Leveraging Technology to Improve Your Sales Forecast: Part 2

February 16, 2012

How can managing forecasts historically help you improve accuracy?

 

In my last post I wrote about some of the very basic concepts of sales forecasting. In that post, I covered some key components that should be incorporated into whatever forecasting application you use, which will allow you to manage your pipeline in real time and, ultimately, improve your forecast accuracy. Now that you understand the basics, the next step in improving your forecasting is to begin tracking it historically. Not surprisingly, there is technology that can help you do that too.

tracking sales forecasts historically

In addition to tracking deals in the forecast and pipeline in real-time, some applications also let you track forecast history. These types of applications are typically a bit more advanced and, needless to say, if you haven’t mastered the basics that I described in my last post, then you definitely don’t need this.

That being said, many of the applications that provide real-time sales opportunity tracking will also include a module for tracking forecasts over time. The difference between systems that track forecasts in real-time and systems that track forecasts historically is that the latter will track a forecast for each rep everytime they submit one, sometimes even including the deals in each forecast. Those applications also typically report what the actual achievement was, which lets you look at forecasts from previous periods and see how close you actually came.

For example, a forecast history report might look something like this:

mini historical sales forecast report

 

Ultimately, a report like the one above can be an excellent tool for tracking forecast accuracy over time and can also be instrumental in allowing you to continuously improve accuracy. It will also help you identify the reps who consistently miss the mark.

To sum things up, once you’re tracking your pipeline and forecasts in real-time, the next best practice is to leverage your system to track forecast accuracy historically, as demonstrated above. For expansion stage SaaS companies, that level of forecasting tends to be rare. But the ones that do it are far more accurate than the ones that don’t.

 

 

 

 

VP, Sales

Ori Yankelev is Vice President, Sales at <a href="https://www.ownbackup.com/">Own Backup</a>. He was previously a Sales and Marketing Associate for OpenView.