Sales teams live and breathe by numbers. Not just goals, but their forecasts, as well. Forecasts are crucial for the entire organization – planning and budgeting depend on accurate forecasting and if predictions are wildly off, the sales team is the first to take the blame. Since no one can ever predict the future with 100% accuracy, how can you create predictable revenue and sales forecasting that business leaders can depend on?
Use a Top-Tier CRM
Accurate forecasts depend on honest assessments from fallible human beings. Reps often forget to update data in a CRM, they may overinflate their pipeline or conversely, underestimate the strength of their pipeline. Getting accurate data can be a challenge, especially if salespeople work remotely or are on the road more than they are in the office.
Investing in a top-tier CRM that is user-friendly and mobile can vastly improve forecasting accuracy. It is also wise to create a forecasting dashboard in your CRM and run that report for weekly sales meetings. Salesforce is an excellent CRM for forecasting, as it is extremely user-friendly, cloud-based and even has a mobile application. When sales managers prioritize accurate data collection, sales reps will follow.
Know What You’re Tracking
You can’t make accurate forecasts if you aren’t tracking the right data. That data is typically directly tied into your sales cycle. When you know which prospects are in which stages of the process, you can better predict the probability of a close. Stages might include assessment stage, demo, quote, closed (lost), closed (won), etc.
Once you’ve defined your opportunity stages, use your CRM to gather historical data on conversion rates at each cycle to create more accurate forecasts.
Use the Right Forecasting Methods
There are a variety of forecasting methods you can lean on – and there are pros and cons to each. The methodology your organization chooses will depend on a variety of factors, including size of the company, autonomy of the sales team, the CRM and BI platform the company uses and even gut feelings.
Some of the most common methods are Opportunity Forecasting, Regression Analysis, Pipeline Intuition and Sales Cycle. You can learn more about these forecasting methodologies here to determine which might be the right methodology for your company.
Check in Regularly
Once you’ve determined the best methodology for comparing salespeople’s forecasts with historical performance, you can’t rest on your laurels. Forecasts must be continually revisited and updated for more accurate planning.
Include “forecast checkups” in your weekly meetings with reps. Pull your forecasting report, and then get updates on deals that are close to closing, those that should have closed but haven’t yet, and any status changes that should be noted.
These health checkups are usually best performed one on one, so reps don’t feel pressured to exaggerate or leave out pertinent information. Create a culture where honest feedback is valued and welcomed, because at the end of the day, your reps are your biggest source of data for forecasting.
Forecasting Activities Can Boost Revenue
One of the bonuses of prioritizing accurate forecasting is it naturally focuses reps on their pipelines and the revenue-generating activities that are most successful and least successful for them. If they see they are consistently losing prospects at a specific point in the process, they can work with managers to improve their efforts in that step, making them more effective and getting them closer to meeting and even exceeding their goals.
If you are looking for top-performing salespeople who can help your team create more accurate forecasts and predictable revenue, contact the expert sales recruiters at CSS ProSearch today.