3 Tips for Better Forecasting

Sales forecasting is critical to a sales management strategy, but it can be quite a headache for most sales managers. Forecasts give managers an idea of where their business is headed, and the data produced in forecasts helps management determine everything from budgets to bonuses. But, oftentimes, forecasts can be inaccurate for any number of reasons. Here are a few tips for better forecasting.

Forecast on a Schedule

Forecasting won’t be much good if you aren’t doing it on a regular basis. Set aside a specific time each month, week or quarter to review the forecasts. Have everybody involved sit in for the review, go through the data, make the decisions and make changes, if necessary. When there is a specific time for forecasting and review, everyone involved will be present, and you can compare and plan for actual results.

Sort Your Pipeline by Close Probability

Sure, we all need to know what’s going on in the sales pipeline, but you need to do more than just skim the surface. Knowing how many new opportunities have been created is just the start. You need to know what kind of value each of those opportunities can bring in, how that value will impact sales month-on-month and how soon those leads will convert. You need to keep later-stage pipeline opportunities separate from early-stage pipeline opportunities, which are likely to be tallied in the next quarter.

Rely On More Than One Set Of Numbers

Like we’ve discussed before, revenue can’t be the only benchmark to measure and predict sales. You will need to look into more than one metric and more than one set of number to create a good forecast. Look at forecasts by number, product, revenue, sales rep, region time period, etc.; looking at different numbers helps each department plan better and also gives you a more cohesive picture of your business. When forecasts are created and viewed from all perspectives, management will have the confidence and insight to make tough decisions.

It also helps to create forecasts based on the sales activity. Look closely at what your sales reps are doing and how. You may be able to identify patterns that lead to a sale being closed or certain campaigns or tactics that bring in more sales. If you can identify winning patterns and re-apply them, forecasting gets easier.

Salesvue is an app for Salesforce which helps you measure and record sales activity as it happens. Salesvue uses the data available in the Salesforce CRM to give you real-time conversion patterns, including how many calls it takes to get an appointment and how many appointments lead up to a sale. Forecasting is more accurate when when you know how many activities convert to conversations, opportunities and ultimately sales.