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Sales forecasts example: the best techniques and how to apply them!

Ulysse Wolff
May 28, 2024
Remote Works

What is a sales forecast ?

Sales forecast : definition

A sales forecast is a projection of your company’s future sales revenue. Having an accurate idea of your future revenue and growth is crucial to plan your activity.

Sales forecasts are essential for many reasons. Let’s see them in the following section.

What are sales forecasts used for ?

You must know that but having accurate sales forecasts is key for :

  • Resource Management : Having an idea of your future activity helps you adjust your resources, especially staff, raw materials and inventory.
  • Operational Planning : According to the nature of your activity, a clear sales forecast can help you organize your operations (production for instance) to meet forecasted demand.
  • Financial Planning : Sales forecasts give you visibility and help you plan the financial side of your activity (budgeting, cash flow management…)
  • Strategy Definition : Having a view on your activity allows you to adjust your strategy and make appropriate decisions such as market expansion, launching new products, or entering new markets.
  • Setting Targets: Forecasting your activity helps you set realistic targets for sales teams.

The main sales forecasts techniques

Having sales forecasts is essential, but how to do it ? Let’s explore different ways to do it:

Historical data

Forecasting your sales out of nothing would be a hard task. That’s why using historical data is a relevant solution ! 

The most classical way to operate is to take last year’s sales revenue and to apply a growth rate (you can take the average growth rate you had since creation for instance). 

The main drawback of this method is that you could forget key factors : structural changes in your company, evolutions on the market… That’s why you should feel free to take as many parameters as you can into account to have the most accurate forecast !

Globally, this method is strong but needs reliable data to be used.

Sales team sentiment

The sales team is the team that is the closest to the clients. They know the product, how the clients perceive it (and if this perception has changed), how the market evolves… That’s why asking about the sales team’s opinion could be a good way to have an idea of future sales revenue.

Asking the sales team should not be your only sales forecasting method though as It’s not accurate enough and salespeople tend to overestimate the future sales.

Pipeline forecasting

Pipeline forecasting is a very accurate method of forecasting, especially for the short term. You basically take all the deals in the pipeline, no matter which stage they’re in, and you estimate the probability of closing the deal. Then, you multiply each figure obtained by the value of the deal, which will give you an estimate of your future revenue.

This method, like using historical data, will get you good results but needs reliable data to work well.

Using an advanced model

Using an advanced model is the best way to make sales forecasts. Usually, the analysis will be conducted by a dedicated software, a CRM for instance.

If you have the right tool and your data is correctly entered into it, then you should be able to have an accurate forecast of your future sales, as the software will be using a complex combination of factors to predict your future revenue.

3 actual sales forecasts examples !

Now that you know the techniques you can use, let’s illustrate them with concrete examples to make them clearer !

Using historical data

To make sales forecasts using historical data (assuming you don’t have a CRM or other advanced tool), the best is to use Excel.

Here is a very simple example of how your forecast could look like :

In this example, you forecast next month’s revenue using the average growth rate of the last 3 months. The formulas are very simple: you use a first formula in the second row to calculate the growth rate between each month, and in the last cell (corresponding to the expected growth rate), you take the average of the 3 previous months.

You could calculate the expected growth rate differently, by taking the average growth rate over a longer period of time or the median for instance. You could also add other rows corresponding to other parameters you would like to take into account (number of recurring clients, size of the sales team etc…)

Using your sales pipeline

If you don’t have a specific tool, you could proceed similarly to forecast your sales using your sales pipeline.

Here is a simplified example of how it could look like :

To build such a table, you first need to have an idea of your pipeline. The best is to have a specific tool but you can simply use a Google Sheet document updated by the sales team in real time. This document should contain information about the stage of the deal and the value associated (what would be your revenue if the deal was closed).

To assign probabilities you can use 2 methods: 

  • Standardized method: Here, you’ll assign standardized closing probabilities (for instance based on your historical success rate) for each stage of a deal. For instance, you can say that your sales team has a 20% probability of closing a given deal at the first call stage.
  • Personalized method: Here, the closing probability will be personalized for each deal, based on the stage of the deal, the client, the sales representative etc… It’s more accurate but requires more time.

Finally, when you have this information, you just need to multiply each deal value by the probability of it being closed, then to sum all the values found, to get your forecasted short-term sales.

Using a specific tool

Using a CRM can help you make very accurate forecasts. Using AI, CRM are now able to collect valuable information on your clients. Some CRMs are equipped with Lead Scoring capabilities for instance. They automatically score your leads and help you forecast your sales more effectively.

In my opinion, using these tools is better than using your feelings. Even if you want to forecast your sales manually, you’ll get a clear vision of your pipeline, an accurate evaluation of the leads and of the closing probability. Everything will be easier !

But actually, you won’t need to do it manually. CRMs use advanced machine learning algorithms to project your future sales revenue. They use the data you would use, but also other complex factors to estimate sales better than a human !

If you want proper sales forecasts, you should use a CRM or a similar tool. And if you want to increase your sales and your revenue, you should use Claap. Here is why.

How Claap helps you increase sales 

Claap is an audio and video transcription tool, but also a meeting recording tool. It’s the perfect tool to use with a CRM to boost your sales !

Claap increases your conversion rate with a new way of communicating

Claap is an asynchronous meeting tool. By clicking on a button, you can start recording your screen while having your camera on. Pretty useful to demonstrate something ! It’s even so useful that it can replace your traditional 30-minute meetings !

We call that a claap: a 2 to 5-minute video in which the information is synthesized and saves your time and your prospect’s. It can be sent by mail, embedded on a website (anywhere actually) or directly consulted on your Claap’s workspaces. It has an amazing impact on your conversion rate as your prospect will actually watch it (instead of just deleting your email) and it’s personalized ! If you find it hard to believe, just look at Guillaume De Nacquard’s testimonial (from Surfe, one of our clients):

“Every time I was doing that I had like 40% conversion rates compared to like 3, 4, or 5% with normal approaches.” 

Claap increases your closing rate by improving your client relationship

Remember the Excel table where I mentioned closing probabilities to estimate your future sales ? If you want to boost these probabilities, you need Claap !

With Claap you don’t need to take notes anymore during your meetings. It means you can concentrate on your client during the meeting, be more engaged and then improve the client relationship ! 

After the meeting, you can write the best follow-up email using the summary generated by Claap. It makes a good impression and improves your chances of closing the deal !

Claap increases your number of clients as it shortens your sales cycle

As you communicate with claaps, you’re able to significantly reduce the length of each step of the sales cycle. Without Claap, you need to find a slot that fits your agenda and your prospect’s and then take 30 mn to 1 hour for the meeting. With Claap, you record your claap, and your prospect can watch it whenever he/she wants. You save 1 or 2 weeks at each step of the sales cycle !

Alejandro Salinas, from Surfe can attest to it:

"I've managed to shorten my sales cycle because I replace 30-minute meetings with prospects with three five-minute videos. I've literally seen ten days just fall off of that process and allow me to go quicker. " 

Sales forecasts are essential for your company. But if you want to be satisfied with your forecast, you need Claap. It will change the working methods of your sales team and supercharge their productivity and results. Not convinced yet? Try Claap’s features for free and you’ll see by yourself (14 days free trial). Start now, and see the difference (Free plan with no credit card required) !

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