind of jump, uh, use this actually. And, you know, number one is it helps sales achieve their goals. So, to a degree, I would probably disagree with that. Um, it's, it's not necessarily helping you to achieve your goals. It, it helps you to know, uh, where you're gonna land. Whether or not that matches your goal or if it's below, that doesn't actually matter to sales forecasting or the sales forecast or this whole operation that's built around this, uh, this tradition almost, right?
[00:03:13] I think it's, it's a tradition really. number two, it helps identify early warning signs. I would also put a question mark to this. Yes, it will probably help you earlier that you're going to miss. But it tells you actually too late to do much about it.
[00:03:30] Mikkel: Yeah.
[00:03:32] Toni: It's an early warning sign. Yes, but whatever it's warning you for, you can't do anything about it.
[00:03:37] So then it's kind of, you know, it's kind of a useless early warning sign then.
[00:03:41] Mikkel: It's kind of It's like your car ran out of petrol now.
[00:03:44] Toni: yeah,
[00:03:45] Mikkel: Oh man.
[00:03:46] Toni: yeah, exactly.
[00:03:46] Mikkel: No, but it's also like we've, uh, we checked out some stats, uh, around how long it takes to create an opportunity. Which is what you're forecasting, right? And I think the marketing was like five to six months. I don't know about outbound, but surely it just does take some time, right?
[00:04:00] To get those into the pipe
[00:04:02] Toni: Yeah. I mean, it's really, it's, it's the, the, the sales cycle.
[00:04:04] And then it's actually not really the sales cycle. It's more like 60 percent of the sales cycle, because when something enters your pipeline, you're not going to use that for forecasting because you don't know, right? There's, you can ask the rep, Hey, is this still going to close? And I was like, Hey, I had my first meeting yesterday with them.
[00:04:22] Mikkel: like the guy, but it
[00:04:23] Toni: like a good chap, you know, so, so it really always will take a little bit until they have clarified their needs and, oh, yes, we have a solution that fits and, and around that time, their willow will not start to become, you know, forecastable, right? Where you have an idea of when they might close.
[00:04:41] Uh, for how much and how likely, right. and, and that really means if you have a three month sales cycle, you only have, what is it, six, seven weeks of forecasting window, really. Um, and to put it into perspective, if you run quarterly, a quarterly, business, basically, uh, you have three months sales cycles, that's great.
[00:05:01] but you can still up until the middle of the quarter, create new opportunities. that might still end up winning in that quarter. So that, that just gives you an understanding of like, Hey, this is, this is, this is difficult to kind of use as an, uh, potentially as an early warning sign. Right.
[00:05:18] Mikkel: Yeah.
[00:05:19] Toni: Then it helps you make better business decisions.
[00:05:22] Mikkel: Oh boy. About
[00:05:25] Toni: um, it's, it's hard to, it's hard to comment on this. Everything, you know, I would say everything helps you to make better business decisions. Right. And it's kind of, this is one of those fluffy ones where clearly the writer for HubSpot was like, it needs to be three. There need to be three
[00:05:41] Mikkel: It's the rule of three. Come on.
[00:05:42] Toni: that's what I learned. Uh, and one makes sense, two makes sense. What could three be, you know, what better business decisions, right?
[00:05:49] So, uh, we're obviously kind of pooping a little bit all over the sales forecast. Um, and it's, it's unfair to one main degree. I believe it's a great way, to enable your sales team.
[00:06:01] Mikkel: Yeah,
[00:06:02] Toni: That's how we need to think about sales forecasting. It's not there to, you know, hit more revenue and stuff. It's there to teach your sales reps, and what, what it should be used for in most cases. And there's a lot of time kind of going into this number one, trying to remove obstacles from it, you know, for your sales reps.
[00:06:21] It could be that there's something stuck on your legal side. It could be that there's a feature that needs to be, I don't know, written into the contract. It can be so many things where a rep is stuck and a forecasting meeting is a great way to have that conversation to, try and get this, the, the rep unstuck, right?
[00:06:41] And sometimes it can be things where, uh, someone doesn't have an idea how to progress a deal and then, you know, in that, in that forum, uh, you might actually get an idea, right? And then number two, it's really a way to teach and discuss, and train and practice the sales process that you have put in place.
[00:07:00] Again, it's sales forecasting really means, there's a probability that, that sales process ends in a, in a deal by that timeframe. And then how can you help, you know, push that through, right? and, uh, you know, bad forecasting signs like, hey, you don't know who the economic buyer is. Uh, you haven't talked to them in three weeks, you know.
[00:07:20] All of these things are signals that can, um, where you can, you know, teach the rap, so to speak, that, that is bad. You need, you need to figure out who the economic buyers, that should be your next step, or you need to jump on the horn with them and talk to them and figure out whatever the, you know, whatever's next out.
[00:07:37] That's a, it's a tool to help them work through this. And now, yes, sure, you can say that obviously kind of that in itself is, is helping improve your conversion rates and close win rates and so forth. I totally agree with this. but the, um, but that needs to be the, the central point of forecasting in itself, right?
[00:07:55] And, um, then you have this whole cascading and rolling up of everything. But the, the, the issue here is the, the only thing, um, that you're going to get more accurate about. as you, uh, you know, work through this is, is more accuracy or not by how much are you going to miss the gap. It will be extremely difficult at that point in time in a, you know, through a forecasting meeting to try and close the gap, right?
[00:08:21] What usually happens when someone sees there's a big gap coming, uh, this is where then, oh, you know, here are my committed deals and here are my, you know, best case deals and so forth. And. I mean, I've been sitting there many times myself and really what happens to hit target in those forecasting calls is, you know what, let's, uh, let's just be a bit more bullish on those best case deals.
[00:08:42] And, and what happens is they obviously don't come in, they don't close. So, you know, that, that's just what it is. You're left with that, right? and then the other thing is, really when you, when you think about what the issues are that are kind of hanging around this, well, it's really only focusing on, on the later stage sales.
[00:09:00] Steps, right, that limits your visibility into the future. it almost exclusively focuses on this quarter.
[00:09:09] Mikkel: Yeah.
[00:09:11] Toni: sure, I've heard some fairy tales about some really, well organized, you know, sales teams that have conversations about next quarter and their pipeline and so forth. But in reality, it's really all, okay, I need to hit my fucking number this quarter.
[00:09:26] It's not anything else any later. It's... I have, I have today's Toni problems and, you know, tomorrow's Toni's problems. They can wait.
[00:09:35] Mikkel: Yeah, I want this commission check and then let's deal with the next one after.
[00:09:39] Toni: I need to make sure I don't get fired okay?
[00:09:41] Mikkel: Yeah.
[00:09:42] Toni: Um, so it's, it's usually only focused on this quarter, um, uh, which basically leaves you completely blind for the rest.
[00:09:49] Right. And I think to a degree this way of, I would call it tunnel vision. it's actually okay for your sales reps, for your sales reps, it's actually fine, you know, try and declutter the world around them. They have one target to hit and one target only, and they need to figure out how they're going to get there.
[00:10:06] And you know, then running it like this is the right way to do it. But, everyone else around those reps, they don't, they can't only, you know, see until the end of the quarter. Um, and I'm not talking about the CFO or something like this. Yes, sure, he or she, you know, will look for their hat. Uh, but the CRO the same, the VP sales the same and so forth, right?
[00:10:26] There need to be, you know, bunch of different people around, that need to start having an eye also on next quarter.
[00:10:32] Mikkel: Yeah.
[00:10:32] Toni: And, and the question really is how much does sales forecasting help you with figuring out where you're going to land next quarter? And the answer is not at all, like zero, right? Even for this quarter, it almost doesn't give you any tools to figure out how can you, you know, improve your chances to end up hitting this quarter.
[00:10:50] And, and that's, that's just fundamentally broken about this thing. Right. and my, my main kind of issue and saying kind of about sales forecasting and sales forecast, and when you sit in those meetings, the problem is never what you discuss in the meeting. The problem is what isn't part of the meeting.
[00:11:07] And, and, and those are all the opportunities, all the deals that you haven't created, that now should be part of that conversation to have a chance to close the gap and hit the target. The, you know, that's, that's really the issue. So really the, the conversation should be more about the stuff that isn't there, instead of talking about the stuff that is there, right?
[00:11:25] at least if, if the purpose is about, okay, how can we kind of hit this target? And that's, that's the problem, right? If you use it right, this is kind of, you know, wrap this up. Sales forecasting is a sales enablement session, or a sales enablement tool to number one, uh, try and determine if there are any bottlenecks, any blockers you can help them with.
[00:11:47] And number two, it's an enablement in the sense of teaching them and getting better and running the sales process and improving their chances to win and so forth.
[00:11:56] Mikkel: And some accountability as well, I guess. But the, so the funny thing is, if you look at a lot of the forecasting elements, they will be sold on, we will make you more predictable or you will hit your targets and blah, blah, blah, blah, blah, all that stuff.
[00:12:08] But if you look at the bow tie, Meaning your funnel end to end the sales stage is just one piece of the entire part of puzzle that creates revenue and I think you and I have talked about in the past the fact that account execs they they don't create revenue they close it they convert it so there's other elements to to cover in this whole process.
[00:12:28] Toni: absolutely. So I think I ran recently, I ran a LinkedIn post on this. And if you really imagine the bowties of those two funnels, connected together in the middle, if, if you then were to, you know, draw an area where sales forecasting really happens.
[00:12:43] It's literally at the, the, the middle bottom, small area of the whole bowtie. Right? So I forgot what the different areas are being called, but selection, I think, or something like that. Kind of that, that is the area where forecasting, sales forecasting comes in. And that can give you visibility throughout that stage.
[00:13:02] Um, but they don't know about anything that is further up funnel because you only look at the opportunity, and forecasting tools only look at the opportunity in that sense. Um, so you don't actually know, you know, what is coming down the pipeline, should it be more, should it be less and so forth. You don't know.
[00:13:19] And number two, what happens on the customer side? Like, really, it's, it's where probably 80, 90 percent of your revenue are sitting, and there's no forecast, no way to look into the future, right? There's no way. and, um, I think we feel that's a problem.
[00:13:36] Mikkel: Yeah, that's the problem.
[00:13:39] Toni: And the funny thing about this is,
[00:13:41] Mikkel: it's,
[00:13:44] Toni: it's so blatantly clear, it's staring you in the eye. but, um, it took also us, you know, a little bit of time to like, Hey, wait a minute, where's, who's, what do you use to forecast all the fucking rest here? and sometimes when, um, uh, when I talk with folks about this and show them just one slide, it's kind of bring home the, uh, the case and like, Hey, this is the bow tie.
[00:14:06] This is what you're using sales forecasting for.
[00:14:08] Yeah.
[00:14:09] What, what are you, what are you using for the rest, man? The answer is like literally nothing. Right. and I think this is, where we believe. Go to market forecasting
[00:14:19] Yeah.
[00:14:20] Is a,
[00:14:22] it's not better. It's, I don't think it's replacing sales forecasting, but it's a solution to look at the whole funnel end to end, and really use, use that as a way to forecast not just sales, but the, the stages for that, but in the funnel as well, you know, you can say awareness and lead generation and so forth.
[00:14:45] but, but just as much also the other side of the bowtie, which is, renewal, implementation, onboarding, upsell, churn and so forth, to really have one forecasting that looks at basically lead origination, uh, close winning deals, and then upsell and renewal. Right. Um, instead of only the. Uh, the new biz piece, if you will, right?
[00:15:10] So
[00:15:11] Mikkel: So basically a way to actually get more predictable and control over revenue production. So what,
[00:15:18] Toni: So what, so what is that thing solving then for you? Um, well, it extends the horizon by quite a lot. you're, you're not only looking at this quarter's revenue anymore, that's still part of it. Um, but it also allows you to look at next quarters and the one after, and you know, the one after that, um, it, it allows you to start, uh, forecasting the different other steps and stages you have throughout your entire funnel.
[00:15:48] Uh, meaning it helps you to forecast how many leads are we going to have,
[00:15:51] Mikkel: Yeah.
[00:15:52] Toni: which has an impact then on how many opportunities you're going to have, which then, by the way, has an impact on, oh, the sales forecasting meeting isn't going so well because, you know, we're missing those 30 opportunities that we really needed in order to close the gap.
[00:16:05] Right. and then, okay. As I'm adding more customers and I have, you know, my base, you need to forecast how many customers will I have? How much churn do I need to expect and so forth. Right. and. And the trick is, right, you can do this in an annual plan in Excel and all of this is kind of peachy and easy, but you actually need it on an ongoing basis.
[00:16:24] So how's, how's everything moving, right? Once you started missing some of those revenue targets, once you started missing some of those top funnel targets, you need to have a way from the here and now, from the today, to forecast the future, right? which is what sales forecasting is all about, right?
[00:16:40] Sales forecasting is not like, Oh, you know, I should have had a thousand opportunities that then convert down to access. Like, well, this is the pipeline I have and let's see kind of how much it closes. Right. And I think that I'm here right in the moment and I need to forecast more than just by the end of the quarter.
[00:16:56] that is what go to market, uh, forecasting can, you know, can help you with.
[00:17:00] Mikkel: okay So how do you go about?
[00:17:04] Actually building this out. What do you need in place in order to conduct go to market forecasting?
[00:17:08] Toni: Yeah, so
[00:17:11] You know, again, you know, what are the things we want to be solving for? So number one, it shouldn't be only for sales.
[00:17:17] Number two, it should be multiple quarters. It actually shouldn't only, so that might be clear to people, but it shouldn't only be new biz revenue. It should be a total revenue. Um, it's because you're looking multiple quarters ahead. It needs to be able to run different scenarios actually as well. Right.
[00:17:33] And, and therefore the, the focus. would be less on the sales rep and the deal. Really, this is what sales forecasting is all about, right? It's kind of, is this rep hitting target? And let me check his deals or her deals and see where there's risk there. It's all about that, right? It's again, sales rep performance, basically.
[00:17:55] Um, you would need to detach yourself from that level of looking at the funnel. and instead look at it from a, uh, initiative level or, or like a team level or a segment or channel or something like this, because those are number one, those are the levers you can pull in order to steer the engine.
[00:18:13] Right. But also number two. This is, this is the way you can look at, your engine as a whole and understand, you know, what is going well and what is not going well. you, you will not always look at the, you know, what maybe works for sales, like all the, the EMEA sales team is great and the US sales team isn't.
[00:18:31] That kind of works out, but that sometimes doesn't work for the rest of the funnel, actually. For the rest of the funnel, you can't say, you know, the SEO guy in the US is not, you know, delivering. That might be a root cause, by the way, but you would be much rather looking at the different channels. You'd be looking at maybe the different CTAs and so forth.
[00:18:51] Right. And similarly so on the, on the customer side. So really having that lens in order to manage that all the way through. I think that that would be kind of the level of granularity you need to be looking at order kind of to manage this pretty well. Right. And the outcome, um,
[00:19:07] I think they have two main outcomes here.
[00:19:09] Number one is really. it's really more predictability, in general, right. Um, just kind of make this clear. So, you know, go to market forecasting won't help you with, you know, fixing this quarter end, that's, that's not going to work anymore. but it can help you to make sure that, you know, next quarter end.
[00:19:30] Uh, you're kind of getting out of the funk. Um, and then number two, you know, because you have a bit more visibility and then, you know, through that comes predictability and number two is really starting to have a better understanding of what works and why for how much money. to drive this efficiency piece also in it, right?
[00:19:48] Kind of those are, those are, I think the main, main big ticket elements, if you will, that help you to kind of, move the machine forward, understand what's working, what's not working, replace some of the parts and start to get a. Smoother writes, if you will, less choppy, less, less all over the place results.
[00:20:06] and, uh, and, and actually kind of more, more, you know, efficiency actually coming out of this, right?
[00:20:11] And through this, right? So how would you put something like this together, right? Yes. When you think about sales forecasting in and of itself, it's, uh, usually stage based, has percentages there.
[00:20:24] It looks at those opportunities and then there's an override and maybe use some AI from like Clari or Gong or whatever. and, and, and really what this is, it's the, they're generating a, you know, a model of your sales process. That's kind of what they do. and in go to market forecasting, you will need to have a model for the whole go to market. Right? So you need to have an understanding how, how all of these things actually working together, uh, just instead of only on the sales process level, on the overall level. Right? number two, yes, you will be able to see past performance and, you know, project some of that stuff forward, but especially once you're starting to look, a couple of months into the future, a couple of quarters into the future, uh, you need to take that model and you need to.
[00:21:08] augment this a little bit, uh, by saying number one, maybe you want to run different scenarios, which is kind of that, that stands out because well, in sales forecasting, you can't do that. There's no way to kind of run scenarios. And I'm like, exactly. That's not a good thing. Um, you also don't need it.
[00:21:25] Don't get me wrong. You know, if you will, your commit and best case and all of that, those might be different scenarios to a degree. but you know, if you put the longer lens on. then things like different, um, different hires, different initiatives, different product releases and so forth, they might, they might impact your ability to generate revenue and you want to.
[00:21:46] You want to be able to forecast these things, right? Um, and, uh, so let's just say that's kind of plan quote unquote. and then ultimately, you, you will need to then kind of, as you walk through, you will need to be able and understand, okay, we are here today
[00:22:03] with all the best information that we have access to, which is, yesterday's data.
[00:22:10] which is all the updated information that I, as an operator, kind of have, you want to understand where, where is that going to land us by the end of this quarter, by the end of next quarter and so forth, right? And that's where really the forecasting piece comes in. And the reason why it's, why it's really difficult, is let's just say you're in April, uh, you have missed, Uh, revenue target here and there, and you have missed top funnel targets here and there.
[00:22:37] what you can save, you know, against your top down plan, you can say, Hey, we've been short here, here and here, on the revenue side and that's gap X. and you can say we were behind on hires and we are, you know, low on MQLs. You can say these things. That's it. Absolutely. What you cannot say is, okay, since we have been low on hires, and since we have been behind on MQLs, What is that, that impact already there?
[00:23:04] How is that accumulating towards a revenue problem into the future?
[00:23:09] Mikkel: Yeah.
[00:23:10] Toni: You cannot do this from a top down plan, or from, you know, the math behind it. And then number two, what you then as a, as a third thing really, really want to know is okay, so we have been behind on hiring. We have been low on MQLs. How is that information most likely going to impact our ability to hire going forward?
[00:23:31] And our confidence around this and how most likely is this going to impact our ability to acquire those MQLs. Going forward, right? And that's then , where the full funnel forecasting comes into play, right? It's really, okay , on the, so let's just stay on the silly MQL example, but on the MQL level now, you would understand, okay, best chances are.
[00:23:53] If we were to forecast out how the MQL is going to develop, that's what it's going to be. and how is that then in the future going to impact my, uh, ability to generate revenue? Well, by X, right? And if you bring those three things together, uh, revenue of already missed, top funnel target, you have already missed in the past and understanding how that is going to impact you in terms of revenue going forward.
[00:24:18] And then number three, top funnel miss that will translate into a top funnel miss also in the future and how that then impacts revenue.
[00:24:28] Only then you have actually a true forecast of how the, likely not this, but next quarter, the end of the year is actually going to pan out, right? That, that is a forecast.
[00:24:40] Mikkel: Yeah.
[00:24:40] Toni: And that forecast now gives you, clarity on how big the problem really is, which, CFOs, CROs, CEOs really, really like. It's like, okay, that's actually what it is. And it then also gives it the ability to, okay, so now that we know that we have a 2 million problem, we need to find a 2 million solution to this thing now.
[00:25:03] Mikkel: this. Yeah. Lickety split.
[00:25:05] Toni: Yes. And, um, uh, and this is, this is, this is the ability to do, you know, full funnel end to end go to market forecasting. That's what that helps you to achieve. Right. And, um, the. I think the, the interesting thing is the rituals around it. Um, they're actually very similar. when you think about you have.
[00:25:25] uh, you sit down on a weekly level with your sales rep to go through the forecast, right? I think on a weekly, you know, fortnightly, monthly, whatever level you would be sitting down as like, Hey, let, you know, how's the forecast for all of the different go to market stages looking like? How's that going to impact us?
[00:25:40] Who's owning what? Who's fixing what? and, uh, then you have a, Uh, what I recently learned is called a remediation plan. so you have that in sales, uh, forecasting like, okay, there's a problem coming up, you know, what are we going to do about this? You know, you're going to call Bob and Bob is gonna help you, you know, win this deal and, you know, I'm going to go there and, you know, we're going to.
[00:26:00] That best case, next time we meet, we need to build this into a commit case and all of that stuff, that's a remediation plan that you're checking in on and making sure you're doing the right things. While the same thing needs to happen across your full go to marketing, not just for sales, it's like, okay, so. MQLs
[00:26:18] Mikkel: Yeah.
[00:26:18] Toni: uh, you're low there, you know, what's the remediation plan? How are we going to get this back on track? Um, we're behind on hiring. How do we gonna, how are we going to fix that problem? How do we get back on track there? Right. Um, and then as you kind of go through this, um, you know, basically kind of this, this.
[00:26:35] You know, it's just a, it's just a wheel. It's like a circle, right? Uh, you fix these things, you log in, uh, you check in on them. You, you hopefully see that it's working out and you hopefully see that the gap that's being forecasted towards the end of the year is starting to shrink. So you're starting to put in, uh, measures in your remediation plan that are starting to hit.
[00:26:55] Mikkel: and work out.
[00:26:57] Toni: And then you can, you know, you can more and more, you know, for, see the forecast actually moving closer to where you want it to be. And that for me, my friend, that's, that's an early warning sign
[00:27:07] right there.
[00:27:08] That's a way to fix your gap right there. Uh, and sure, you know, I'll take helps better and, you know, make better decision, business decisions as well here.
[00:27:16] Um, but that is actually a way how it can use, uh, full go to market
[00:27:21] forecasting to help you fix that problem over
[00:27:23] Mikkel: time.
[00:27:24] Yeah. I think it's also something we've heard folks.
[00:27:28] Talk about being somewhat in a cadence and operating cadence, but likely so. And, and also my hunch is quite often, it's more of a, let's say, gut based forecast.
[00:27:39] Toni: Yeah.
[00:27:39] Mikkel: Um, you know, sure. A marketing leader will know what's coming in a quarter. They know, Hey, we were going to a conference there. So that's going to deliver roughly so and so.
[00:27:49] But using, using actual data to understand, Hey, if we don't get. 50 MQLs more from marketing next month. That's going to mean the month after we're going to miss out on 20 opportunities, which in two months time is going to be this amount of revenue. And that's, that's the superpower at the end of the
[00:28:04] Toni: I also think the reason why those sales forecasts are so exciting and interesting and why they're happening all the time, it's sure it's about revenue. Um, that's, that's more interesting. but it's also, you're looking into the future. You know, and you can be hopeful, you can be fearful, uh, all of, all of those emotions are rushing into you.
[00:28:27] When you look at the standard weekly or MBI or something like this, it's like last week we were like 2 percent behind target. It's like fucking boring, right? I don't want to know what happened last week. Tell me what's going to happen next week. Um, and, and all of those, all of those sessions, they lack the.
[00:28:45] forward looking piece that sales forecasting has and sales forecasting, therefore, I believe is just simply so much more interesting. Kind of the, the uncertainty of the future is so much more alluring, uh, than the stale past. Right. And, and also when you really kind of have a, uh, a clear way to talk about the future, it's.
[00:29:10] It's much more, let's just say almost energetic to make, you know, put in a plan in place, kind of fix them and plan is like, sounds like a big word, but just, you know, let's take some actions to fix this thing, please. Right. Um, I think, I think it's difficult, it's difficult to put the same energy behind
[00:29:27] Mikkel: Yeah.
[00:29:28] Toni: when it's always like, oh, you know, we were behind on, you know, whatever, uh, versus. Hey, we were behind on this and my forecast now says that because we are behind and we are likely going to stay behind This is gonna generate a you know 1 million get by the end of the year or half a million get by the end of next quarter What however you want to see it I think we now need to do something about this.
[00:29:52] Yeah. Right. Having, having that, that kind of, ability and, you know, talk about it. Yeah. I think that, that can be extremely powerful.
[00:29:59] Mikkel: But you know what? Also the power, and we haven't even talked about this, the power of spotting some of these things early as you have more options on the table.
[00:30:06] And some of those options are going to be Cheaper as well, versus if you let it, if you realize it at a forecasting stage, then already four months ish has passed, then you know what? Hiring that person a bit faster that you missed, it's not going to cut it. It's not going to cut it. Right. And, and so I think that, you know, just realizing the importance of those elements is key.
[00:30:26] If
[00:30:27] Toni: And so I was a VP of sales, by the way, that gets grilled all the fricking time on my forecast and you know, all this behind and you're going to miss. I would, I would love a way to get everyone else into the same grilling
[00:30:40] Mikkel: scene.
[00:30:41] Toni: all the time. And you know, really make sure, okay, I'm talking about the future.
[00:30:44] I'm talking about, I'm going to mess things up. But by the way, the reality, why I'm messing things up. Is at least to 50 percent carried by my friend Jack over
[00:30:54] Mikkel: Yeah.
[00:30:55] Toni: that's covering marketing and not delivering stuff, right? and, um, and, and I think building this out and having this, this also be clear, um, I think I would, why, why the fuck not?
[00:31:06] Yeah.
[00:31:07] Mikkel: And by the way, so subtle right hook here. We help you build the plan, the model and the forecast.
[00:31:13] Toni: I think people got that, but, uh,
[00:31:17] Mikkel: But so anyway, by the way, I kind of, I've realized something. I know, I know now probably I have a hunch why we're not getting as many reviews as we could be getting. I think there's a cap. on word count. So, you know, we've asked for lengthy reviews, 500 words. I don't think you can do that, actually. I think they cap it in iTunes.
[00:31:39] Toni: Yeah, that must be the reason.
[00:31:41] Mikkel: Yeah, That must be. Otherwise, still, leave a review, even in spite of, leave a review, 500 words plus.
[00:31:49] Toni: No, absolutely. If you like this, if you're still listening after 60 episodes and 35 minutes here now, um, give us a review, would, uh, help the cause a lot and, uh, thanks a bunch.
[00:32:00] Mikkel: Thank you, Toni.
[00:32:01] Toni: Thank you, Toni. Thanks, Mikkel. Thanks, everyone. Bye
[00:32:02] Mikkel: bye. bye.