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5 Sales Forecasting Best Practices You Need to Know

Run an efficient & data-driven forecasting process with Weflow
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Sales forecasting is crucial for making data-driven decisions, optimizing resource allocation, and improving goal-setting. Follow these five sales forecasting best practices to improve your forecasts.

1. Make sure you’re working with clean data

It’s impossible for your sales forecasts to be even remotely accurate if you’re working with incomplete or inaccurate data.

Missing or inaccurate CRM data is a problem for most sales organizations. It happens for a number of reasons — important information on deals gets scattered across different places (both online and offline), sales reps forget to update opportunities or do so partially throughout the sales process, etc.

This results in inaccurate forecasts and failed deals. To prevent this from happening, you need to make sure you’re working with complete and accurate data.

The best way to do this is to automate sales activity tracking. This will ensure all relevant data ends up in your CRM.

A tool like Weflow can help you automate email logging and activity tracking, syncing all your reps’ emails and activities to Salesforce automatically.

2. Choose the right sales forecasting method

There are a variety of different sales forecasting methods out there, so it’s important that you choose the most suitable one for your business. A few things you’ll want to consider when choosing a forecasting method include:

  • The type and amount of data you have available – Some forecasting methods require more (and specific) data compared to others. If you don’t have access to plenty of historical sales data, for example, you’ll want to choose a method that doesn’t rely on historical data as much.
  • Level of accuracy needed – Forecasting methods come with varying degrees of accuracy. If you need your forecasts to be extremely accurate, you’ll need to opt for more advanced methods that take advantage of artificial intelligence and machine learning.
  • Your budget – If you’re working with a small budget, you’ll likely want to avoid forecasting methods that require expensive software.

Here are some of the most popular sales forecasting methods to consider:

  • Historical forecasting – Uses historical data to predict future sales performance.
  • Pipeline forecasting – Predicts future revenue based on opportunities that are currently in the pipeline and their likelihood of closing.
  • Opportunity stage forecasting – Assigns a value to each opportunity based on opportunity stage, with opportunities further down the sales pipeline being considered more likely to close.
  • Intuitive sales forecasting – Involves using sales reps’ insights on opportunities to determine how likely deals are to close. 
  • Multivariate forecasting – Uses multiple data sources (e.g. historical sales data, market trends, brand sentiment, etc.) to create sales forecasts, often with the help of machine learning algorithms.

3. Account for internal and external factors

Failing to account for internal and external factors is what makes most sales forecasts inaccurate. Factors you should consider when creating your sales forecast include:

  • Economic conditions – The economic climate (encompassing inflation, consumer spending, employment levels, and more) will have an impact on your sales, so you should consider it carefully when creating a forecast.
  • Seasonality – You should take peak season and off-season periods into account when forecasting.
  • Market and industry changes – Any significant market and industry changes, such as new competitors or technology, can impact your sales revenue and should be included in your forecasts.
  • Legislative changes – If changes to state or federal regulations can impact your sales, you should take these into account.
  • Territory shifts – Are you planning on moving into new markets? It will likely take your reps some time to adjust, which will be reflected in your sales revenue.
  • Hiring and layoffs – Hiring or firing sales team members will likely have an impact on how much revenue your team can bring in, so make sure to take this into account when creating a forecast.

4. Use sales forecasting software

Are you still using spreadsheets for sales forecasting? While Microsoft Excel and Google Sheets both have a forecasting function, it’s based on linear regression and is only suitable for creating forecasts based on historical sales data.

If you need more accurate forecasts and would like to use advanced forecasting techniques, you’ll require specialized sales forecasting software.

A tool like Weflow can help you create highly accurate sales forecasts.

You can use it to submit, review, and track changes to your sales forecasts while syncing everything to Salesforce automatically.

It supports collaborative forecasting, waterfalls, and quarterly predictions to enable you to forecast revenue with confidence.

As already mentioned, Weflow’s sales activity tracking feature will help you have more accurate and complete CRM data. This, in turn, will enable you to create a more accurate sales forecast.

Collaborative forecasting in Weflow

5. Review and update your forecast regularly

You should review and update your sales forecasts regularly.

For instance, you can set up a bottom-up sales forecasting process to do so in a structured way (we dedicated an entire article to it, incl. a free implementation guide!).

How frequently you should do this will depend on your specific business. Most businesses would benefit from a monthly forecast review.

When reviewing your sales forecast, make sure to take the current sales performance and market conditions into account.

If any significant changes in your market occur (such as the emergence of a new competitor), consider how these might impact your forecast and update it accordingly.

This will ensure your sales forecasts are as accurate as possible.

Improve your sales forecasting this year

For effective and accurate sales forecasting, you’ll want to make sure to:

  • Work with complete and accurate CRM data
  • Choose the right sales forecasting method for your business
  • Account for relevant internal and external factors
  • Use dedicated sales forecasting software
  • Review and update your forecasts regularly

While you’re here, check out these sales forecasting guides as well:

Finally, bookmark the Weflow blog and come back for more help when you need it.

Boris Mustapic

Boris Mustapic is the Head of Content at Weflow. He has over a decade of experience in the digital marketing industry, and has helped dozens of B2B SaaS brands drive growth through content marketing.

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