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Sales Forecasting Best Practices with Salesforce

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When it comes to forecasting, most technology companies want to better understand patterns of adoption and benchmark across their customer base. Typically the goal is to increase the total number of billable accounts by getting real-time visibility into each account’s consumption behavior.

Organizations can improve their sales cycles by introducing processes that allow them to improve task management and enhance their Salesforce Sales Cloud implementations and instances. In this article, we will help you take a step back and evaluate best practices whether you are looking to revamp your current sales forecasting workflows or develop new sources of revenue.

6 Steps to Improve Your Sales Forecasting

These basic steps will work whether you are using Excel or Salesforce or any other CRM software to record customer and account data.

1. Begin with a Simple Model 

The more developed your customer base and product offerings, the more elaborate your forecasting model will be. It is best to start with a simpler model especially if you are growing a new pipeline or product offering to your partners and distributors. And by simple what we mean is focusing on fewer variables to keep track of that will help to make it easier to explain to your sales team and achieve your sales goals. 

Don’t miss to consider seasonality as a factor in your sales forecasting, because if you only treat monthly and quarterly forecasts linearly, account accuracy will be lessened, and miss important factors to meet your final goal. For many industries, if their forecasts are even 10% off, this can mean millions of dollars wasted.

And don’t forget that most forecasting models will change over time. Once you clear understanding of your forecast model for the first year, take time to consider updating it in the following year, factoring in industry realities such as the release of new products, expansion into new markets, or an increase in competition.

2. Review and Keep Clean Records

Data is king. More than ever before, sales, finance, and marketing teams alike need accurate and real-time data. This means especially when it comes to sales forecasting, clear standards need to be set and communicated to sales reps or you will end up with forecast data defined on an individual level, leading to inconsistent data entries or unused properties that fail to provide error-free reports.

Let’s be honest, many companies currently make many decisions on dirty and inconsistent data. Plus, your sales data is a living document and would be useless if you don’t actually review and use it as a reference point at certain intervals to help direct all company efforts. Here are some steps our own Sales team takes to ensure success in all of our project planning and forecasting: 

  • Referring to the forecast in team meetings consistently.
  • Taking time to update on new opportunities and deals at one-on-one meetings.
  • Performing spot checks on account data, records, and deals to spot inconsistencies.

3. Develop a Pipeline & Account Action Plan 

It goes without saying that an increased number of leads increases the total number of closed deals. The first step in developing an action plan is to clearly state the minimum required number of opportunities that will convert into quality leads. Producing this requirement will also depend on market trends and competition. 

Another important factor in developing a robust plan is to understand conversion rates at each stage of the sales funnel. One simple exercise to better monitor and assess your pipeline plan success is to do the math by working backward through your sales process. This step is important because this information lets you build an accurate sales forecast based on stage-by-stage conversion rates.

4. Implement Smart Forecasting Tools

If you are struggling to have an at-a-glance view of company data with detailed trends and gaps to ensure teams will hit their targets, forecasting tools, such as Groundswell’s custom Sales Cloud Forecasting app, are designed to save time and improve how you create deals tailored to customers. Forecasting tools help teams to understand what to do with existing data and how to make sense of it.

But none of the forecasting tools would actually work until you can access and input historical data. Although it’s true past sales are not always accurate predictors of the future, most technology companies have historical data they can use to determine realistic sales forecasts.  This year you might face unpredictable factors that could affect sales in the upcoming year, such as releasing new products, expanding into new markets, facing an increase in competition, and so on and so forth. These are scenarios that should be integrated into your evaluation and acceptance of your final forecast numbers.


5. Advocate for Departments to Collaborate

Forecasting works best as a team effort. It is a proven fact that a well-constructed forecast shouldn’t be produced from only one team’s contribution but from multiple, if not all, departments. Different teams will offer their own expertise and ensure a more well-rounded forecasting process is established. Not only that, this will allow forecast processes to be focused on logical, data-driven decisions, as well as be closely observed and subject to scrutiny, as no individual can go in and adjust the data to suit their interests and biases.

This was the reality for Slack when they decided to involve their Customer Success team to input additional account consumption data into the forecasting process. Read more about how we helped them tackle this new process with Salesforce.

It is vital to inform teams to not just provide any data or information they have. Here are some important habits to capitalize on during end-of-year sales forecasting:

  • Using up-to-date or accurate data
  • Reaching alignment on critical metrics
  • Avoiding intuition-based guesses and decisions
  • Forecasting only up to two quarters during economic instability

6. Incorporate External Factors/Data

While it is essential for sales forecasts to rely on easily accessible internal and historical data, adopting external factors will help to look at your business from a different angle and provide new insights. This is also how you can integrate forecasting into other business objectives, such as opening new locations, hiring new employees, competition lowering their prices and developing new custom features, and running new campaigns. It goes without saying that keeping a pulse on how the market is expanding or contracting will help you create more accurate predictions.

Tip: Remember that data can only help to see the correlation but not necessarily the causation. It is important to supplement the data you glean from your Sales Cloud forecast model with qualitative data from your sales reps.

What is Sales Forecasting Software?

Slack Sales Forecasting App

In simple terms, sales forecasting software, like Salesforce Forecasting solutions, help tech organizations predict how much they’re going to make and when. By utilizing historical data and the current pipeline, the software automates the whole process to provide real-time and accurate estimates.

But it is more than just providing companies with a more efficient alternative to manual forecasting workflows. Choosing the right forecasting software means working with inaccurate forecasts that can be more detrimental than just missing sales targets and revenue goals. In reality, forecasting affects more than just sales – poor inventory and resource management, inaccurate staffing, reduced productivity, and so on.

For Groundswell clients, Forecasting solutions have provided:

  • Data accuracy with reduced human error in data entry and calculations.
  • Real-time insights that are easily accessible throughout the forecast period.
  • Accurate predictions and reporting to aid in developing corrective actions.

For Groundswell developing solutions such as the Forecasting App, means ensuring all forecasts are accurately processed and custom dashboards are easily accessible so that management can have an at-a-glance view of the right data before making business decisions. This allows teams to be proactive in managing their accounts if there is a projected downturn. 

Our Engagement team is available to provide the right information to help you develop and scale your forecasting processes. Salesforce Sales Cloud and Revenue Cloud have helped many tech companies reach efficiencies with a single source of truth that allows them to scale their business and continue to be profitable. Contact us today to find out how we can work together:

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