Feb 9, 2023

Harnessing the Power of Sales Forecasting For Your Business: A Guide To Success

Mark Fershteyn
CEO & Co-founder

Today's business and economic environment is rapidly changing, making sales forecasting tougher than it used to be. However, forecasting is still required for businesses to understand how their sales teams are likely to perform.

It's a *somewhat* clear crystal ball looking into the future of revenue that requires more than just guesswork. It's a must-have for any organization looking to meet growth expectations, yet 93% of sales leaders are unable to forecast revenue within 5 percent, even with two weeks left in the quarter. 

It may seem complex to beginners, but with the right tools and processes, sales forecasting can be done with relative ease.

To get you started, we'll cover just what sales forecasting is, how teams can use such data, and how to leverage sales forecasting software to make this process easier. 

What is sales forecasting?

Sales forecasting is the process of predicting performance and trends based on deal history, present data, insights from team members, and other available information. The goal of forecasting is to anticipate upcoming opportunities or challenges that teams can use to adjust their strategy to maximize revenue and adjust spend on growth accordingly.

An accurate forecast not only enables sales teams to make better decisions but also provides an overall view of how deals may be impacted by changes in market conditions or customer preferences.

How most companies forecast revenue

Today, companies rely on Salesforce or another CRM system to store sales data.

The process usually starts with each rep inputting their projected sales figures into the CRM. These projections are then combined and evaluated against past sales performance to create a forecast for future sales performance.

Within the CRM, each deal stage is weighted at a different percentage. By calculating the probability of each stage, you can create, what some would say, is a realistic estimate of sales performance over the next quarter or year.

🤞 The sales rep reports to the sales manager with their forecasts of how they feel their deals are going.

📞 The sales manager reports to the VP.

📞 The VP reports to the CRO.

📞 The CRO reports to the CEO.

🚨 The CEO reports to their investors and board of directors.

Forecasting is just a corporate game of telephone.

The problem with traditional forecasting

Despite the ability of business leaders to predict performance to some degree, today's approach to forecasting has its flaws.

First and foremost, weighted estimates across various stages rely on feelings and hopes, not actual data. While entering data for each deal, sales reps may overestimate their chances of closing, resulting in inaccurate projections.

It's based on each sales rep's sales activity and belief, not the underlying factual data that can more accurately predict the percentage chance of closing the deal.

Traditional methods typically lack the most vital information that evaluates four critical indicators of conversion, including:

1. Buyer engagement

How engaged are buyers at each stage?

What content are they viewing, and for how long?

Understanding buyer engagement helps estimate the customer's willingness and likelihood to purchase.

2. Next steps

What is the process?

Is this being tracked through a Mutual Action Plan?

Is everything being completed as expected? 

3. The right stakeholders 

Do we know who the economic buyer is?

Are we multithreading?

Does the key decision-maker know about the product and conversation?

Getting a look at the decision-making hierarchy of every deal will indicate who you need to speak to and the likelihood of converting at each level. 

4. Qualification frameworks

Have we answered the questions that qualify buyers through frameworks like MEDDICC? Digging into these frameworks and revealing the complete picture of the customer's needs and buying process will help salespeople make more informed decisions.

These questions and indicators are typically not incorporated thoroughly in the deal reports that reside in a CRM.

Software solutions for forecasting

Today's technology can provide more accurate sales forecasting through automation. Forecasting software provides a platform for sales reps to track prospects throughout the sales cycle and view sales performance in real-time, and allow sales operations leaders to generate more detailed forecasts from granular data points.

Sales forecasting software takes the guesswork out of sales performance prediction by utilizing predictive analytics, AI, and machine learning technologies to help sales teams get ahead of their deals — rather than relying on subjective research.

There are many tools available on the market today, including the following:

  1. - a revenue intelligence platform for B2B sales teams to gain insights into sales performance and customer experience. Gong's solution offers real-time insights into the sales pipeline, conversation analysis, and sales cadence analytics. 
  2. - a sales performance platform that allows sales reps to see actionable insights in real-time and collaborate on unified sales processes, data, and insights. Integrated with CRMs, sales teams gain an automation platform that can help them identify sales opportunities, track sales performance, and make the sales process more efficient.
  3. Recapped - a customer collaboration platform that helps sales teams align with their buyers to simplify their B2B buying process while tracking buyer engagement. Through Mutual Action Plan, consolidated communication, and one central content repository, sales teams can monitor their entire deal performance based on data (instead of emotions) to improve forecasting abilities while integrating with their CRM.

However, not all software is created equally.

While Gong and BoostUp offer compelling data to support forecasting efforts, Recapped offers a unique sales process map to help sales teams get the most out of their sales conversations and identify each of the four critical indicators: buyer engagement, next steps, the right stakeholders, and qualification frameworks.

Recapped gives context to content to what the buyer cares about through their engagement. If the buyer is interacting with certain content, this gives the seller competitive advantage on how they should position their following conversation to what’s most important to their buyers.

The higher the buyer engagement score is based on data analytics in Recapped, the more likelihood the deal will close. Read more about how ServiceTrade improved their forecasting and cut their sales cycles by 25% in 1 quarter.

With Recapped, forecasting is based on actual data through buyer engagement scores.

Whichever solution you choose, it should provide your sales reps with powerful insights and analytics to help them make more informed decisions.

With the right sales forecasting software, sales teams can get ahead of their deals and predict sales performance with confidence.

Let's recap the bottom line

Today, sales forecasting is an immediate priority. It's a guiding light that sales teams need to use to make more informed decisions, accurately predict sales performance, and effectively manage their sales pipeline.

It gives insights into the requirements and investments a sales team will need to adjust strategies, close deals, generate pipeline, and stay on track to meet ongoing sales goals. With the right software solutions and sales forecasting processes, sales teams can stay ahead of their deals and ultimately win more business.

Base your forecasting on buyer engagement data through Recapped, not emotions.

Ready to forecast your way to success?

Recapped's all-in-one customer-collaboration platform provides Buyer-Centric Forecasting™ to help your sales team make real decisions with Deal Engagement Score, track prospect engagement and behavior, and manage deals, pilots, and implementations.

Recapped brings your entire deal into a single, living, breathing page. Instead of jumping through emails and spending hours on deal reviews, you can immediately see everything in one place and uncover gaps.

  • Is the deal qualified?
  • Do we have the right people involved?
  • Is there a clear timeline with next steps?
  • How engaged are the buyers throughout this journey?

This is literally a “lie detector test” for your deals.

Start today with a free consultation: