You can’t escape it. Forecasting is a must for any sales organization. When projecting 2021 revenue growth, you need to ensure your sales team’s forecast is accurate to ensure the company is budgeting properly.
No pressure, right? We get it. That’s why we put together a few tips to help you with your annual forecasting.
What is forecasting?
At its most basic level, forecasting is predicting the revenue your organization will earn over a quarter/period/year. The forecast will inform critical business decisions in the coming year. For example, a forecast will account for seasonality within the sales. This way, leadership can plan for expected lulls in revenue and make more informed financial decisions throughout the period.
3 Tips to Improve Sales Forecasting Accuracy
- Use historical data. Many organizations find that revenue may increase or decrease on a cyclical basis. For example, a SaaS company knows to plan for a decrease in sales at the end of the year due to the holiday slow down. Knowing this can help them prepare for those lulls in revenue by redirecting their sales team to increase engagement with key accounts and prospects during the first three quarters of the year.
- Improve visibility into key accounts. Anyone can throw a number out there based on past sales and hope it sticks. The most successful sales leaders take it a step further. Their sales forecast is far more accurate because they have a deeper level of visibility into key accounts and more importantly key deals. Understanding the objectives your largest accounts are seeking to achieve, you can work with them as a partner to build a compelling business case that will help them achieve their goals. Revenue growth for them, revenue growth for you, and better visibility for management.
- Organization and repeatability. No matter how many accounts your sales organization is working with, having a repeatable, collaborative process helps you quickly see where your team is winning and where you need to drop in and provide coaching. You can also more quickly weed out the opportunities that are wasting your sales reps’ time. A predictable, scalable sales planning process is a must-have for achieving predictable revenue growth and forecasting.
Strategic Sales Planning for 2021
Sales forecasting is just the tip of the iceberg for your 2021 sales plan. Ensuring you have the right tools, talent, and methodologies is essential for maximizing revenue throughout the year. An overarching strategy for achieving your sales goals requires research and the ability to position yourself as a partner within your key accounts and opportunities. With the right plan, you can see the way to win in 2021.
“The people element is still crucial, especially in complex enterprise deals. Sales forecasting is the combination of the people, processes, and technologies that enable the agility and resiliency required for success in an ever-changing market.”