How can you easily get a sales forecast with CRM solutions? That’s supposed to be one of the primary reasons to get a CRM in the first place isn’t it?
Managing the sales pipeline and creating a reliable forecast of revenue is one of the most common reasons companies implement a CRM solution. But, just collecting the information in your CRM does not produce an accurate sales forecast.
If you’ve tried manage the sales pipeline and forecast revenue using a spreadsheet, then you already know why.
Sales People Expect Everything to Close Tomorrow
Your sales team in general will not be good at being realistic about the actual amount and timing of deals or the likelihood they’ll close either. Don’t blame the sales people! That’s why they’re good at what they do. Every person they meet seems like a potential customer. Let them continue in that delusion.
What’s missing is some process that helps them categorize sales opportunities in objective ways. Then your CRM system can calculate the actual sales forecast for you.
Here’ s a video on how to use the sales forecast in CRM from SalesNexus:
Process for Sales Forecasts with CRM:
Identify the Sales Pipeline Stages
What are the steps in your process? Here are some common steps…
- Identify the decision maker and influencers, confirm need and budget
- Present your Solution
- Proposal
- Negotiation
- Closing
- Verbal Agreement/Sending the Invoice/PO received
- Payment Received
Keep it as simple as you can. You may also want to avoid some of the admin work for the sales team by deciding that you only create sales pipeline entries when you send a proposal. In other words, you don’t want a sales pipeline entry for every lead that you talk to.
Assign a Percentage to each Stage
What is likelihood that opportunities at Stage 2 will actually close? How long does it typically take for opportunities to move from Stage 2 to Stage 3? If you’re not forecasting sales with your CRM now, it may be very difficult to answer these questions. You may have to use your best guess for starters. But, once you begin tracking sales opportunities, you will be able to measure these things.
As sales opportunities move from one stage to another, assign them a probability. Then the “expected amount” for each sales opportunity is the total quoted or proposal amount multiplied by the probability.
Then you just add up the expected amounts.
Simple right?! It really is. There is a bit of discipline require…
Sales management has to spend time with each sales person reviewing the pipeline and coaching them on keeping things up to date regularly, putting things in the correct stage and also run a forecast for each month, by sales person and then sit down and review the actual results in contrast to the forecast, at the end of the month. Over time, the sales team will get better at being realistic and you’ll be able to modify your process, stages and probabilities to get closer to the truth.
No matter how accurate your Expect Amount is at the beginning of the month or quarter, both the Expect Amount the Total Open Amount in your sales pipeline is a very powerful leading indicator of performance that helps you see problems coming and coach sales people for success.