How to Properly Forecast Your Timeline
Learn how to properly forecast your pipeline—ella’s way
Let me start by clarifying: your sales goals are NOT your sales forecast.
Goals are aspirational: in a perfect world, how much revenue would you bring in this week/month/quarter/year? With that in mind, what’s your plan to attain those goals?
Your sales pipeline forecast, on the other hand, is grounded in reality: based on your recent interactions with the prospects in your pipeline, what do you anticipate will close this week/month/quarter/year? Your forecast is typically based on metrics like historical sales data, industry trends, and the current status of your pipeline. When you forecast accurately, you can make better operational decisions (e.g. where should you allocate your resources? Do you need to hire more sales reps?).
Here’s how to effectively approach pipeline forecasting:
Develop an understanding of your overall sales process.
Study the metrics I mentioned above, like historical sales data, and look at reports from previous years on sales performance. Going through this type of analysis will help you understand the types of accounts and prospects that are most likely to close—and when.
Choose a forecasting model that works for you.
Once you have your head wrapped around your sales process, there are a number of different forecasting methodologies you can choose from:
Lead value-based. That historical sales data I mentioned earlier? Analyze it for each of your lead sources and assign a value to each source. Base that value on sales metrics like the total number of leads and average sales price per lead.
Opportunity stage-based. If you’re all about workflows, this is a great method for you! Map out clearly-defined stages of a deal based on your sales process. These can include: meeting scheduled, buyer qualified, proposal sent, deal won, etc.—once you’ve defined those stages, you can use them to develop your forecast.
Sales cycle length-based. This is one of the simplest methods: base your forecast on the amount of time it typically takes to move your prospect down the funnel and convert them to a customer.
Pipeline forecasting doesn’t have to be complicated. Choose the method that works for you, base the forecast on a solid understanding of your overall sales process, and you’ll be well on your way to an accurate forecast that helps you make smart choices for your business.
Happy forecasting!
ella
Sales Sidekick
esellas