{"id":1368,"date":"2021-10-08T20:42:00","date_gmt":"2023-09-04T20:42:27","guid":{"rendered":"https:\/\/www.salesforce.com\/?p=1368"},"modified":"2023-10-30T18:01:12","modified_gmt":"2023-10-30T18:01:12","slug":"sales-forecasting-techniques","status":"publish","type":"post","link":"https:\/\/www.salesforce.com\/eu\/blog\/sales-forecasting-techniques\/","title":{"rendered":"5 Sales Forecasting Techniques I Wish I Knew About Earlier in Career"},"content":{"rendered":"\n<p>A seasoned sales leader shares their proven experience with sales forecasting techniques that work.<\/p>\n\n\n\n<p>Sales forecasting is both an art and a science. In my 20+ years of sales leadership, I\u2019ve spent hundreds of hours thinking about sales forecasting techniques. These forecasts answer two simple questions: How much do we plan to sell? And when will we deliver those numbers? <\/p>\n\n\n\n<p>As hard as my team and I work on our forecasts, though, unpredictable events dramatically change them. Forecasting revenue has always been challenging, but the <a href=\"https:\/\/www.salesforce.com\/uk\/blog\/category\/leading-through-change.html\" target=\"_blank\" adhocenable=\"false\" rel=\"noopener\">global pandemic<\/a> made it even more difficult.<\/p>\n\n\n\n<p>Here, I\u2019m sharing five sales forecasting truths that I wish I\u2019d known sooner. I hope they help you approach your forecasting challenges in a more strategic way.<\/p>\n\n\n\n<p>To help you better sell from anywhere, our team has also created the <a href=\"https:\/\/www.salesforce.com\/resources\/articles\/building-a-sales-forecast-guide\/\" target=\"_blank\" adhocenable=\"false\" rel=\"noopener\">Complete Guide to Sales Forecasting<\/a> that goes beyond my quick tips here. It answers the most common questions I hear about sales forecasting from sales reps and leaders.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-1-your-forecast-can-change-in-a-flash\"><b>1. Your forecast can change in a flash<\/b><\/h2>\n\n\n\n<p>Extreme weather, economic crises, and global pandemics can dramatically change your forecast. At times, what you thought you knew about expected revenue growth can suddenly flip on its head.<\/p>\n\n\n\n<p>When that happens, it\u2019s okay to put the forecast aside. First and foremost, I tell my sales leaders and reps to focus on empathy and relationships. That goes for how we treat one another internally, as well as how we treat our customers. I\u2019ve learned that if you <a href=\"https:\/\/www.salesforce.com\/uk\/blog\/2020\/03\/remote-customer-relationship-management.html\" target=\"_blank\" adhocenable=\"false\" rel=\"noopener\">maintain customer relationships<\/a> now, those relationships will help you grow again when it\u2019s time.<\/p>\n\n\n\n<p>Though forecasting is tough in this environment, it\u2019s also important. The <a href=\"https:\/\/www.salesforce.com\/uk\/products\/sales-cloud\/features\/quota-forecasting-software\/\" target=\"_blank\" adhocenable=\"false\" rel=\"noopener\">forecast is a critical resource<\/a> to plan for the months and years ahead. As soon as an extraordinary event hits, sales and finance leaders at your company will quickly want to know: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>How\u2019s our pipeline looking today?<\/li>\n\n\n\n<li>What are the best- and worst-case scenarios?<\/li>\n\n\n\n<li>How has the forecast changed from a week or a month ago?<\/li>\n<\/ul>\n\n\n\n<p>You\u2019ll want to slice and dice this data by region, leader, rep, product, and more. To make this possible, reps need to double down on keeping all their data up to date. This is an easy task with tools like Sales Cloud\u2019s built-in <a href=\"https:\/\/www.salesforce.com\/uk\/products\/sales-cloud\/overview\/\" target=\"_blank\" adhocenable=\"false\" rel=\"noopener\">Pipeline Inspection<\/a>. On one screen, you can easily filter opportunities by team or time period and see the most recent activity. This helps your team know what\u2019s happening now, what\u2019s likely to happen next, and what data is missing.<\/p>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;69d2a9851b8a3&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"69d2a9851b8a3\" class=\"wp-block-image aligncenter is-resized wp-lightbox-container\"><img decoding=\"async\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.salesforce.com\/eu\/blog\/wp-content\/uploads\/sites\/14\/2023\/09\/sales-forecasting-techniques-body1.png?strip=all&#038;quality=95\" alt=\"\" style=\"aspect-ratio:1.8867924528301887;width:460px;height:auto\"\/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-2-sales-forecasting-should-be-based-on-five-simple-questions\"><b>2. Sales forecasting should be based on five simple questions<\/b><\/h2>\n\n\n\n<p>When I first started in sales, I knew I needed to factor variables into my forecasts. I also knew I needed to calculate how much and when. But I hadn\u2019t yet focused on five important areas: who, what, where, why, and how. These simple questions are what I now tell my teams to concentrate on when building their forecasts: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Who: Sales teams should make forecasts based on their prospects. Depending on whether the prospects are the decision-makers or just influencers, the forecast will be more or less exact.<\/li>\n\n\n\n<li>What: Forecasts should be based on exactly what solutions you plan to sell. Base them on problems your prospects have voiced, which your company can uniquely solve.<\/li>\n\n\n\n<li>Where: In what location is the prospect making their buying decision, and where will they use the actual products? Sales teams see better accuracy when they get closer (at least for a visit) to the centre of the action.<\/li>\n\n\n\n<li>Why: Why is the prospect or existing customer considering new services? Is there a big event making them consider it now? Without a forcing function, the deal may stall.<\/li>\n\n\n\n<li>How: How does this prospect make purchasing decisions? If you\u2019re not accounting for how they\u2019ve done it in the past, it may be fuzzy math. <\/li>\n<\/ul>\n\n\n\n<p>Some of these items are harder to read than others. But it\u2019s important to keep adjusting the data based on what\u2019s happening in the field. A high-pressure scenario is not the time to give up on your forecast.<\/p>\n\n\n\n<p>Some of these elements are plain facts, while others involve conjecture. The more you sell, the better you get at forecasts. That\u2019s why it\u2019s a balance of both art and science.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-3-negative-forecasting-can-highlight-business-risk\"><b>3. Negative forecasting can highlight business risk<\/b><\/h2>\n\n\n\n<p>You can also use your forecast to assess current risk to your business \u2013 also called <i>negative forecasting<\/i>. For example, one of our customers added a COVID-19 field in Sales Cloud to tag deals and see specifically how the pandemic is impacting them. The two key benefits they realized by doing this are: <\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The sales team can expedite deals involving a customer needing a product related to COVID-19. <\/li>\n\n\n\n<li>The company can track deals lost or pushed due to the crisis. <\/li>\n<\/ul>\n\n\n\n<p>By doing negative forecasting to gauge risk, your forecast evolves as your business does.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-4-everyone-in-the-company-needs-sales-forecasts-not-just-the-sales-team\"><b>4. Everyone in the company needs sales forecasts \u2013 not just the sales team<\/b><\/h2>\n\n\n\n<p>As I was starting out in sales, I knew I had to turn in accurate forecasts to make my sales leaders happy. Now that I\u2019ve grown in my career and seen different phases of growth come and go, I\u2019ve learned that every department relies on sales forecasts. There\u2019s truly not a part of the organization that goes unaffected when forecasts are off. <\/p>\n\n\n\n<p>For example, sales forecasts help the entire business plan to ship products, pay for marketing, and hire employees. With accurate forecasts, the company makes better investments, like hiring 20 new developers or opening a new sales office in a prime territory.<\/p>\n\n\n\n<p>But if forecasts are off, the company faces challenges across all business functions \u2013 from pricing to product delivery, to customer service. Everyone relies on the sales organization\u2019s ability to pull off an accurate forecast. So don\u2019t underestimate the <a href=\"https:\/\/www.salesforce.com\/uk\/blog\/2017\/01\/how-to-forecast-sales-accurately-every-time-smes-guide.html\" target=\"_blank\" rel=\"noopener\">importance of your forecast<\/a>. Even when things change rapidly, tweaking your guidance helps everyone make better decisions.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" id=\"h-5-today-s-technology-blows-old-school-forecasting-methods-out-of-the-water\"><b>5. Today\u2019s technology blows old-school forecasting methods out of the water<\/b><\/h2>\n\n\n\n<p>If only I had a glimpse at the technology I can access now back in my early sales days. Today, sales leaders operate in a ridiculously sophisticated, technology-driven environment. The old back-of-the-napkin tricks and predictions from the most confident sales rep can\u2019t hold a candle to today\u2019s sales forecasting tech.<\/p>\n\n\n\n<p>For example, in our own <a href=\"https:\/\/www.salesforce.com\/uk\/products\/sales-cloud\/overview\/\" target=\"_blank\" rel=\"noopener\">internal deployment of Sales Cloud<\/a>, we forecast revenue by:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Monitoring our entire business with a complete view of the total pipeline. <\/li>\n\n\n\n<li>Tracking our top performers. We look at which reps are on track to beat their targets with up-to-the-minute leaderboards.<\/li>\n\n\n\n<li>Forecasting for complex sales teams. Overlay Splits allow us to credit the right amounts to sales overlays by revenue, contract value, and more.<\/li>\n<\/ul>\n\n\n\n<p>We also use artificial intelligence (AI) to make our forecasts more accurate. In the early moments of an unpredictable scenario like the pandemic, AI isn\u2019t helpful for forecasting sales, as it\u2019s based on finding trends in past events. But scientists and developers are already finding brilliant ways to use AI to help people in the pandemic.<\/p>\n\n\n\n<p>For instance, Sales Cloud <a href=\"https:\/\/www.salesforce.com\/uk\/products\/einstein\/overview\/\" target=\"_blank\" rel=\"noopener\">Einstein Conversation Insights<\/a> can track mentions of pandemic-specific terms during sales calls, and then map out trends. This helps managers reconfigure sales strategies to deliver the right products in the right way to prospects and customers. As new developments surface, I\u2019m confident we\u2019ll start seeing AI helping sales teams in innovative ways.<\/p>\n\n\n\n<figure data-wp-context=\"{&quot;imageId&quot;:&quot;69d2a9851cf10&quot;}\" data-wp-interactive=\"core\/image\" data-wp-key=\"69d2a9851cf10\" class=\"wp-block-image aligncenter is-resized wp-lightbox-container\"><img decoding=\"async\" data-wp-class--hide=\"state.isContentHidden\" data-wp-class--show=\"state.isContentVisible\" data-wp-init=\"callbacks.setButtonStyles\" data-wp-on--click=\"actions.showLightbox\" data-wp-on--load=\"callbacks.setButtonStyles\" data-wp-on-window--resize=\"callbacks.setButtonStyles\" src=\"https:\/\/www.salesforce.com\/eu\/blog\/wp-content\/uploads\/sites\/14\/2023\/09\/sales-forecasting-techniques-body2.png?strip=all&#038;quality=95\" alt=\"\" style=\"aspect-ratio:1.8796992481203008;width:434px;height:auto\"\/><button\n\t\t\tclass=\"lightbox-trigger\"\n\t\t\ttype=\"button\"\n\t\t\taria-haspopup=\"dialog\"\n\t\t\taria-label=\"Enlarge\"\n\t\t\tdata-wp-init=\"callbacks.initTriggerButton\"\n\t\t\tdata-wp-on--click=\"actions.showLightbox\"\n\t\t\tdata-wp-style--right=\"state.imageButtonRight\"\n\t\t\tdata-wp-style--top=\"state.imageButtonTop\"\n\t\t>\n\t\t\t<svg xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"12\" height=\"12\" fill=\"none\" viewBox=\"0 0 12 12\">\n\t\t\t\t<path fill=\"#fff\" d=\"M2 0a2 2 0 0 0-2 2v2h1.5V2a.5.5 0 0 1 .5-.5h2V0H2Zm2 10.5H2a.5.5 0 0 1-.5-.5V8H0v2a2 2 0 0 0 2 2h2v-1.5ZM8 12v-1.5h2a.5.5 0 0 0 .5-.5V8H12v2a2 2 0 0 1-2 2H8Zm2-12a2 2 0 0 1 2 2v2h-1.5V2a.5.5 0 0 0-.5-.5H8V0h2Z\" \/>\n\t\t\t<\/svg>\n\t\t<\/button><\/figure>\n\n\n\n<p><\/p>\n\n\n\n<p>A good forecast, sales or otherwise, helps you make better decisions about the future. Should you prepare for a rainy day? Or will it be sunglasses, shorts, and smooth sailing? By becoming a forecasting pro, you\u2019ll be able to put resources and energy in the right places so you can continue to thrive.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>A seasoned sales leader shares their proven experience with sales forecasting techniques that work. Learn about these techniques here.<\/p>\n","protected":false},"author":1,"featured_media":1370,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"sf_justforyou_enable_alt":true,"optimizely_content_id":"c0af35e8d36e4c84afcd1bf618a3248f","post_meta_title":"","ai_synopsis":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"sf_topic":[277,4,108],"sf_content_type":[],"coauthors":[207],"class_list":["post-1368","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","sf_topic-sales-strategy","sf_topic-sales","sf_topic-sales-cloud"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v27.2 (Yoast SEO v27.2) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>5 Sales Forecasting Techniques I Wish I Knew About Earlier in Career - Salesforce<\/title>\n<meta name=\"description\" content=\"A seasoned sales leader shares their proven experience with sales forecasting techniques that work. Learn about these techniques here.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.salesforce.com\/eu\/blog\/sales-forecasting-techniques\/\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"5 Sales Forecasting Techniques I Wish I Knew About Earlier in Career\" \/>\n<meta property=\"og:description\" content=\"A seasoned sales leader shares their proven experience with sales forecasting techniques that work. 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