REVENUE | SALES MANAGEMENT
Enterprise SaaS: Do these 6 things now to make your number for the quarter and the year
How comfortable do you feel about hitting your revenue quota for Q3?
If you have any misgivings, you’ll want to read this article.
It offers a 6-step process to get your revenue on track to achieve your overall quota this quarter and all future quarters.
The process comes from John McMahon, a 5-time chief revenue officer (CRO) of major enterprise SaaS companies.
Who should read this
This article is for chief revenue officers (CROs) and sales leaders in B2B SaaS companies that sell high-consideration deals.
The article is also useful for chief executive officers in companies that don’t have reliable, well-established processes for forecasting revenue.
Why it matters now
Desired outcome or results
And once you see how well these steps work, you’ll be more likely to beat your number in all future quarters.
Do these 6 things now
1. Conduct a thorough, skeptical review of deals in the forecast for the current quarter.
Requalify every deal you’ll need to achieve your revenue goals.
It’s best to know early in the quarter where you stand. Don’t wait until it’s too late to fix any problems you may uncover.
Ask your reps tough questions about their forecasted deals and pipeline opportunities early in the quarter.
Don’t be afraid to face the reality of potentially very bad news. Only through effective listening skills, zero bias, and great probing questions will be able to truly understand what’s happening.
The situation is what it is. Don’t bias yourself and let other opinions make you believe circumstances are something other than what they are.
Don’t trust your reps’ judgment that the deals they’ve forecast are fully qualified.
2. Qualify your reps’ knowledge of each deal forecast for the current quarter.
Use the MEDDPICC framework to qualify each deal. The acronym stands for these qualification elements:
- Economic buyer
- Decision criteria
- Decision process
- Paper Process
- Implications of pain
A future Driven article will describe each of the qualification elements in detail. It will also offer a downloadable PDF file with questions to ask reps for each of the elements.
In the meantime, you can also learn how to use MEDDPICC by reading Source 1, below.
Why not use a simpler qualifying framework such as BANT (Budget, Authority, Need, and Timing)?
MEDDPICC offers these advantages over other qualification frameworks:
- You can quickly spot which deals are strong or weak.
- You can locate where you are in your sales process and the customer’s buying process.
- You can see the difference between what you know and what you need to know to close the sale.
- You can build a strategy and action plan to get a deal back on track.
- You can assess the knowledge and skills of your sellers.
3. If any deal doesn’t stand up under review, take it off the forecast for the quarter.
For every deal that stays on your forecast, you should see lots of evidence it can close in the quarter. If you can’t uncover solid evidence, push it off.
Some sales leaders leave weak deals in the forecast because they don’t want to face the bad news. Or maybe they want to show they trust their reps.
But leaving weak deals in the forecast doesn’t increase the likelihood they’ll close.
Taking weak deals off the forecast does 3 things:
- It forces the rep to provide more information about the account. The rep may provide evidence you need to feel confident in forecasting.
- It shows your reps the additional work to be done.
- It often leaves the rep short of their quota. The rep has to reconcile the gap between their forecast and their quota. They must find other deals to replace the revenue that was pushed out.
4. Generate a preliminary forecast of the deals that are left.
Add up the revenue you confidently expect for each deal you’ve thoroughly vetted.
Calculate your overage or shortfall.
5. Go through a forecast reconciliation process.
If your vetted forecast is short of your revenue goal, reconcile your forecast to your goal.
You do this to spread the pain and burden of the forecast shortfall across all members of your sales team.
Reconciliation occurs in 3 steps:
A. Reconcile the shortfall with each rep:
The target for forecast reconciliation should be 4x the forecast shortfall, assuming a 25% probability of closing the shortfall revenue.
B. Each rep then creates a forecast reconciliation spreadsheet by deal stage:
Example of a rep’s forecast reconciliation spreadsheet
This spreadsheet, prepared by the seller, shows the current revenue forecast for the quarter. It shows how much revenue the rep as forecast for each account, by the deal’s current stage in the sales process.
C. Each rep writes a list of specific activities they’ll perform to close the revenue they need to fill the gap:
Example of a rep’s list of activities to fill her forecast shortfall
6. Meet with the Champion in each account where a deal is forecast for the quarter.
The sales leader should also visit with the Champion in each deal that was newly generated through the forecast reconciliation process.
You’re already well into Q3. If you take these 6 steps immediately, you can greatly increase the likelihood you’ll achieve your revenue goals.
You still have time to fix problems in your pipeline, but only if you act early.
The Qualified Sales Leader: Proven Lessons from a Five-Time CRO. John McMahon. Dev Ittycheria. 2021.
MEDDIC: The Ultimate Guide to Staying One Step Ahead in the Complex Sale. 2020. Andy Whyte.
Always Be Qualifying: MEDDIC / MEDDPICC. Darius Lahoutifard. 2020.
All of these books are solid, and all are written by people who practiced the MEDDPIC qualification framework at the time it was developed at PTC Inc., the company where the framework was developed and refined.
If you’re new to MEDDPICC, I suggest you start with John McMahon’s book. It’s concise and readable, and it includes questions you can ask to qualify reps on all the elements of the framework.
About this article
Driven issue number: 68
Date of publication: July 31, 2021
Date of most recent revision: July 31, 2021
Writer: Dave Vranicar
Publisher: SilverStream LLC
Copyright: © 2021 Silverstream LLC. All rights reserved.