How to navigate downturns and adapt to market changes with Mark Cranney, Go-to-Market Advisor
Aug 21, 2023
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Mark Cranney, Go-to-Market Advisor, discusses the importance of accurate sales forecasting and business planning. He emphasizes the need to make the pipeline visible for investment decisions, focusing on accurate forecasting, problems with untrustworthy data, the importance of a five-quarter view, navigating the current market climate, and book recommendations for revenue leaders.
Accurate sales forecasting is crucial for revenue leaders at all levels, as it determines the health and success of the business.
Forecasting accurately is the most important aspect of revenue leadership.
Implementing a five-quarter forecasting cycle allows revenue leaders to gain valuable insights and make informed decisions.
Deep dives
The Importance of Accurate Sales Forecasting
Accurate sales forecasting is crucial for revenue leaders at all levels, as it determines the health and success of the business. It involves a bottom-up and top-down approach, with a focus on qualification and scrutiny. Understanding the sales process, granularly tracking each stage, and ensuring qualification for advancement are key. A 3D view of the business, including individual accounts, geographies, and segments, is necessary. Accurate forecasting requires efficient tooling that provides engagement data, leading indicators, and visibility into the pipeline. The ability to make management adjustments and spread risk or upside across different teams and regions is vital. Proper forecasting drives decisions on investment, strategy, and customer success, contributing to overall business growth.
The Serious Implications of Incorrect Forecasting
Forecasting is not simply a roll-up exercise, but a fundamental business process with significant consequences. Revenue leaders must accurately forecast revenue to meet, beat, or miss targets. A lack of accurate forecasting results in financial leakage. Both under- and over-forecasting can be detrimental, impacting predictability, decision-making, and resource allocation. Accurate forecasting requires constant analysis and adjustment, looking beyond the current quarter to capture a comprehensive view of the pipeline. Tooling, like Clary, provides real-time data, reducing the reliance on unreliable or incomplete information. Revenue leaders must prioritize forecasting, even during challenging times, to make informed strategic decisions.
The Benefits of Utilizing a Five-Quarter Forecasting Cycle
Implementing a five-quarter forecasting cycle allows revenue leaders to gain valuable insights and make informed decisions. By extending their view beyond the current quarter, they can analyze pipeline growth, make data-driven headcount decisions, and strategize expansion. A comprehensive forecasting approach includes assessing historical data, understanding deal qualification criteria, and adjusting risk and upside across different groups. Additionally, a five-quarter view enables revenue leaders to adapt to changing market situations and identify potential risks or opportunities in new territories or verticals. It provides the necessary visibility to manage resources effectively, allocate budgets, and drive growth.
Navigating the Current Business Climate
Revenue leaders must navigate the current economic uncertainty by doing more with less and focusing on targeted efforts. Despite challenging circumstances, it is important to maintain a strong business strategy and execute it with determination. This period presents an opportunity to build resilience, muscle, and scar tissue, enabling revenue leaders to emerge stronger. Effective forecasting, supported by tooling like Clary, helps make strategic decisions, allocate resources, and adapt to market changes. By focusing on the objectives, strategy, and tactics outlined in Sun Tzu's 'The Art of War,' revenue leaders can approach their roles with a strategic mindset and achieve long-term success.
Recommended Book for Revenue Leaders: 'The Art of War' by Sun Tzu
'The Art of War' by Sun Tzu is a recommended book for revenue leaders. It provides valuable insights on strategy and tactics, highlighting the importance of objectives and the distinction between strategy and tactics. Revenue leaders can draw lessons from this classic text to approach their roles strategically and effectively navigate challenges in a competitive business landscape.
Conclusion
Accurate sales forecasting is a critical aspect of revenue leadership, impacting the overall health and success of the business. It requires a comprehensive understanding of the sales process, granular analysis, and constant adjustment. Implementing a five-quarter forecasting cycle provides valuable insights, enabling revenue leaders to make informed decisions and adapt to changing market conditions. Despite challenges, revenue leaders should approach their roles strategically, leveraging tools like Clary and insights from 'The Art of War' to drive growth and achieve long-term success.
It doesn’t matter where you are in the revenue organization, not knowing your forecast has dire consequences.
But the forecast isn’t just a number that you call in a meeting, or an outcome at the end of the quarter… It’s the fundamental business process.
Mark Cranney is a prominent figure in the venture seed investing landscape, specializing in assisting product-centric founders and startups in scaling their Go-To-Market operations. With his extensive experience and expertise, Cranney plays a vital role in advising and providing strategic guidance to these companies. In this episode of the Run Revenue Show, Mark talks about the importance of accurate sales forecasting and business planning, he provides insights on how to achieve predictability in sales, expand territories, and reallocate resources by understanding ROI, attributions for spend, and pipeline growth.
Here’s what’s inside:
Make your pipeline visible: Knowing the total pipeline and scrutinizing it is important for making investment decisions and enabling sales decisions. A healthy business requires understanding how the pipeline is growing in order to gauge when to put more headcount into play.
Focus on accurate forecasting: Forecasting accurately is the most important aspect of revenue leadership. A lot of work is needed from both a top-down and bottom-up approach to accurately predict business outcomes. By accurately forecasting revenue, businesses can optimize their operations, improve their financial performance, and stay ahead of the competition.
Competency in customer success and finance teams is necessary: This is what makes accurate forecasting. It doesn’t happen with just revenue leaders, but everyone involved in the go-to-market process should be held accountable. Data analysis is key in identifying trends and driving business decisions.
