The Role of Revenue Operations in Enterprise Sales Pipeline Forecasting
- Wade Olcott
- Sep 24, 2024
- 3 min read
Updated: Nov 20, 2024
In enterprise sales, a well-managed pipeline forecast is essential for accurately predicting revenue and driving strategic decision-making. While sales teams are primarily responsible for forecasting their pipeline, Revenue Operations (RevOps) plays a key role in setting standards, providing tools, and ensuring consistency in the process. Here’s how RevOps contributes to sales pipeline forecasting, while empowering sales to take ownership of the forecast.
1. Sales Ownership of Forecasts
It’s critical to establish from the outset that the ownership of pipeline forecasts rests squarely with the sales team. Revenue Operations provides the structure and tools to make this possible, but it does not deliver a forecast independent of sales. The goal is for RevOps to enable sales with the resources needed to generate their own pipeline forecasts.
2. Setting Standards for Sales Stages
RevOps sets standards for each sales stage to create consistency across the pipeline and align forecasting with the overall sales methodology. This involves:
Stage Gates in CRM: One of the most important responsibilities of RevOps is to ensure that the CRM (Customer Relationship Management) system has clear stage gates. These gates define what is required to move an opportunity from one stage to another. For example, before moving an opportunity from the "Proposal" stage to the "Negotiation" stage, certain conditions (like receiving feedback from the client) must be met. RevOps can place rules in the CRM to enforce these standards.
Standard Probabilities: At each sales stage, RevOps can set default probabilities that reflect how likely an opportunity is to close. These probabilities can then be applied to the Annual Contract Value (ACV) or opportunity size to provide a weighted forecast. For example, if an opportunity is at a stage with a 50% probability, the forecast would account for 50% of its ACV.
3. Sales Flexibility with Overrides
While stage-based probabilities offer a useful baseline for forecasting, RevOps can allow sales teams to override these probabilities when necessary. This flexibility helps sales teams account for specific insights about a deal that might not align with the standard probability for a given stage. For instance, if a deal is in the early stages but the seller has strong evidence of a high likelihood of closure, they can manually adjust the probability.
4. ACV Weighting and Adjustments
The primary pipeline forecast is generated by multiplying the ACV by the stage-based probability or any override the seller provides. This weighted value gives a more realistic projection of expected revenue, allowing sales leaders and executives to see a clear picture of potential outcomes.
5. Educating Sales on Close Dates
Another key element in pipeline forecasting is setting realistic opportunity close dates. RevOps can educate the sales team on how to adjust these dates and ensure that they align with the stages and probabilities. The probability overrides and the current sales stage should always be in sync with the projected close date, as this directly impacts the accuracy of the forecast.
6. Simplified Forecasting Levers for Sales
RevOps should aim to simplify the forecasting process by giving the sales team three main levers to adjust their pipeline forecasts:
Move the Close Date: Updating the expected close date of an opportunity when new information arises that affects timing.
Change the Sales Stage: Moving an opportunity through the pipeline stages when key actions or criteria are met.
Override the Stage-Based Probability: Manually adjusting the probability of closure for an opportunity when specific deal insights justify it.
By streamlining these options, RevOps enables sales teams to fine-tune their forecasts while maintaining alignment with broader sales processes.
Conclusion
Revenue Operations plays a pivotal role in enterprise sales pipeline forecasting by establishing the framework, tools, and standards that sales teams need to create accurate and reliable forecasts. By setting clear rules for sales stages, providing standard probabilities, and allowing for flexibility in the forecasting process, RevOps supports sales in taking full ownership of the pipeline while ensuring the integrity of the data. Through close collaboration, both RevOps and sales can ensure that pipeline forecasts are both realistic and actionable.
Comments