Have you ever had an extra productive day and then used that day as the benchmark for planning your future output? “I wrote 2,000 words today. If I do that daily, I’ll have my book done in 6 weeks!”
But not every day can be your best. Maybe you can keep up for a few days, but life gets in the way. You end up blaming yourself for failure and wondering what went wrong. The actual issue isn’t your work ethic or ability, but the expectations you set for yourself.
The same problem frequently happens for sales teams, especially for BDRs. High expectations are set based on a limited point of view, and the team fails to hit them. You never want to set expectations too low, but what can you do to have predictable, consistent results?
Revenue and outbound forecasting depend on taking a bottom-up approach by always keeping your ICP (ideal customer profile) at the center of your pipeline generation and having accurate data.
Start with Your ICP, Not Your Goal
Let’s use fake, pretty numbers and go through the regular forecasting process. I want to hit $10 million in revenue this year. I take $10 million and divide it by the average deal size ($10,000). I need 1,000 deals. Per deal 1 that closes, I need BDRs to pass 10 leads to AEs. So, I need BDRs to pass 10,000 deals along this year, or approximately 834 monthly. I have 5 BDRs, so each has a quota of 168 leads per month.
However, something went wrong above. My goal of $10 million is based on what I want rather than what the data says is the ideal goal. If I plan my whole budget, hiring, and quotas around that goal and I miscalculated, I could end up losing a considerable chunk of my team to frustration and lack of funds.
So, what can we do better? If we follow the process for creating your ICP, we’ll know what an ideal looks like and how many are available in the market. Use intent data to see how many are active buyers versus passive. How many of each can a sales rep be expected to work at a given time? Your answer will vary based on your sales velocity. Finally, apply the 70/30 rule I covered in the last edition (reps working 70% outbound leads and 30% inbound leads).
Let’s say one sales rep can realistically pass 50 ICP accounts to AEs each month, and 10 of them close (win rates are up since all leads meet our ICP). If reps spend 70% of their time on outbound leads and 30% on inbound, they need access to 35 ICP leads for outbound work, ideally with buying intent, and 15 inbound leads from marketing.
Using the same numbers from above, our 5 reps lead to 50 closed deals a month and 600 a year. With my current team size and efficiency, I can forecast $6 million in revenue for the year. If I want to hit that $10 million, I’ll need at least 8 reps while maintaining the same level of efficiency.
Knowing my ICP has helped me set realistic quota goals and improve my closing efficiency.
Why Your Forecasting Depends on Your Data
Our forecasting calculations depend on two crucial data points: your ICP data and your sales efficiency (leads required for a closed deal). Both can be ruined by poor data or a lack of data.
Accurately finding your ICP accounts requires technographic and firmographic data. Without intelligently narrowing your target accounts, you’ll waste time on bad-fit accounts. Buyer Intent data is essential for prioritizing your leads. Your BDRs will love outbound prospecting if they know they’re talking to people already in the buying process.
They’ll also love access to human-verified contact data. Using SalesIntel and our free RevDriver Chrome Extension, sales reps can find accurate, reliable contact information either in SalesIntel, imported to their CRM, or in RevDriver while browsing LinkedIn or company websites. Finding and contacting qualified leads should be the easiest part of your rep’s day. Every moment not wasted on correcting inaccurate contact information for calling wrong numbers is another moment spent on productive sales conversations.
When handling forecasting, you want as much predictability as possible. If your team gets high-quality contact data for one quarter but not the others, they will get random results. But, with standardized data, your team will get consistent, positive results. Your data guarantees a BDR can pick up the phone and expect to reach a decision-maker at an ideal account with the intent to buy. All they need to do is make the pitch, and you’ve removed the randomness.
Predictable revenue forecasting comes from reliable data.
Outbound sales forecasting becomes predictable when your forecasting is based on data and has removed randomness.
- Don’t start with your goal for forecasting. Start with what’s possible based on your ICP account availability and sales rep efficiency.
- By knowing what each sales rep can accomplish, you know how much revenue to expect for budgeting, hiring, and overall planning.
- Your ICP and sales efficiency depend on access to human-verified data for technographics, firmographics, buying intent, and contact information.
- By targeting your ICP and high-intent accounts with accurate contact data, you remove the randomness which makes predicting revenue difficult and place success in the hands of your reps’ skills.