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Quick Tips for Success with Salesforce Opportunity Forecasting

If you’re in sales, you’re aware of Salesforce. Whatever your industry, Salesforce is a powerful customer relationship management system, or CRM used to track customers’ history and activity, and reps’ tasks and events. If you’re not using Salesforce, chances are your competitors are.

CRMs are commonly used in sales-oriented businesses because automating routine tasks and consolidating pertinent information gives businesses an edge. The free sales teams to focus on the important things, like generating leads, pursuing opportunities and closing sales, they give reps the power to structure sales strategies and offer management the information needed to make truly insightful decisions.

But Salesforce is much more than a CRM. It empowers sales businesses to create powerful forecasts of performance, known as opportunity forecasting.

Opportunity forecasting involves predicting the performance of your sales organization over a specific period. If you’re projecting how much business you’ll do over the next period, be it the month, quarter or year, you’re engaged in forecasting.

There are several common forecasting techniques:

Opportunity stage forecasting classifies each sales opportunity according to the stage it has reached on its journey towards closure. Depending on your industry, each sale might begin with a sales call, which might have a 20% probability of closing. At a later stage, say once you’ve submitted a quote, this opportunity may have an 85% chance of success. Once you have mapped this information, creating a forecast is a simple matter of multiplying the amount you will gain from the sale (for example $500) by its probability of success (say 20%) within a specific period of time (such as by the end of the quarter). In this case, the forecasted amount of the opportunity is $100.

Opportunity stage forecasting is a simple way to project a business’ likely performance over any period. On the downside, the many variables impacting your sales are not included in the formula. The probability of closure allocated to any stage may be assigned based on gut feeling, rather than evidence, and if you have a short sales period your forecast may not take into account opportunities that enter your sales pipeline after the period begins, or close after it ends.

Category forecasting is a more responsive method that focuses on the perceptions of your personal, rather than the stage each opportunity has reached. Under this model, managers and sales reps will list opportunities according to their chance of closure within the sales period, using categories such as “best case” (signifying an opportunity will close if external factors fall into place) and “commit” (for opportunities they feel confident in closing). Category forecasting offers sales managers and CEOs a more nuanced insight into each sales period, with a worst-case scenario presented when looking at just the opportunities listed under “commit”, and a best-case scenario including “best case” opportunities as well.

Advanced predictive forecasting allows businesses to take account of customizable data to create sophisticated sales forecasts. Comparing the length of your sales cycle against the age of each opportunity and taking account of individual reps’ rates of success, advanced predictive forecasting gives management a contextualized view of the probability of an opportunity closing, in present and subsequent sales cycles. Algorithms are employed in this method to deliver finely-tuned forecasts and, because it is highly complex, sales businesses engaging in advanced predictive forecasting utilize performs like Salesforce to do the math for them.

Whatever your method, opportunity forecasting utilizes the onsite knowledge of sales staff to keep sales managers informed with real-time updates. In turn, upper managers conversant with high-quality, up-to-date information are advantaged in accelerating productivity, responding quickly to developing situations and making perceptive decisions.

Of course, every business, industry, and region is different, and you’ll need to add your own insights to your forecasting model. Because Salesforce is highly customizable, it gives you the chance to structure your opportunity forecasting to meet the unique needs of your business.

These quick tips will help you get the most out of opportunity forecasting for your business.

1. Customize your forecasting. Opportunity forecasting is at its best when it is finely tuned. Salesforce offers custom forecast reporting, which is designed to include as much or as little information as a business needs. Using a custom forecast report, you can include information about the opportunities impacting your business in any period, in as much detail as you require–no matter your role in the team. Customized opportunity forecasting allows you to view information by opportunity owner, team or territory, generating a simple summary or incorporating the history of previous forecasts into your current period’s report.

2. Analyze trends. With forecasting adapted to the needs of your business, forecast data is much more than merely informative. Reps, sales and upper managers who successfully use opportunity forecasting actively analyze sales trends, capturing win/loss ratios, sales activities and opportunities in the pipeline, so that strategizing becomes truly informed and responsive.

3. Share your forecasts. Opportunity forecasting offers teams across the sales industry the chance to collaborate in identifying weaknesses and capitalizing on openings. By tailoring forecast reporting to highlight points of relevance to all staff–from sales reps and managers to CEOs–you can ensure your business fully exploits the knowledge you gain from opportunity forecasting.

4. Adjust your forecasting. A great forecasting model is always a work in progress. With sophisticated forecasting frameworks, you can assess the accuracy of previous periods’ forecasts, adjusting your future data collection and analysis whenever needed.

Whether you’d like to track individual reps’ performance or generate sophisticated forecasts for the most complex sales structures, opportunity forecasting puts you ahead of the game. Use it wisely, and you’ll stay there.