Improving Forecasting Accuracy Using Salesforce
Leaders often have trouble accurately “nailing” their forecasting on a monthly or quarterly basis because there’s no true standardized way to forecast. It’s trusting your sellers and understanding the structure of your most lucrative in-play deals. Past that, there’s not much more you can do to forecast accurately.
Or is there?
No process is perfect, eventually, everyone will over or under-commit, that’s part of the game. We believe that utilizing your CRM (in this instance, Salesforce) as a place to track important KPIs and more nuanced details around large accounts does a great deal to eliminating the “guessing game” sales forecasting is often associated with. Understanding every sales team and forecasting call will be somewhat different. Still, the following best practices will ensure that your forecast is not only more accurate but that you and your team as a whole will better understand the “big bet” deals in play when you effectively tool your Salesforce.
- Opportunity Planning
You can utilize an opportunity planning process to improve your forecasting efforts. When a team follows the same SWOT analysis, tracks key stakeholders and their sentiment throughout the deal, and examines the account for upselling potential using a white-space template, it’s almost guaranteed you’ll have a better handle on the value of each deal. This is especially useful when you have large deals with multiple stakeholders involved.
A component of opportunity planning that can be overlooked is leveraging Salesforce reports to identify the number of stakeholders involved in deals won, along with WHO involved in those deals. Pull a closed won report over the last 6, 12, or 24 months to give yourself a nice sample size, and look for commonalities in who the main point of contact is in deals you win. Are those people documented in your map, and aligned to your objectives in the opportunity plan? This is a great way to get ahead of deals at risk and improve the likelihood of knowing where a deal stands.
Opportunity planning ultimately keeps sellers and leadership in lockstep throughout the sales cycle. That means when it comes time to sit down and forecast, all the players on your team will have a better and more realistic understanding of where each large opportunity lies.
- Advanced Forecasting Reports
The ability to create comprehensive reports gives you a major increase in visibility into each opportunity and your entire pipeline. You can see not only where deals are currently at, but also where/when they’re likely to close. This will help you adjust your forecast accordingly.
An important component of these reports is that they should be done within your Salesforce instance. Because Salesforce has such comprehensive reporting abilities, it’s only logical to do so. This ties into the best practice that all account and opportunity data should be stored in your CRM. If you have all your critical account data stored in Salesforce, you can report on some of the following metrics:
- Opportunities close when using an opportunity plan vs no plan
- Average deal size with total accuracy
- Average upsell potential by firmographic metrics
- Number of stakeholders in deals you win, by deal size/industry
There’s another way to help take this a step further. Using Opportunity History reports, you can begin to break down the conversion rates by stage as well. Pull all the opportunities for a period of time, and ensure you include the Opportunity ID. Using an opportunity history report, you can pull the “to” and “from” stages, filter by the stage you want to learn more about, and then filter by all opportunities that are closed won and pull those opportunity ID’s. It’s now simply doing a lookup to see where you have matches, and that will tell you your win rate.
- Align with Each Business Unit
The more visibility each business unit has for each large opportunity, the easier it becomes to forecast large deals where more than just a single account executive is needed to push the deal forward. Always remember; sales reps are in the “driver’s seat” for closing business, but that doesn’t mean your car and its maintenance should be neglected!
Perform a field audit with your Salesforce admin or operations team: is there anything else on the opportunity object that could be added to improve forecasting accuracy? Are there potential fields unique to your GTM strategy? Have a whiteboard session with your BU leaders.
You can add custom fields to track any additional information that you think would be helpful in forecasting, such as average deal size or expected close date.
When it comes to forecasting, being able to see the future is a mixture of art and science. It’s a skill that develops with time and practice for many sales leaders. And it’s usually a high priority for executives since one of their key tasks is to cut through all the company noise and dissect the pipeline—is this number based on fact or fiction?
The science of forecasting involves understanding what goes into a forecast and how you can make it more accurate. The art of forecasting requires using your intuition and experience to make your forecast more accurate. You can also use Salesforce as a tool to improve your forecasting accuracy.
Salesforce provides features that can help sales leaders improve their forecasting accuracy, including:
Utilizing Salesforce in this way will help you improve your forecasting accuracy and give you a better understanding of your pipeline.