Forecasting vs. Poker
Most Chief Revenue Officers (CRO’s) refer to these 4 cornerstone qualifying elements (motivation, money, methodology, market) as the Four ♣ Aces of forecasting for one obvious business reason. They don’t want to keep investing (gambling) more time and money on sales campaigns where they have zero Aces (meaning minimal or no alignment) with what a prospect wants, needs, or can afford. As such, there are at least three similarities between poker and selling that are easily recognized.
The three similarities are:
There are no guaranteed outcomes—everything invested is at risk.
There is only one winner.
When you draw a bad hand in poker, the wise decision is to minimize your loss and fold. The same applies in sales, but if your sales reps don’t know the reality of your position in the deal (as in how to qualify), they will always push to keep you in the game by saying “I don’t know what our chances are for getting this business but I know what they are if we pull out.”
Like in poker, #3 is the only one you can manage – the first two are simply rules of the game. That is why defining Critical Qualifying Questions (CQQ’s) are so important. CQQ’s are not only the basis of our Bankable Forecast process, they are also the roadmap for achieving shorter sales cycles. Today’s economy demands we know as soon as possible when an ‘opportunity’ is not really an opportunity for the business. Any sales rep can stay in a deal to the dead end – the CQQ based forecast process is specifically designed to eliminate that behavior and the related costs.
The Forecast Audit Trail
The reality of getting to Four ♣ Aces with an opportunity usually requires multiple prospect events, depending on your sales cycle. During the Critical Qualifying Questions process, each Ace added to the forecast has an audit trail back to the prospect discussion (who, when, etc.) and the answers given. When sales management meets with a salesperson to review their forecast, two drill-down questions need to be asked for each piece of business listed:
Explain how you confirmed the Aces claimed on the forecast. This becomes an audit review of the Critical Qualifying Question events for each Ace claimed.
What is your plan and schedule to qualify the remaining Aces with each prospect? Let the sales rep explain how and when s/he will either move the prospect up or out based on the Critical Qualifying Question events the sales rep needs to complete.
Forecast accuracy is the accountability objective built into the Bankable Forecast Process. Using drill-down questions to audit the Aces claimed and to review the rep’s plans for addressing the remaining Aces, provides the Chief Revenue Officer with both an objective, prospect-based forecast process and a quality assessment of the rep’s competence. The bottom line is the Chief Revenue Officer either gets a good forecast number or the rep gets a do-over assignment. Either way, forecast data only improves.
Carl Moe is the author of “Sales Revenue System 2.0”, a popular book that details the revenue system processes he implemented in his corporate executive roles. He is also founder of CRO Success LLC – specializing in restructuring B2B revenue systems for sustainable growth and optimized performance. He can be reached at 952.232.6720 or email@example.com