We hit my key account forecast. Did we hit it for the reasons we thought?

We hit my key account forecast. Did we hit it for the reasons we thought?

A forecast is a theory about what will drive revenue, and each quarter tests it. A number can hit for reasons nobody planned, like a deal that came out of nowhere covering one that slipped. A key account manager (KAM) who reviews every hit and miss learns which assumptions to keep and which to fix.

Five questions to see if your team can do this job today:

1. Does your KAM write down the assumptions behind each forecast before the quarter starts?
2. After each quarter, does your team review why the forecast hit or missed?
3. Can your team name which assumptions proved wrong last quarter?
4. When you hit the number, do you check whether it came from the deals and reasons you expected?
5. Do the lessons from each review change how the next forecast is built?

Two or more no's, and a lucky quarter may look like a good forecast.

A few years ago, we forecast a customer to grow 15%. I'd worked with them for years and knew their growth drivers, their business cycles and the impact these had on our numbers.

That year, we hit 150% above forecast because the client did something unexpected that changed our pricing. Two things we hadn't planned for happened: the customer decided to take on new short-term projects they would have turned away before, and our local account manager significantly increased our pricing and margins on those projects. A few quarters later, that business was completely gone, our pricing was back to normal, and I had to recalibrate how we forecast a customer who had changed their business model in one quarter. From then on, this became part of our forecast process, and we made sure we understood their new business mix, including their short-term projects.

Being able to predict future outcomes can seem like guessing, and sometimes your best guess works. But the better approach is to follow the plan and keep iterating on the process when new data becomes available.

Our system, the Vitality Index, shows your key account teams where they stand today, the work it takes to level up, and how to do it, until they reach a vital partnership that lasts.

Which assumption in last quarter's forecast turned out to be wrong?

We built a free, 4-minute Key Account Risk Assessment. It gives you a risk score for your key accounts across team alignment, account planning, account transitions, and visibility. Link in the comments.