Every quarter the same conversation happens in boardrooms. The number was committed, the team was confident, and the quarter landed short. Then the next forecast arrives with the same confidence. Investors stop believing it, and the sales leader starts to carry the blame for a problem that is usually built into the system.

How common is a bad forecast?

Very common. Only 45% of sales leaders and sellers have high confidence in their organisation’s forecasting accuracy.[1] In a Forrester study of more than 300 revenue leaders, just 18% said their quarterly forecasts land within 5% of actual revenue, and 59% are off by 10% or more.[2]

Where forecast deals actually go

A study of nearly 900 sales organisations tracked what happens to deals once they are in the forecast:[3]

  • 47.3% are won
  • 32.0% are lost
  • 20.7% stall indefinitely with no decision

So on a £10m forecast, about £4.7m closes and around £2m simply stops moving. Much of the loss is not to competitors either. Research on 2.5 million recorded sales conversations attributes 40% to 60% of lost deals to customer indecision.[4] You can run your own numbers in the free Leak Finder.

Why forecasts miss

  • Stages describe what the seller did, not what the buyer did. “Proposal sent” says nothing about whether the buyer has a budget, a decision maker and a date.
  • No exit criteria. Without clear evidence required to move a deal forward, every rep defines the stages differently.
  • Stalled deals never leave. Old opportunities sit in the pipeline for months, inflating coverage and confidence.
  • The forecast is negotiated, not inspected. Numbers are rolled up and adjusted in meetings rather than tested deal by deal.
  • Nobody measures accuracy. If last quarter’s forecast is never compared with the result, the same habits repeat.

Five fixes that make a forecast reliable

  1. Define stages by buyer actions. A deal moves forward when the buyer does something verifiable, such as confirming budget or introducing the decision maker.
  2. Separate commit from best case. Commit means evidence, not optimism. Keep upside visible but out of the number.
  3. Inspect deals, not totals. In pipeline reviews, ask what the buyer has done in the last two weeks and what happens next, with a date.
  4. Flag stalled deals automatically. Set a maximum number of days in each stage. Anything past it is reviewed or removed.
  5. Score your accuracy every period. Compare forecast with actual, by rep and by stage, and share it. Accuracy improves fastest when it is measured.

Questions we are asked

How accurate are most sales forecasts?

Not very. Gartner found only 45% of sales leaders and sellers have high confidence in their forecasting accuracy, and a Forrester study found just 18% of quarterly forecasts land within 5% of actual revenue.

What percentage of forecast deals close?

CSO Insights research across nearly 900 sales organisations found 47.3% of forecast deals are won, 32.0% are lost and 20.7% stall indefinitely with no decision.

How do you make a sales forecast more accurate?

Define pipeline stages by verifiable buyer actions, separate commit from best case, inspect individual deals rather than totals, remove stalled deals using time limits in each stage, and measure forecast accuracy every period.

Sources

  1. Gartner press release, Gartner Says Less Than 50% of Sales Leaders and Sellers Have High Confidence in Forecasting Accuracy, 12 February 2020
  2. Clari, reporting a Forrester Consulting study of 300+ revenue leaders, 25 October 2021
  3. CSO Insights, Selling in the Age of Ceaseless Change: 2018 to 2019 Sales Performance Study, summary
  4. Challenger Inc, Dixon and McKenna, The JOLT Effect research on customer indecision