The organizations that want to start a new financial year while being “fully armed”, to make informed decisions and achieve expected sales targets need constant high-precision sales forecasts. Unfortunately, many companies lack even a periodic and scalable sales forecasting process. Let’s take a look at 5 simple strategies that CEOs can use to make their sales forecasts more accurate.
1. Make the best of forecasting software
Using sales forecasting software, companies can not only save time and resources but also boost the results, increasing the accuracy of their forecasts.
Typically, such tools offer templates that help sales leaders and reps to easily and quickly analyze the data they collect. Pay attention to such tools as Pipedrive, People.ai, Gong.io, Zoho CRM, Aviso Insights, InsightSquared — all these popular solutions enable teams to get a look at where their organization is and where they are heading to. But you should be aware that the functionality of each tool will vary based on how in-depth this solution is.
There is no “one-size-fits-all” software, but there are tools that meet the needs and priorities of almost any business when it comes to forecasting accuracy. One of such solutions is Revenue Grid, #1 AI-powered Guided Selling Platform.
One of its features allows you to build every revenue forecast based on real-time data and risk assessment. Using this Salesforce-native platform, you will be able to do the following:
- create forecasts based on complete sales data and insights that allow you to clearly understand what the future of your sales will look like;
- instantly see what amount of the committed forecast is at risk, figure out the reasons for that, find out how to mitigate it, and what actions you should perform right away;
- set up triggers to send alerts and notifications, sounding the alarm as soon as there are changes in any part of your forecast;
- check and compare previous and future periods, and investigate the changes. Consider the trends in your forecast changes and find out the reasons behind them.
2. Rely on historical data
To build realistic sales forecasts, forward-thinking sales leaders are implementing analytics and other tracking methods to obtain historical data. If you haven’t done this yet, then this is the best time for that!
Remember that previous period sales results may not always accurately predict your future results: currently, you may be hitting a new market, launching a brand-new product, struggling with new, strong competitors, etc.
However, historical data is a constant element of the formula for obtaining the most accurate forecasts (even adjusted for unpredictable factors).
3. Make sure your team members are keeping clean records
If your sales team members lack clear standards on which they can rely, they will have to decide for themselves what is right and what is wrong, the way they understand, and this also applies to data entry.
Inferences drawn from flawed data can quickly destroy your business. Therefore, make sure that you came to a common understanding with your team regarding the data entry.
There are several ways to do this:
- create standards for using CRM;
- refer to forecasts at every team meeting;
- check up on deals during one-on-one meetings with your reps;
- check records and transactions for inconsistencies.
4. Create a correct sales pipeline action plan
On the one hand, the quality of your leads is more important than their quantity. But on the other hand, the more leads you have, the more deals you can close!
Make a clear plan to generate maximum high-quality leads: for example, set a goal for your reps to attract twice as many quality leads in the next quarter. To do this, you not only need to motivate them and provide with resources but also delve into the current situation with attracting leads, for example:
- What helps drive leads through the sales process from initial inquiry to final close of the deal?
- How many stages does the sales process have, and how many (approximately) leads are converted at each stage?
- Who is the qualified lead: is this the customer that viewed the demo on the site, or the one that filled in the questionnaire, or someone else?
- Based on conversion rates, how many leads do you need to generate to achieve your expected sales?
5. Take market trends and competition into your consideration
There are a number of external variables related to a company’s positioning in the market and affecting your sales.
For example, there is a big difference between one product of yours, which has already won the trust and has a stable demand, and another, new and fashionable product that made a splash but has not yet received widespread adoption. They will have completely different growth trajectories, and you should consider these products as different segments.
Competition is another important thing to consider. Imagine if there is a company in the market that has the same strong credibility and a similar level of market awareness as yours. And suddenly, they decide to lower their prices… This will affect both the customers’ decisions and how the sales reps will conduct conversations with these customers.
Keeping track of what is going on in the market will help you create more accurate forecasts.