Sales Forecasting Examples for Better Business Growth
Published on Thursday, May 4, 2023
Accurate sales forecasting can lead to improved supply chain management, steady cash flow, and faster sales growth. But what is sales forecasting really?
Accountants, CFOs, and sales managers define sales forecasting as the process of predicting future sales for a given time period. There are various sales forecasting methods that can be used to create these predictions.
The accuracy of your forecast will depend on the accuracy of your data. Solid, real-time sales data aggregated from a variety of up-to-date sources leads to more reliable forecasting and better business insights.
How to Improve Sales Forecasting Accuracy
Sales forecast accuracy requires accurate data and a reliable sales forecasting method. Here are seven tips to help you maximize the value of your sales data.
- Choose a forecasting method and stick with it. Consistency leads to accuracy in sales forecasting. After all, you can’t spot trends if you keep changing your forecasting methods.
- Don’t be afraid to refine your sales forecasting methods over time. As your business grows and accumulates data, you may need to adjust your forecasting approach to incorporate new insights.
- Consider all factors that could affect your business. Historical sales data only goes so far when it comes to predicting future sales. Consider other factors such as seasonality, new product launches, market trends, and personnel changes to generate a more accurate prediction.
- Keep forecasting simple. Focus on the most impactful variables and avoid overanalyzing specific products or sales channels.
- Be diligent about tracking discrepancies and exceptions. Document these in your reports to ensure you’re seeing the data with more realism than optimism.
- Ensure your sales data is accurate from the beginning. Consider using tools that pull real-time data to create more accurate reports.
- Use sales forecasting software rather than Excel spreadsheets to eliminate the possibility of human error. Many inaccuracies in sales forecasting stem from typos, transposed digits, or entering the wrong data in the wrong field. Sales forecasting tools automate the process by pulling real-time and historical data directly from your CRM, CMS, accounting software, and point-of-sale systems.
Sales Forecasting Examples
Explore the different types of sales forecasting methods to see which method may be best for your business.
The most basic of sales forecasting methods, intuitive forecasting relies on educated guesses from salespeople to predict future sales for a given time period. A startup without historical sales data can create an intuitive forecast using factors such as seasonality, market research, current market share, and planned strategic marketing efforts.
Companies with access to historical data may leverage past forecasts and performance to create realistic sales plans for the future.
Opportunity Stage Forecasting
Companies with accurate data about their sales pipeline (typically tracked through a CRM like Salesforce) can create accurate sales forecasting by analyzing the stage of each lead and the probability of closing.
Length of Sales Cycle Forecasting
Similar to opportunity stage forecasting, length of sales cycle forecasting relies on accurate data from the sales pipeline. But rather than looking at the probability of closing, it evaluates the time a lead should take to close.
Multivariable forecasting combines multiple techniques to create a sales forecast that explores the business from all angles. Multivariable forecasting analysis may yield more accurate results than any of the above methods because it accounts for various factors that affect a company’s sales growth.
Automate Sales Forecasting with revVana
If you’ve tried multiple methods of sales forecasting, but are still struggling with accuracy, consider implementing a sales and revenue forecasting software like revVana. revVana is built natively in Salesforce; this integration with your CRM allows you to easily generate automated forecasts and eliminate manual errors and inaccuracies.
Request a live demo to see how revVana can help you boost your sales forecasting accuracy