A good feeling about a rep’s pipeline won’t pay the invoices

It is Monday morning, the weekly sales meeting has started and the pipeline is up on the screen.

“Where are we on that big deal?”

“Good. They liked the demo, they have the proposal and they said they want to move it forward internally. I would put it at eighty percent.”

“So we can count on it this quarter?”

“Yes, I think so.”

Six weeks later the deal is still open. The client has gone quiet, the decision has moved to next month, and those eighty percent are now zero revenue in the current quarter.

Nobody necessarily lied. The rep really may have felt good about it. The client really may have reacted positively. And the proposal may have been very strong.

The problem sits elsewhere: a good feeling is not a forecast.

A sales forecast should not answer the question “which deals look promising?” It should answer something far more practical: based on what we know today, how much revenue do we genuinely expect to close in this period? Those are two completely different things.

Pipeline, forecast and target are not the same number

Start by separating three numbers that sales teams routinely throw into one bucket.

Pipeline says how much potential business is in play. Forecast says how much of it we realistically expect to close in a given period. Target says how much we need to close.

Take a company with a quarterly target of €12M. Its CRM may show open opportunities worth €30M. That sounds excellent. Except €30M in pipeline says nothing at all about whether the company will book €12M in revenue.

If a genuine deal-by-deal review puts the realistic forecast at, say, €8.6M, the situation is very simple:

That €3.4M is the gap. Working with that difference is one of the main points of forecasting. So that six or eight weeks out you know how much is missing and where you might find it.

Before a deal enters the forecast, look for two things

Not every deal sitting in the CRM automatically belongs in the forecast. Two simple questions make a good first filter:

1. Is there a real business initiative on the customer side?
2. Is there a real reason the decision has to happen in this particular period?

Both matter.

1. The customer needs a reason to change something

“They are not thrilled with their current system” is not an initiative. “They want a new system” may not be one either.

A stronger situation looks like this: the company wants to enter the German market next year and its current CRM cannot support the new sales process. Or: the company needs to cut churn below 8 % by year end and the way it works with customer data is in the way.

Those are initiatives tied to a specific business outcome. And more importantly, somebody inside the company usually owns them. Without a real priority on the customer side it is very easy to mistake interest for intent to buy.

2. The customer needs a timing reason of their own

The deadline matters just as much. The deadline has to exist on the customer side. For example:

• the contract with the incumbent vendor expires in November,
• a new market launches in January,
• the new system has to be ready before the season,
• the board decides on budget on 15 October,
• implementation has to finish before another system is migrated.

And an even better question: what happens if it does not make that date? If the answer is “nothing really”, the date is probably not a deadline.

A deal without a business initiative or without a real deadline can still be an interesting opportunity. It can belong in the pipeline. But it is dangerous to count it as money arriving this quarter.

Forget “70% probability”. Ask about risk

The other problem with classic forecasting is percentages. A deal is at 30 %. Then 50 %. After the proposal, 70 %. After one positive call, 80 %.

What does 80 % actually mean? That eight out of ten comparable deals end in signature? Or that the rep feels better than they did last week? On its own, a percentage says nothing about what is stopping the deal from closing.

Working with risk is far more useful. For every deal, ask: what is the single biggest obstacle today, and what happens if we cannot remove it? The answer puts the deal into one of four categories.

Commit

A clear initiative, a deadline, a known decision process and effectively no unresolved risk. Typically only the last formal steps remain. This deal counts in the forecast.

Win

Risk is still there, but you know exactly what it is and you have a realistic plan to handle it. For example you need CFO sign-off and the meeting is booked for next Tuesday. This category enters the forecast too.

Push

The deal is real, but if the current obstacle is not resolved the likely outcome is not a loss, the deal simply slides into the next period. For example the customer wants the solution but will not get budget approved internally this quarter. It does not count in the current quarter forecast.

Lose

If the current obstacle is not resolved you will probably lose the deal outright. It may be a competitor, a missing decision maker, unproven value or a fundamental pricing problem. This one does not belong in the forecast either, at least not yet.

The point of these categories is not to rename columns in the CRM. The point is to make the team talk about reality. Instead of “I would put it at 80 %” you suddenly hear:

“The CFO has not seen the business case yet. If we do not win them over by 10 October, the project moves to the next budget cycle. That is why it is a Push today.”

Now you have something to work with.

So what is a forecast actually made of?

Here is one of the most common mistakes. A forecast is not simply the sum of all open deals. In this model it is not even only the sum of deals that look good today. It has three parts:

Forecast = Commit + Win + business that will be created and closed inside the quarter

You know the first two. Commit holds deals with minimal risk, say €5.2M. Win holds deals where risk exists but you have a concrete way through it, say €2.3M. That gets you to €7.5M. And that is not where it ends.

The deals that are not even in the pipeline yet

This is the part people forget. In plenty of companies every quarter produces new opportunities that also close inside that same quarter. Say you look at the last four quarters:

Historically the company creates and closes roughly €1.1M of new business inside a quarter that was not in the pipeline when the period started. If that pattern holds over time, it is legitimate to forecast with it. Which gives you:

Suddenly “a forecast has three parts” stops being an abstract rule. They are simply three different sources of expected revenue.

In companies with a small number of very large, irregular deals the historical average needs care. One exceptional deal can distort it badly. In that case it makes sense to watch the median and the spread between quarters alongside the average.

I keep this whole calculation in a spreadsheet you can download for free. Drop your deals in, it totals the forecast and shows you exactly how far short of target you are.

You have a forecast. Now the harder question: is it enough?

Back to the example. The quarterly target is €12M, the realistic forecast €8.6M, so the difference is €3.4M. That number should change the character of the entire sales meeting.

You are no longer asking: “do you think we will make the quarter?” Nobody can answer that with anything but an opinion. Instead you are working on: “we are €3.4M short against target today. Where do we get it?” That question can be turned into a concrete plan.

Where to look for the missing €3.4M

The gap is not another line you simply add to the forecast. It is an amount you do not yet have enough evidence for. The job is to find deals or activities that can move that €3.4M into Win or Commit over time. Ideally you work from the nearest and cheapest opportunities toward the hardest ones.

1. Look at your Push and Lose deals

Start with what you already have. If you have a million-euro deal sitting in Push purely because you cannot get to the CFO, generating another hundred leads is probably not the answer. You may need to get the CEO on a call, build a better business case or change how you are communicating. The question is: what specifically would have to happen for this deal to move back into Win?

2. Go through the early-stage deals in your current pipeline

The second reservoir is deals that already exist but do not yet meet the bar for the forecast. Maybe you do not know their real deadline. Maybe you have identified a problem but not its business impact. Maybe you are talking to someone who likes the solution but you do not know the company's actual priority. The goal is not to optimistically promote these deals. The goal is to go and find the missing information.

3. Look into next quarter

Some deals are scheduled for later, but their real situation would allow an earlier close. This is not about pushing the customer artificially. It is about the case where budget, business case and decision process already exist and the later date in the CRM is more the rep's internal estimate than a client requirement. Then it is worth finding out whether there is a legitimate route to moving faster.

4. Increase what you can create and close inside this quarter

This is where historical create-and-close earns its place. If you know a particular offer has a short sales cycle, it can be a very efficient way to cover part of the gap. A smaller audit, a workshop, a pilot, a licence or a standardised service package moves at a completely different speed than a large transformation programme.

5. And only then do you need significantly more new pipeline

Outbound, cold calling, LinkedIn, new campaigns, events and other acquisition work all function, of course. They just tend to be the most expensive and slowest route. If a company already has ten live deals, it usually makes sense to first find out whether some of them can genuinely be landed. Only then work out how many brand new opportunities you need to create.

A good forecast meeting does not look like reading the CRM aloud

The point of a regular forecast meeting is not to walk line by line through every open opportunity. And certainly not to hear “it looks good” ten times in a row.

For every significant deal it should be possible to answer a few simple questions:

• What business initiative is the customer working on?
• Why do they have to solve it now?
• What is the real deadline on their side?
• What is the biggest risk today?
• If we do not resolve it, is the outcome a slip or a loss?
• What specific step removes that risk?
• Who does it and by when?

At that point the forecast meeting stops being a debate about feelings. It becomes a working session about what the team has to do to change the likely outcome of the quarter.

A worse forecast can be a sign of better management

When you introduce this way of forecasting for the first time, something uncomfortable tends to happen. Your number will probably drop. A pipeline that looked like €14M yesterday may produce a forecast of €8.6M after a proper review.

That does not mean you lost €5.4M overnight. In all likelihood that money was not there yesterday either. You have simply stopped mistaking it for certainty.

And that is exactly where the value of a good forecast sits. It is not there to reassure management. It is there to show them reality early enough that something can still be done about it.

Frequently asked questions

Inspiration & sources: the risk category framework and the gap-closing sequence draw on the work of Mark Kosoglow, CRO at Outreach · the rest comes from what has worked for us across 750+ projects · and from meetings where I asked the wrong question myself.

Want to put this rhythm in place and not sure where to start? Get in touch. We will go through your pipeline and tell you what has no business being in the forecast.