On forecasting and inspecting big deals ($$$)

Ask the right questions to gain conviction and certainty on the forecast of big deals

Have you recently encountered a situation where a big deal slipped, resulting in a significant forecast miss? You’re not alone, I’ve heard this story a few times recently. It’s both funny and intriguing how, despite discussing these big deals in forecasts and meticulously tracking them, they still manage to surprise the business at the end of a reporting period. Why does that happen?

The reality is that it is very hard to quantify and gauge the proximity of big deals closing. Asking the straightforward question of the likelihood or probability of a deal closing is too easy a way out. It fails to help uncover true proximity - especially because it focuses on past milestones not future milestones. This gap in understanding is then further masked through the forecasting process, which aggregates and condenses information. The end result is that forecast will have a ton of hidden volatility built in.

I have had the fortunate experience of working with great sales leaders that knew both a) when forecast depended on big deals and b) how to manage big deals. What stood out to me was their ability to ask the right questions to inspect a deal and quantify true proximity and the impact to forecast. This post will highlight some of these insightful questions; which I think anyone can ask. From sales to finance to operations and anyone else who cares that this deal closes!

It is worth noting that various sales methodologies, like MEDDIC or BANT, can help with deal inspection. Many of the below questions will also slot into these frameworks. However, the primary focus in this post is on the questions that I have found most useful in the context of forecasting and quantifying proximity of closing a deal.

Deal assessment questions

Deal assessment questions are about understanding the closing strategy; mitigating risks and enhancing success factors.

• Are there mutually aligned next steps and dates? This is pivotal. Too many times I have seen closing dates remain an arbitrary date that was selected when the opportunity was first created. If next steps and dates are also not clear and mutually aligned, there is probably much more discovery yet to be done.

• Who have you not talked to? I’ve seen an overlooked or stakeholder jeopardize a deal last minute. So who still needs to be talked to? Who else do we need to talk to in the decision chain?

• How do we de-risk the deal? Did we identify the blockers for this deal? What are they? Focusing on blockers and risks lays out what needs to still be solved.

• How do we increase likelihood of the deal closing? Sometimes there aren’t clear blockers but things can still be done to enhance likelihood.

• Should we be doing this deal now? One of the best questions I have heard. It helps assess if a deal should be happening. Especially if there is a ton of pressure, this question can give relief and provide an alternative path that may be more realistic and likely.

• What does this deal currently depend on?

Business case inspection

Establish and continuously re-establish the client’s need and make sure you address with value.

• What is the problem we are solving for the customer? Separates smoke from fire. What value are we delivering? Do we know why the customer is even interested?

• What can we do better about the business case or delivering more value? This can help surface uncertainty where a customer may be unsure about whether they are going to buy something by a given date.

• Is it this most important problem right now? Question of priority. Closing a deal is your priority. Is buying the customers priority? Are we on top of their priority list?

• Are there competing priorities and how are they affecting timeline to close? Important to check in on priorities over time. Things change quickly and what may have been important 2 weeks ago, could have changed. Revalidating this is critical.

Sequence of events or process questions

The next questions focus on where exactly you are in the final stages of the sales process. Everything is post-demo at some point and that is not sufficient to know. Where is a deal really?

• Is executive involvement needed? Assess whether the deal requires engagement from senior executives on your team or the prospect's side.

• Have we presented a proposal? Ensure that a formal proposal has been presented, outlining the terms and expectations of the deal as well as the path to get there.

• Who will sign the deal? Identify the individual or individuals responsible for signing the contract. When will they sign?

• What is the procurement process? Gain clarity on the steps involved in the procurement process, including any documentation or approvals required. Many times also, the buyer may not know their own procurement process. So, does the customer know their own procurement process? If not, help them help you.

• Is there a data, legal or security review needed? Determine if additional reviews are necessary, especially for SaaS solutions that handle sensitive data.

• What does the budget approval process look like? Is the CFO required? Understand the financial decision-making process within the prospect's organization and whether CFO approval is necessary.

• Again, is there a mutually agreed-upon close date? Ensure that both parties have mutual clarity on the path to close.

• Are commercial terms defined? This includes things like the contract value, payment terms, billing, PO numbers and more. Work with sample contracts to gain that understanding. This avoids last minute contract issues and may even help uncover additional roadblocks that need to be solved ahead of signature.

Hopefully this compilation of questions is a useful resource to leverage when you have big deals impacting your forecast. In those situations, it is important to step away from the high-level forecasting metrics and get close to the deal. The substantial size of the big deals warrant the additional time investment to understand them more closely. Only then will you gain clarity and conviction on the forecast, big deal included.

Do you have any great questions to add to the list? If so:

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