Key Points:
• Building a revenue forecast should be simple, but CFOs know it usually isn’t.
• Why is there so much guesswork? Key information is missing.
• Today’s buyers operate in ‘stealth mode.’
• Modest technology investments make all the difference.
Building a revenue forecast should be simple — but CFOs know it usually isn’t.
For Chief Financial Officers, getting answers from your revenue team to questions like…
- The number of opportunities in the pipeline
- The likelihood of those deals closing, when, and
- For how much
… is table stakes stuff. But the chronic problem that undermines most of your efforts is that these projections are often based on guesswork instead of actual data.
In this blog, we’ll explore key barriers to accurate financial forecasts — and what you can do as a CFO to accomplish the accurate forecasting you’ve been wishing you could get for years.
Why So Much Guesswork? Key Information is Missing
Your marketing team cannot spot — and may not even understand — market conditions that can impact lead flow. And while they know the percentage of leads that typically turn into opportunities, they often can’t anticipate how quickly those conversion rates can fluctuate based on ever-changing buyer behaviors.
Sales has similar challenges: Stakeholders can tell you the number of opportunities in the pipeline, but often struggle to predict which deals will close, when, and for how much.
It seems like nobody really has the answers … yet as a CFO, you still have to know your near-term revenue potential.
What we’ve found when examining customer pipeline reports is that out of all accounts that match ideal buyer profiles, only 10% were actively researching solutions. Recognizing this 10% of potential customers — and when they are likely to buy — is critical for CFOs because it determines near-term revenue potential.
But how can you and your company determine this kind of differentiating engagement with any level of confidence? If you haven’t found a solid way to do this yet, you aren’t the only one.
Today’s Buyers Operate in ‘Stealth Mode’
Sales and marketing teams have a lot less control of the buyer’s narrative than a CFO might expect. Today’s buyers spend nearly 70% of their B2B buying journey conducting research online by themselves, anonymously, without a consultative salesperson. They spend months consuming content on third-party review sites, trade publications, social networks, and message boards.
This activity unfolds in what we call The Dark Funnel™, which isn’t trackable by most revenue teams. This means a large majority of the buying journey is invisible.
Here’s how this affects CFOs: Since revenue team members never fully control the story or understand the prospect’s needs, they’re never fully sure how many prospects and customers are seeking a solution. That means you, the CFO, are never fully sure how many of the prospects in the pipeline represent a real revenue opportunity.
The Challenge of the Dark Funnel
When B2B buyers conduct vendor research within the Dark Funnel, their activity isn’t completely anonymized. Like nearly all online users, they leave a kind of “virtual breadcrumb trail” of intent signals as they traverse the internet. These virtual breadcrumbs hint at:
- What business problems they aim to solve
- What kind of solution might meet their needs
- When they’re going to make a buying decision
This intent data can be revelatory to B2B revenue teams. But other than first-party intent data such as form fills or demo requests that only three percent of buyers fill out, these highly valuable signals are invisible and untraceable. This keeps marketers and sellers from knowing that these actively interested prospects exist, or that they may be ready to buy.
This dramatically influences a revenue team’s perception of the market … and impacts pipeline and revenue projections.
So where are the real answers? The good news is that there’s a way to enable your teams to provide useful, actionable data that can measure the market and guide your efforts: AI-driven sales and marketing technologies. We’ll explore why AI-powered tools can be a game changer in the rest of this blog.
Modest Technology Investments Make All the Difference
Some technology solutions are purpose-built for B2B sales enablement. These platforms integrate with your existing data sources, add third-party insights into the behavior data of B2B buyers, and then use artificial intelligence and machine learning to:
- Spot these potential buyers’ activity
- De-anonymize their research and acquire contact information
- Understand when they’re approaching a purchase decision
This intelligence — which you can access directly within these platforms, complete with continually updated predicted pipeline value — empowers revenue teams to expand their revenue forecast window and accurately spot demand trends long before they otherwise could.
Why Artificial Intelligence Matters
Data is useless unless you can analyze it and use it to guide action. AI uses algorithms and machine learning to analyze massive data sets and spot patterns in ways humans never could. The best AI-powered revenue growth platforms can enable your company’s revenue team to tell you:
- How many buyers are currently in the marketplace
- How deep they are in their buying process
- How much they are likely to spend on a solution
- And the impact of your team’s efforts to reach and influence them toward a buying decision
By understanding this data, your team can more accurately forecast months, or even full quarters, in advance.
Out With Guesswork, In With Real Data — and Stronger ROI
When you are so often forced to make decisions based on the hunches and guesswork provided by stakeholders in other departments, it’s impossible for your forecasts to be anything more than guesses themselves. The key to eliminating these guessing games is for CFOs (and their companies’ revenue teams) to have access to unbiased, real-time data that tracks and predicts pipeline opportunities.
With these faster, more accurate revenue forecasts, CFOs can confidently design business plans that maintain healthy profitability while maximizing growth.
