Palo Alto, CA, July 19, 2022 – With economic headwinds blowing, just 27% of sales professionals agree that their revenue forecasting process delivers accurate results and only 24% of sales leaders are confident in their team’s forecast, making it difficult to properly plan, identify focus areas, and spur growth opportunities. These are among the findings of the “Reality of Forecasting Report,” a survey of 928 sales and revenue professionals on the state of revenue forecasting from Gong, the Reality Platform™ leveraging artificial intelligence to transform go-to-market teams.
In good times, revenue forecasting is difficult. The process is labor-intensive, requiring input from an entire revenue organization and the consolidation of thousands of data points, from multiple sources, across multiple tools. It’s also convoluted, using a combination of historical models, anecdotal data, and “gut feelings” on deals in process to predict future sales.
Today, accurately forecasting revenue is more challenging because of growing economic uncertainty, international conflict, and other external factors outside of a company’s control.
Across all respondents, external factors had the third most significant impact on forecast confidence, behind only internal perceptions and opinions and lack of visibility into deals. As a result, more than half of all respondents (52%) report placing greater emphasis on producing an accurate forecast due to current economic uncertainty. In addition, Gong’s “Reality of Forecasting Survey” showed that:
- Forecasting is critical – 63% of respondents indicated that sales forecasting was highly critical to the success of their business;
- Confidence is low – Just 24% of leaders trust the forecast commitment from their sales reps, and only 58% trust their own commitment;
- Inefficiency reigns – Only 22% of leaders agree that their current process is efficient spending an average of 4.9 hours each week on forecasting;
- Missing big – 52% of leaders report their organization regularly misses its forecast by more than 10%
- Perception vs. Reality – Organizations using insights directly from customer interactions (reality) were twice as likely to report accuracy within 5% of their monthly forecast when compared to those that rely on data entered by sellers. (22% vs. 11% respectively)
In the report, Gong identifies how the adoption of four principles throughout an organization can transform the forecasting process:
- Reality-based – Stop using the “I feel” or “I think” of reps and managers; instead capture real-time customer interactions to get visibility into every deal exactly as it happens.
- Efficient – Reduce manual efforts across the organization by automatically capturing all activities and using AI to deliver insights to the right person for the next impactful action.
- Aligned – Keep your entire organization on the same page by streamlining your forecasting process into one unified platform.
- Leading – Don’t rely solely on historical data like pipeline coverage and historical win rate to predict future outcomes; instead, capture the unfiltered voice of the customer to identify leading indicators of closed/won deals or potential red flags
“As a sales leader, driving consistent, predictable revenue for your business is what it is all about,” said Gong Chief Revenue Officer Ryan Longfield. “Forecast accurately quarter after quarter ensures the entire organization is aligned to a revenue number that can be trusted to guide strategic planning, identify opportunities, and drive overall growth. Yet so much of forecasting has been based on opinions and incomplete, expired information. Our report shows that injecting reality into forecasting is critical to consistent accuracy, especially in tough economic times when using historical data to predict the future is no longer reliable.”
To download the full Reality of Forecasting Report visit the report landing page.
Gong unlocks reality to help people and companies reach their full potential. The Reality Platform™ autonomously empowers customer-facing teams to take advantage of their most valuable assets – customer interactions, which the Gong platform captures and analyzes. Gong then delivers insights at scale, enabling revenue and go-to-market teams to determine the best actions for repeatable winning outcomes. More than 3,000 innovative companies like Morningstar Inc., Paychex, LinkedIn, Shopify, Slack, SproutSocial, Twilio, and Zillow trust Gong to power their business reality. For more information, please visit www.gong.io.