{"id":2014,"date":"2014-08-19T20:53:00","date_gmt":"2023-09-04T20:53:21","guid":{"rendered":"https:\/\/www.salesforce.com\/?p=2014"},"modified":"2023-11-06T16:03:26","modified_gmt":"2023-11-06T16:03:26","slug":"7-mistakes-in-sales-forecasting","status":"publish","type":"post","link":"https:\/\/www.salesforce.com\/eu\/blog\/7-mistakes-in-sales-forecasting\/","title":{"rendered":"7 of the Most Common Mistakes in Sales Forecasting"},"content":{"rendered":"\n

The sales forecast is probably the single most important indicator of business performance.<\/a><\/p>\n\n\n\n

An accurate sales forecast<\/a> lets you anticipate changes in revenue flow; helps keep costs in line with income; and, most importantly, highlights the things that demand action: everything from new opportunities to imminent deals and lurking issues.<\/p>\n\n\n\n

But while salespeople put an enormous amount of time into sales forecasting, most are still using some variation of the \u2018finger-in-the-wind\u2019 approach: according to Dealmaker 365<\/a>, some 58% of companies report that fewer than 75% of sales close as forecast. That\u2019s a big variance.<\/p>\n\n\n\n

There are a lot of reasons that make forecasts fail to reflect reality. Our recent eBook on the subject, Sales Forecasting Comes of Age<\/a>, talks all about best-practice forecasting \u2013 but we wanted to share here some of the most common mistakes we\u2019ve come across.<\/p>\n\n\n\n

Mistake #1: Letting hunches distort the truth<\/span><\/h4>\n\n\n\n

Your feelings about the way sales are going are not necessarily the best indicator of what\u2019s to come. Feelings \u2013 positive or negative \u2013 really just add up to guesswork rather than measurable data. When sales forecasts are based on hunches, opportunities are far less likely to close as predicted. Of course, no forecast is 100 % accurate, but a prediction based on data and actual behaviours will always outperform one based on emotional temperature. <\/p>\n\n\n\n

Mistake #2: Ignoring history <\/h4>\n\n\n\n

Unless your business is completely new or you\u2019ve just introduced a radically different product, your past performance is often the best indicator predictor of the future. You have valuable data from past years\u2019 sales performance to help with your forecast: data about the time it takes to make a sale, or about conversion rates in your business. These are powerful indicators of what you can expect in a comparable forecast period.<\/p>\n\n\n\n

If your forecast diverges wildly from your history, there needs to be a reason for it. Something significant has to have changed. Otherwise, history is too important a data source to ignore.<\/p>\n\n\n\n

Mistake #3: Failing to define your buying stages<\/h4>\n\n\n\n

Buyers go through distinct stages as they move towards a purchase. It\u2019s important to define these stages clearly and to identify the behaviours that signal a transition from one stage to the next (e.g. taking a demo or getting a sales visit).<\/p>\n\n\n\n

If you fail to define the milestones of the purchase journey, your salespeople won\u2019t be speaking the same language. And that inevitably distorts your forecast.<\/p>\n\n\n\n

Mistake #4. Living in spreadsheets<\/h4>\n\n\n\n

Inside every company that struggles with forecasting are desks and meeting tables covered in spreadsheets.<\/p>\n\n\n\n

By their nature, spreadsheets will only ever reflect a snapshot in time \u2013 so by the time you consult them for your forecast, they\u2019re out of date. And spreadsheets tend to proliferate, generating many versions of the truth, with different people working from different numbers.<\/p>\n\n\n\n

In short, spreadsheets devour time, inhibit collaboration and often create fog instead of clarity. They keep your salespeople from doing what they do best and waste their time filling cells and tweaking formulas. Give your sales team back that time and they can spend in generating new leads<\/a> or closing more deals.<\/p>\n\n\n\n

Mistake #5: Failing to adapt-as-you-go<\/h4>\n\n\n\n

Whether you forecast annually, quarterly, or monthly, traditional forecasts are almost always out of date. A month-old static snapshot ignores changing circumstances or new information that could affect the forecast. Ideally, your forecast tool should be a real-time collaborative platform<\/a> that shows the vital signs of your business: continually registering changes and adapting your forecast. So whenever you choose to hold a forecast meeting, you can tap into real-time information.<\/p>\n\n\n\n

Mistake #6: Being stricken by data paralysis<\/h4>\n\n\n\n

Let\u2019s be honest: if you\u2019re using complicated data sources and manual processes to align out-of-date information and disjointed spreadsheets, not only will your forecasts be inaccurate, but they\u2019ll also become a terrible chore. And even if all the relevant data is there (somewhere), it will take a seriously well-trained eye to spot any issues that need flagging. Professional forecasting tools can help you make data more accessible and visual so the real story jumps out.<\/p>\n\n\n\n

Mistake #7: Failing to align on key metrics<\/h4>\n\n\n\n

Unless the whole sales team and senior management buy into the same metrics \u2013 the same \u2018key performance indicators\u2019 \u2013 you\u2019ll all be measuring different things and coming up with different forecasts. Ensure you have a KPI dashboard in one place that keeps everybody aligned<\/a>.<\/p>\n\n\n\n

Decide on a small set of metrics and make sure everyone is tuned to them above all others. Without this, forecasting can be a subjective debate. With it, it\u2019s a calculation. <\/p>\n\n\n\n

Go forth and forecast<\/h3>\n\n\n\n

So those are 7 of the mistakes we see all the time in our work with sales teams across many different markets.<\/p>\n\n\n\n

Admittedly, avoiding all of them doesn\u2019t guarantee 100 % accuracy. But avoiding these mistakes will help make sure your predictions are based on reality.<\/p>\n\n\n\n

Get it right, and sales forecasting can be a hugely powerful contributor to your company\u2019s success. Get it wrong and you could slam into some nasty surprises.<\/p>\n\n\n\n

To drill down into what best-practice sales forecasting looks like, come and get the free eBook, Sales Forecasting Comes of Age<\/a>.<\/p>\n\n\n\n

\n
Sales Forecasting Comes of Age E-Book<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Sales forecast is an important indicator of business performance. Learn how to avoid common mistakes to ensure accurate sales forecasting. <\/p>\n","protected":false},"author":1,"featured_media":2016,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"sf_justforyou_enable_alt":true,"optimizely_content_id":"6cd4053f273340718f420d630bcc475a","post_meta_title":"","ai_synopsis":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"sf_topic":[143,53,11,158,4],"sf_content_type":[],"coauthors":[16],"class_list":["post-2014","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","sf_topic-analytics","sf_topic-collaboration","sf_topic-data-culture","sf_topic-customer-journey","sf_topic-sales"],"yoast_head":"\n7 of the Most Common Mistakes in Sales Forecasting - Salesforce<\/title>\n<meta name=\"description\" content=\"Sales forecast is an important indicator of business performance. 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