How To Interpret the Clari Projection

At Clari, we strive to accurately project your final number from the very first day of the quarter. We take pride in our Artificial Intelligence and our accuracy, but each business has its own unique challenges, whether they be data hygiene issues or process changes.

Our AI engine automatically course corrects, identifies process changes, and accounts for data hygiene issues. But sometimes, the projection will not match your expectations or intuition. In those situations, it’s important to understand how to best interpret the projection and how to use it as a triangulation point.
 

 

As explained above, the projection indicates how much you are likely to close given four factors:

1. The amount that you currently have in pipeline and the state of those deals (eg. Commit, Best Case etc.).
2. The amount of time left in the period and how well the team usually performs with that amount of time.
3. How much you’ve already closed.
4. The expected number of new deals or pulled in deals.

If the projection is lower than what you’re expecting, it’s likely due to one or several of these reasons:

1. You haven’t closed as much in the current quarter as you typically have in the past.
2. You have less pipeline or a sub-optimal mix given how much your team typically closes with that amount of time left in the quarter. For example, you might think that your team closes about 70% of deals that are in Stage 6 by day 60 of the quarter, but the reality might be that over the past year, your team has only closed around 55% of those deals.
3. You’re expecting to pull in or create more deals than Clari is projecting.

 

In any of the cases above, we recommend using Trend to investigate the current state of the pipeline and how many deals typically get pulled in or created between this time of the quarter and the end of the quarter. You may find that Clari is projecting too few new deals to come in, or a lower conversion rate than you’re expecting for deals in a certain forecast or stage. At the same time, you may have some information about your business which leads you to believe that your team will close more or less than is being projected.

For example, you may know that your process has changed, and deals can now only be committed if they meet a certain set of strict criteria. In that case, you might find that the number of deals that you have in Commit is lower than you typically have by this time in the quarter, but the conversion rate can be expected to be higher, which would obviously affect your forecast, and might not be reflected in the Clari projection yet.

The Clari projection is a yardstick which can be used to gauge where you’ll land based on the current state of your pipeline and how you’ve historically performed. With the right understanding, the projection can be used as a way to pressure-test your assumptions and the team’s forecast call and give you greater confidence in how your quarter will likely end.

 

FAQs

 

Why aren't individual projections rolling up to my team projection?

You may notice that all the AI Projection for individual team members do not necessarily add up to the AI Projection for the overall team. This is because conversion rations at the individual rep level may be different than conversion ratios at the team level. 
 

Let's take a simple example. Let's assume that there are no new deals and only one forecast category. The team only has two reps, Rep A and Rep B.
 

As you can see in this example, even thought the dollar amounts add up, the conversion rates from the rep level don't translate up to the territory level. The average of the conversion rates from the reps for Q1 is 61% , but the actual conversion rate was 30%.

For each level in the hierarchy, Clari provides the best projection for that specific individual or region within a certain range of confidence. When you go up a level in the hierarchy, Clari reevaluates the projection given the aggregate information, which offers more accurate numbers. In other words, the higher up you go in the hierarchy, the more confident Clari's projection is.
 

Further Learning

To learn more about how the AI Projection is calculated, check out our article on How the Clari Projection Works. Want to better understand where the projection is coming from? Read this article on How to Interpret the Clari Projection.