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Sales Forecasting is the process of predicting future sales and revenue for business leaders to make critical decisions
On a daily basis, business and sales leaders are faced with major decisions. Decisions that are influenced by factors both macro and micro—such as
What these leaders then need is a sales forecasting software that can make sense of these random and arbitrary factors to make crucial business decisions, accelerate growth, increase retention, and improve cash flow.
A good place to start sales forecasting is to ensure every individual and team have targets set on a weekly/monthly basis. Most growing businesses use their CRM software and set targets based on what they have achieved.
Understand prospect’s needs and pain points, and educate them through online presentations and demos on how your product can help solve their business challenge.
Have a defined sales process so there is uniformity in the way sales reps identify a lead and convert the opportunity into a deal. Set criteria for your team for converting a lead into an opportunity.
A sales rep inflating the sales prediction could have a detrimental effect on business. Ensure that there is a followup mechanism for sales reps so they are careful about data and deals they key into the system.
Effectiveness score: 2/5
This is probably the oldest sales forecasting methodology for small businesses. In this method, if you want to project sales for a particular week, you can do that based on data from the previous week or year to arrive at an estimate. For instance you if won business worth $10000 in September, your sales forecast would be $10000-$11000 in October.
Effectiveness score: 3/5
This sales forecast method depends on probability and analyzes behavioral prospects. A CRM that tracks the in-app and website behavior of a prospect will play a huge role in identifying leads that would convert to prospects based on their demo. If you find that more leads who sign up for trial from your website are converting into customers, you can plan your activities around this behavior.
Effectiveness score: 4/5
A deal pipeline is the easiest and most accurate way to forecast sales as it is based on data within your CRM. This method involves adding up the value of all the current deals in your sales pipeline for a particular period of time. A good CRM software like Freshworks CRM comes with a visual pipeline of all your deals in one place, which will help you forecast your sales better.
There is only a sliver of difference between a sales pipeline and a sales forecast and not many know this difference. Sales pipeline shows all your current deals in the sales pipeline. Whereas sales forecast predicts the opportunities that will be closed in a given time period.
When the strength of your sales team fluctuates, your sales numbers will automatically change. When you hire sales reps, the sales prediction increases.
Policy changes such as discounts, pricing and product changes, business model realignment and commissions can impact your sales forecast.
Sales reps require time to adjust to a new territory. Sales is usually better in familiar territories than in a new territory when a rep is just settling in.
When the strength of your sales team fluctuates, your sales numbers will automatically change. When you hire more sales reps, the sales prediction increases considerably.
When the economy is booming, sales are good across industries, whereas a recession would result in churn.
When you tweak your product to cater to the needs of the customer, your sales are likely to increase. A stagnant product would result in plateauing sales.
A CRM with the capability to predict future sales can significantly improve your decision-making abilities.
With a CRM like Freshworks CRM, you can track sales growth over multiple timeframes, identify the value of deals in each stage, generate visual reports without complex setups, and monitor the performance of your sales team, all from within one intuitive system.
If you want to make informed business decisions, then Freshworks CRM with in-built predictive sales forecasting capabilities can help you achieve that.
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