Hedging…Its Not Just for Wall Street

It is not exactly hedging but adjusting your revenue based on past rep performance is a way to ensure you are not over or under stating your revenue targets too much. How this works is simple. You assign each rep a weight factor based on how they have forecasted in the past. Do they have a tendency to overstate and under deliver or understate and over deliver? Each rep likes to handle how they report their deals differently. So for example, a rep that usually is under their revenue forecast by 10% you would assign a factor of 90%. If a rep consistently is over their forecasted revenue you can assign 105% factor.

When running forecast reports you will want to see two columns for revenue. One is the stated forecast on the opportunity and the other column will show the adjusted based on the factor of the rep. To get the adjusted revenue numbers just multiply the revenue of the deal by the rep factor. This is easily done automatically for you when creating or updating your opportunity. It should be carried as an additional field on the opportunity for easy reporting. For companies that use sales forecasts for any type of capacity planning this will help get it much closer.

Remember the past is a window to the future. Always try to leverage the past to better predict your future business.

Rep Factor is part of their profile

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How it shows on the opportunity

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How it shows on forecast reports

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Tags: CRM Basics, crm productivity