Nearly Half of UK Businesses Missed a 2022 Financial Target Amid Economic Uncertainty

• New survey results show that almost half of UK businesses missed an earnings target this year

• With an economic uncertain year approaching businesses, it’s more critical than ever that companies forecast accurately

• New research finds that 52% of business leaders feel they spend too much time on financial projections, while over two thirds use outdated and inefficient tools to build their forecasts 

As the economic downturn becomes more severe and a recession looms, inaccurate financial projections will put businesses at risk more than ever. A new survey conducted by Gong, the leading revenue intelligence platform, finds that 44% of UK businesses missed their earning targets at some point this year, with almost half (49%) confirming they missed their target in the first quarter of this year.

Accuracy amongst the backdrop of economic uncertainty is critical for business success, yet  when compiling sales forecasts, 14% of business leaders say their quarterly sales forecasts are inaccurate. This creates a worrying outlook potentially leading to serious consequences such as dampened trust among investors as well as disruption to operations and workforce.

Missing revenue targets because of inaccurate predictions might reflect a wider lack of trust among businesses towards financial forecasts. Indeed, making a financial prediction can not only be seen as daunting but also time-consuming and tedious given that over half (52%) of business leaders feel they spend too much time on forecasting. Furthermore, a whopping 92% of respondents feel like they’re spending enough or too much time on their forecasts.

Read More: SalesTechStar Interview with Matt Hugo, Head of Sales at ORO

Although most agree that forecasting takes up too much time, many business leaders still use outdated and inefficient tools such as spreadsheets to build the picture of their business health and pipeline. In fact, over two thirds (68%) of companies admit they build their forecasts in Excel.

Wendy Harris, Head of EMEA at Gong: “Accurate forecasting is difficult during healthy economic times, and it’s even more challenging when there’s a downturn and uncertainty. Whether it’s over or under estimating the revenue, the implications are serious. It can lead to cost-cutting in other departments, lay-offs and missed opportunities to accelerate growth. Having a clear vision of the financial future – delivered by accurate, reality-based data gathered from interactions with prospects directly – is vital for business leaders to weather the upcoming uncertain year.”  

Estimating revenue empowers business leaders not only to efficiently allocate resources and plan for development but also mitigate the risks of external factors such as supply chain disruption, political and social turmoil and economic uncertainty. Data from Gong’s ‘The Reality of Sales Forecasting’ shows that while 63% of sales executives believe that sales forecasting was essential to the success of their company, 53% said that making an accurate estimate was more important now because the economy is uncertain.

The study also discovered a link between the proportion of responders using real-time conversational data and better forecast accuracy. In fact, businesses are twice as likely to claim that their estimates are accurate to within 5% of the actual value when they use conversational data to assist with their forecasting.

Read More: Doing More With Less: Organic Ways to Grow Your B2B Sales Funnel

Methodology 

Gong commissioned Censuswide to survey 500 senior decision makers across the UK, from companies of any size. The research was conducted 1st December to 2nd December 2022. The survey was conducted online. 

Gong surveyed 928 sales professionals across the globe online who either own, manage, or participate in their organization’s forecasting process to better understand the current state of forecasting challenges, operations, and confidences in June 2022. The results are presented in a report titled, ‘The Reality of Sales Forecasting’. 

Gong unlocks reality to help people and companies reach their full potential. The Reality Platform™ autonomously empowers customer-facing teams to take advantage of their most valuable assets – customer interactions, which the Gong platform captures and analyzes. Gong then delivers insights at scale, enabling revenue and go-to-market teams to determine the best actions for repeatable winning outcomes. More than 3,500 innovative companies like Morningstar Inc., Paychex, LinkedIn, Shopify, Slack, Sprout Social, Twilio, and Zillow trust Gong to power their business reality.