Sales forecasting allows sales managers to identify potential issues with deals while there's still time to prevent or reduce them.
Sales forecasting plays an important role in the success of any company. Sales forecasts that provide reliable information give managers and team members the power to make informed decisions when setting goals, prospecting, budgeting, and other revenue-impacting factors.
As a founder or sales manager, you can also use the HubSpot forecast tool to keep track of your sales team's progress towards their goals.
HubSpot’s sales forecasting tool is a powerful tool when you take the time to implement it properly.
HubSpot's forecasting tool uses Deal Stages to forecast revenue that is likely to close. When forecast categories are set up, deals can then be grouped into categories which make it easy for you and your team to adjust your revenue forecast. The changes are based on the knowledge of the deals (not your intuition), without losing track of where you are in your sales process.
Read on to learn more in this comprehensive guide to creating a trustworthy sales forecast to improve sales.
What is Sales Forecasting?
Sales Forecasting is the study and analysis of past data and current activities to predict future sales, expenditures, profits, and losses. It also allows you to find relationships, trends, and patterns in past sales.
Sales forecasting eliminates the dependence on following your gut instincts, taking the guesswork out of the process by providing solid data to follow.
Consider the weather forecast, we check it every day to know whether we should grab an umbrella on the way to work. It’s the difference between getting rained on or not. And in business, an accurate and in-depth sales forecast can be the difference between meeting customer demand, increasing revenue, or falling short of meeting customer expectations because we don’t have the important forecast data in hand.
Why Sales Forecasting Is Important for Revenue Operations
Sales forecasting allows you to identify potential issues while there's still time to prevent or reduce them. As an example, you may notice your team is trending 35% below quota. But the good news is that with data from sales forecasting you can figure out what's going on and change direction as needed. Discovering these problems now — versus at the end of the month or quarter — has a huge impact on the bottom line.
Sales forecasting helps managers and sales teams in the following ways:
- Forecasting allows a company to be proactive rather than reactive, which is a critical competitive advantage.
- It also assists a company in setting measurable goals.
- Provides effective cash flow management.
- Allows team members to make informed data-backed business decisions.
- In uncertain times like these, it can anticipate changes both internally and in the market.
- Keeps an eye on the health of your sales pipeline and eliminates potential deal stumbling blocks.
- Increases overall business performance by identifying areas for improvement.
- Integrates salary, awards, and recognition with data-driven decision-making for improvement in employee performance.
Note: An important point to remember about sales forecasts is they don't need to be perfect to be valuable. Your sales forecast will, most likely, be slightly different from your results.
There are various forecasting tools available on the market. However, in this article, we will be covering a step-by-step guide on how to use HubSpot for forecasting and how to power up your predictions with deeper insights using EBSTA - a revenue intelligence/forecasting software.
HOW TO USE HUBSPOT FOR FORECASTING
A sales forecast in HubSpot starts with creating sales goals for your team and setting the probability in Deal Stages.
How to Create Sales Goals for Your Team in HubSpot
- Navigate to your HubSpot account and click on the Settings icon.
- Select Tracking & Analytics in this left-hand pane, then select Goals from the dropdown menu
- Click on the dropdown menu in the right pane for a list of Types of Goals and select a goal from the dropdown - in this use case, we will choose Revenue.
- Click on Create Goal in the top right corner.
- Enter a Name for Your Goal, select the Sales under Category and Revenue under Type, then click next on the bottom right corner of the page.
- On the next page, select Yes (Create forecasts for this goal and view in reporting); under Contributors, select Teams and choose the team you are setting the goal for under the dropdown list. Next, select the year under the Year dropdown list. In this case, the forecast is for 2022, and select the appropriate pipeline.
Note: You can select multiple pipelines under the Pipeline category
- Enter a target amount for each month of the year in the currency your HubSpot account is set to and click next.
- Select the notifications you will want to get sent to you regarding the performance of your goal. Finally, click Done.
We have now created a goal for our team and are ready for the next step.
Setting Probability on Deal Stages in HubSpot
HubSpot uses past data for forecasting. Follow the steps below to enter your Deal Stage probability percentages based on past performance:
- Head back to the navigation bar and click on the Settings icon, and in the left-hand pane, select Deals under the Objects dropdown list.
- In the right-hand pane, select the Pipeline tab and pick a pipeline; the ‘Sales Pipeline is set in this case. Then, enter the Deal Probability based on the previous performance of each deal stage.
Using the Forecast Tool in HubSpot
HubSpot forecasting gives you a high-level view of the sales goals we set up above. It is a vital way to monitor if sales team members are achieving their goals. It makes it easy to spot deals that need optimisation and reps that might need help reaching their goals.
Here is the process of setting up a sales forecast in HubSpot:
- On the navigation bar, click on the Settings icon.
- And in the left-hand pane under Data Management, select Forecast from the Objects dropdown list.
- Under the Setup tab, choose a Forecast deal amount; in this example, we select Weighted amount because our forecast will be based on the above deal probabilities.
- Switch the Pipelines tab and select the pipeline that will be used in the forecast
- Set the forecast period for the pipeline and select between Monthly or quarterly. For this example, we want to see a monthly forecast, so we picked monthly in the dropdown list.
- Tick the Automate forecast categories under the Forecast category mapping section and select the deal stages for each forecast category on the right. Hit Save.
- Head back to Forecast under the Sales tab on the navigation bar and wait for your forecast to be processed. You will be notified once your forecast is ready.
How to Improve Forecasting on HubSpot with Power-Up Tools
HubSpot is a great CRM tool with good forecasting capabilities, but it does have some limitations. That’s where revenue intelligence tools come in handy for more in-depth sales insights.
Every business has its sales north star metric. Revenue intelligence tools help guide a company to its north star by applying automation and an AI-powered approach to sales and product usage data collection and analysis, thus producing actionable insights.
HubSpot integrates with CRMs and other applications to gather real-time data across the entire revenue life cycle of sales, marketing, and support into a single source of truth. This accurate real-time data eliminates one of the most critical barriers to revenue growth - siloed data.
With just a few clicks you have data from every department in a single location, every touchpoint needed for accurate predictions, vital sale signals, data-driven revenue optimisation, and more all at your fingertips.
Predictable Sales Growth With Revenue Intelligence From EBSTA
In an industry with so many marketing hyperboles under the veil of analytics, machine learning, and AI – a tool like EBSTA, is a goldmine. This tool genuinely harnesses the power of these disciplines to deliver revenue intelligence that stands above the rest.
EBSTA software offers a plethora of functions and charts geared toward actionable insights, such as Forecast Insights, Relationship Scoring, Deal Scoring, a Pipeline Bubble Chart, and a Pipeline Flow Chart.
We will delve deeper into Relationship Scoring, Deal Scoring, and Pipeline Bubble Charts based on a HubSpot integration below.
This graph shows the trajectory of your sales pipeline over time. In addition, the opportunities in your sales pipeline to prioritise are also highlighted.
EBSTA automates the aggregation of employee sales-related activities (emails, calls, and meetings) logged in a CRM and weighs each activity based on recency, type, duration, direction, and reciprocity. It also produces an engagement score out of 100. 1 is the lowest number, and 100 is the highest.
Consequently, this gives sales managers a high-level overview of the CRM engagement levels. For instance, sorting deals based on the EBSTA engagement score will highlight deals that may require a certain kind of engagement to close.
The Deal Score takes a variety of factors into account when identifying the combinations of features that advanced a deal through the pipeline in either a positive or negative way. This includes engagement based on a regression analysis at the user level. This data provides actionable insight to advise the user of the necessary actions to advance the deal favorably.
Pipeline Bubble Chart
The Bubble Chart plots Engagement Score and the anticipated Close Date alongside a visual representation of all Deals in the pipeline as bubbles. The value of each deal is represented by the size of the bubble (i.e. the bigger the Bubble, the bigger the deal size).
For more information on how EBSTA can power up your HubSpot with actionable insights, check out this article: Understanding & Using Forecast Insights (HubSpot).
Sales forecasting requires statistical models that can be quite complex and beyond the scope of many people. In an increasingly data-driven world, finding tools such as HubSpot and EBSTA that remove those constraints while also delivering on the dividends that come with forecasting is a critical business advantage.
Increase revenue, set measurable goals, meet necessary sales targets, increase cashflow, improve employee performance and more when you implement sales forecasting tools from HubSpot and EBSTA.
Need assistance with forecasting in HubSpot or another CRM? RevOps Automated can assist. To begin optimising your revenue growth, schedule an exploratory call with a Revenue Operations Strategist
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