7 Ways to Improve Sales Forecasting

7 Ways to Improve Sales Forecasting

So, why do we need to improve our sales forecasting accuracy?

Simply put, if you improve your sales forecasting, you can improve your sales team numbers.

Higher Sales Forecasting Accuracy = More Sales = More Money 

Having higher sales forecasting accuracy will gain you clearer and repeatable information on which types of deals actually close, which deals are best for your company, your ideal targets, and how your best sales reps work.

The goal of sales forecasting is to guide and improve the sales process.

In a published 1998 Business Horizons paper entitled, “Seven Keys to Better Forecasting,” authors Mentzer and Schroeter describe how Brake Parts, Inc., a manufacturer of automotive aftermarket parts, improved its bottom line by $6 million per month after launching a company-wide effort to improve sales forecasting effectiveness.

Not too bad…

Are you ready to improve your sales numbers?

Follow the below seven tips to improve your business’s sales forecasting.

1. Keep Forecasts Realistic

Find a healthy balance between stretching yourself to grow and being honest about your resources, capabilities and follow-through record. Too often salespeople are asked to plug in unrealistic numbers into a spreadsheet to help a sales manager or owner look good in a meeting. If you keep it real, your salespeople will respond when you ask them to stretch.

2. Know Your Sales Cycle Length

If you get a good lead today, when will it close?

Many inaccurate sales forecasts are produced because you get this one piece of data wrong, meaning your conversion rates are accurate but don’t take place in the window of time you assumed.

Remember that larger deals will take longer to close than smaller ones. By building in a conservative sales cycle length into your model, you’re making it easier to map expected sales to the week, month, or quarter in which they’re likely to close.

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3. Use A Model Which Is Consistent

There is no one sales forecasting method or sales forecasting model that works best for every company.

However, once you choose to use a particular model, stick with it, at least in the medium term. If you change your forecasting model, the sales data that you will have collected in earlier time periods will be useless to you going forward. Measurement and data-accuracy are the keys to accurate sales forecasting. Consistent application of the same model standardizes the format and makes it easier to review year after year.

4. Only Consider Real Prospects

Conduct regular deal reviews.

People will often say something that makes us feel like they are really interested. They might have even started the sales process by calling us or going to our website and asking for more information. If at some point the sale is not moving forward, we should start to take those prospects out. Energy might be better spent on your limited resources on future sales that will more certainly close.

5. Make Updating the Forecast Quick and Easy

Opportunities change after they’ve entered the pipeline. Close dates can change. Deals that were moving fast suddenly slow down and should probably be moved back to an earlier stage. Most reps don’t want to make these changes to opportunities in their CRM system, as that may imply weakness in their own pipelines and ability to bring on new business.

If you make it easy for sales-reps to implement changes to their forecasts, you will get more accurate results. Best way? Employ a top notch CRM system (Salesforce, SAP Hybris, or Microsoft Dynamics).

6. Reward Accuracy and Honesty

Very few sales organizations reward sales pipeline performance & behavior.

Companies typically compensate based on closed business but don’t reward individual sales reps based on historical data and forecast sales accuracy.

As a sales leader, you should aim to create incentives for your reps to produce accurate sales forecasts. Foster an environment where honest changes to forecasts, even if the news isn’t good, is encouraged and rewarded over time.

7. Make your Goals and Forecasts Important to Sales

Keep the forecast and results in front of everyone on a weekly or at least a month-by-month. When you recognize someone for sales attainment, tie it back to how they are doing regarding their forecast.


If you’re looking for a way to increase your company’s sales forecast accuracy, get deal-level insights into your entire pipeline, reduce deal slippage, and simply close more deals – Schedule a demo of the Datahug platform. Then call your CFO to let them know your team is going to be crushing their sales goals next quarter leveraging the power of Datahug.

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