Forecast with Precision

Learning Objectives

After completing this module, you’ll be able to:

Differentiate between forecasting and pipeline.
Define your sales process.
Explain why it’s important to inspect your forecast in Salesforce.

Now that your reps are snuggled into their balanced territories aligned around company goals, let’s use the power of forecasting to construct a more brilliant future. Forecasting is so much more than just a report of what’s coming down the pipe. It’s crucial knowledge that can empower you to make better business decisions proactively. If you can learn how to forecast effectively without spending endless hours in spreadsheets, you’ll have a built-in advantage.

First Things First. What Is Forecasting?

Let’s make sure we’re on the same page about the forecasting, especially when defining the difference between pipeline and forecast.

Pipeline is a comprehensive view of a rep’s open opportunities, no matter what stage they’re in. It includes everything from the newest prospect to that opportunity with a pen in hand, ready to sign.
Forecast is a subset of the pipeline and includes just those deals expected to close in a certain period, like this quarter, for example.

While both are important, forecasting is key to decision-making, because it measures how much revenue we think will actually come in. That’s the type of information that influences important things like hiring or even stock prices.

Now that you’re fired up to forecast, here are best practices that can help your sales teams make smarter decisions.

Define Your Sales Process

Before you begin forecasting, establish consistent terminology for your sales cycle. If you’re using deal stages, make sure “Stage 2” means the same thing no matter which sales rep reports it.

Next, standardize your process. What steps are essential before a deal can move on to the next stage? Should product managers or leadership be brought in at a certain stage? If you’re not sure, talk with top reps and sales leaders to define these steps from start to finish, then communicate them to your entire sales team.

Consider using Sales Path to guide reps through the sales cycle automatically. No matter how much training you do, someone will forget something. Make it easier on yourself and build your process into Salesforce.

Inspect the Forecast Constantly

It’s important to carefully review your forecast data often, including on dedicated calls with your sales team.

Salesforce's Richard Lind, RVP of Commercial Sales, suggests that front-line managers should ask their teams these questions to place deals in the right stages and improve forecast accuracy.

Does the prospect have a budget?
Have their executives signed off?
Are all key decision makers identified and engaged?
Have we effectively quantified ROI to the buyers?
Is there a compelling event driving the timeline?

Track Your Forecast in Salesforce

Don’t make the mistake of running your weekly calls—or doing any sort of forecasting—from spreadsheets. The minute you export a spreadsheet, even if it’s from Salesforce, it becomes static, stale, and inaccurate. Who wants to make decisions based on old data?

The better option is to run your call and make your decisions from dashboards in Salesforce. (Reminder: Dashboards are visual representations of reports.) Because they’re in Salesforce, your data is updated in real time, anytime a rep makes a change.

If you have a more established or complex sales team, your best option is the Collaborative Forecasts tool included with your Sales Cloud license. You can customize it to suit your business. Forecast quarterly or monthly based on revenue or quantity, or both, and set additional quotas based on product families. It even allows for manager judgement.

If you think a sales rep’s forecast was too high or too low, you can override their initial numbers, and roll the results up to leadership without losing the raw data. You can also credit the right amounts to sales overlays—by revenue, contract value, and more—and see how they’re contributing to your number.

Time for Success

Now you know:

How to structure your territories to support company goals and motivate every rep by giving them a fair chance of making quota.
How to manage your territories using Salesforce (or the AppExchange) and maintain them all year.
How to improve forecasting and decision-making using real-time data.

You now have the infrastructure for success, and a map to widespread rep happiness. All you have to do is follow the steps to reach your goal!