How to Improve Sales Forecasting Accuracy: 5 Tips to Boost Accuracy and Speed

We’re 10 weeks into the forecast, and my sales rep tells me that this $600k deal is now pushed out to next quarter because the buyer went on vacation for two months.

You desperately search for something to accelerate, but with only 2 weeks left in the quarter you have nothing that can be accelerated at all.

That’s a call forecasting miss.

I see too many companies that have the best sales teams, but they don’t do enough to keep them motivated.

You don’t need to be a genius or have incredible sales skills for this.

We’re going to go over the reasons why your sales forecasting fails, and 5 ways on how to improve sales forecasting accuracy.


What’s Wrong with Your Call Forecast?

Companies that have a good history of predicting revenue get rewarded.

When you have accurate forecasts, it’s easier to grow the business. You know how and where to invest because of your forecast.

CSO Insights found that team missed their goals more than half the time.

If your forecasts are worse than a flip of a coin, you might as well take all that money to Vegas. You would probably get better odds there.

Why is it that forecasting often turns out wrong?

Call Forecast can fail for three reasons.

Teams fail to take into account the journey it takes to get a single number for an entire quarter.

A naive way to forecast will allow mistakes to slip in. Forecasting requires careful inspection and execution throughout the quarter.

The call forecast process is a waste of time for everyone. It takes hours away from what reps and managers should be doing–selling.

Companies often see forecasting as the responsibility of sales. Marketing and Customer Success may not be involved in it at all, which can lead to inaccurate forecasts.

Here are 5 ways to fix these issues.

These are the five things on how to improve sales forecasting accuracy you can start doing today to be better.

5 Ways to Make Sales Forecasting Efficient and Accurate

1. Set a process

Some businesses forecast quarterly, some weekly. Some companies also forecast by product lines and how many new customers they will attract.

The one thing that most companies struggle with is consistency.

If your US team is forecasting on a quarterly basis with only managers submitting and the EMEA region forecasts weekly, then it’s probably going to take hours for you in sales ops just trying to make sense of all that data.

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The solution is to create a process that will work for every segment of your business and then follow it on a regular basis.

No matter what kind of company you have, there are a few things that every forecast process should include.

  • Look at your current quarter forecast and see if you are on track.
  • Review your pipeline to see if anything needs more attention or is at-risk.
  • Think about the deals which need more attention and spend some time reviewing your closing strategy.
  • Discuss any upcoming deals that were pushed from last quarter.
  • Be sure to review the upcoming quarter’s pipeline and coverage so you stay on top of things.

Once you have a process in place, forecasts will be more accurate and it’ll happen faster

2. Define your metrics

Consistency is important, but that’s not enough if your teams don’t speak the same language.

You need all employees to be on the same page and working towards a common goal.

Figure out what metrics are important for your business, and then set up a plan to measure those regularly.

Here are a few of the common metrics to track for sales forecasting:

  • The number of deals that should have closed but didn’t.
  • The amount of deals closed in a quarter.
  • Win rate: The percentage of closed opportunities in which the company won.
  • How much pipeline has been generated for the quarter.
  • I can estimate how much pipeline I already have for the next quarter.
  • A quota is a goal set for the salesperson to meet. The quotas are usually in terms of revenue and can be increased or decreased depending on how well they’re meeting their goals.
  • Pipeline coverage is an important metric to evaluate whether the company’s goals can be met or exceeded.
  • Conversion rate: The number of closed opportunities, both won and lost.
  • ASP: The average price of all closed-won deals.
  • The average time it takes to win a deal.
  • Churn rate: The percentage of people who stop their subscription to a service.
  • Accuracy is the difference between a forecast and what actually happens.

All your teams need to know what numbers are being tracked and how they affect the call forecast.

When the call forecast is incorrect, it can help to identify what went wrong and how we might fix that in future forecasts.

3. Regularly Inspect Your Pipeline

It’s important to know which deals are solid, and which ones might not close.

The question is how.

Data is one of the best ways to find out if a deal will be successful. If there are too many customers who have not responded, it can be an indicator that something could go wrong.

We can start by examining the difference between a good and bad deal.

This is a good deal:

Reps are making contact with the client and sending emails, exchanging files, and holding meetings.

The prospect is following the company on social media, and they are emailing them with questions about their products.

Ideally, there will be a meeting scheduled for the next time.

An at-risk deal, on the other hand, might look like this:

There was some initial interest, but then they stopped responding to my emails.

I don’t think this company is interested in my marketing campaigns, and they haven’t booked a meeting to talk about it.

Too often I see people wasting time on deals that are likely to fail. They don’t know which ones will work and they invest in them anyway.

If you are not closing on deals, then your time would be better spent elsewhere.

When you’re trying to determine sales activity and prospect engagement, there are a few indicators that might come up:

  • Emails
  • Meetings
  • Calls
  • Webinar registrations
  • Content downloads
  • Website chats
  • etc.

Make sure you follow the 3 P’s: Personality, Passion and Productivity.

  • I always make sure to check the health of a deal before I close it.
  • When I am prioritizing deals, I only focus on the right ones and ignore bad opportunities.
  • Pursue: Put in the effort to make sure your deals are moving forward.

4. Automate Some Processes

It’s difficult to forecast sales without a process. The one that most companies use is ineffective.

For diversity, companies use a combination of spreadsheets, offline reports and manual processes. There are also 1:1 or group conversations that go undocumented.

Companies need to have a CRM system of record for their business, but it was not designed with the modern revenue process in mind. As a result, teams turn to hodgepodge software that can’t alert you if you’re running short on pipeline next quarter or show where your deals are going wrong.

This kind of patchwork system is so complex, it’s bound to have mistakes and oversights.

This is why automation of these processes has become so popular.

Data quality will improve and save time.

With better data quality, you can also use AI to improve forecasting and other aspects of your business.

Automation is important because it makes your employees happy.

Tracking every email, call or attachment is a way to make an accurate forecast.

And who can blame them?

Hiring new salespeople is a tedious and time-consuming process, so it can distract from the company’s main goal: selling.

5. Look beyond the 90 days

Too many teams miss their forecast because they don’t look far enough ahead.

It’s the 90:10 mistake.

They are mostly focused on the current quarter, and only sparingly think about out-quarters.

It’s great to focus on executing deals, but it can be a big mistake if you forget about the rest of the year.

If you don’t constantly work on the next quarter’s pipeline, then your business will be headed for disaster. You won’t have time to correct course.

In a business that doesn’t rely heavily on transactions, what you do today will affect how your company does in the future.

Shift from 90:10 to 60:40.

Your focus should still be on closing the deals in front of you, but it doesn’t hurt to keep an eye out for what’s coming up.

Include everyone in the company when you plan future quarters, and be sure to work with Revenue Operations (Rev Ops), Sales, Marketing, SDRs. The channel needs to also help build your pipeline.

Teams need to be aligned and work towards the same goal.

What Is the State of Your Forecasting Process?

If you don't know how to improve sales forecasting accuracy, it could be hurting your company.

If you are running a company, think about how to make your forecast process more transparent.

  • Is there a process for measuring progress?
  • What measurements do you use to measure your success?
  • Do you look through your pipeline for gaps?
  • I’ve been thinking about automating my data collection.
  • When it comes to predicting revenue, you should always look at the forecast.

If you answered no to any of these, there is more work that needs to be done. Find out where the gaps are and figure out how they can improve their forecast.


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Just to give you an idea. 😀  how to improve sales forecasting accuracy

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    • A company in the Financial Services or Banking industry
    • Who have more than 10 employees
    • That spend money on Adwords
    • Who use Hubspot
    • Who currently have job openings for marketing help
    • With the role of HR Manager
    • That has only been in this role for less than 1 year
Editors Note:

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Justin McGill
About Author: Justin McGill
Justin McGill is the Founder of LeadFuze - a lead generation platform that discovers new leads for you automatically. Get 25 leads free.