5 Proven Sales Forecasting Methods to Predict Your Revenue

Companies and firms sometimes appear to be so captivated with the rat race of closing deals and increasing revenue that they have overlooked sales forecasting. Instead, businesses still rely on their gut instinct to close deals. This can make or break their business.


A little false intuition can cause a tidal wave in your sales to funnel. As a result, you must forecast your sales and plan for the future to have an inherent advantage over the competition.


If you want to forecast your sales but aren’t sure where to begin, our guide will show you the five methods. So, without further ado, let’s take a look at how your company can capitalize on these proven and effective sales forecasting methods:


1. Length of sales cycle forecasting


When it comes to forecasting sales, time and duration are crucial. But wouldn’t it be great to know your typical sales cycle? For example, when is your lead likely to close the deal? Analyzing your sales cycle sheds light on when a deal can be closed. Likewise, knowing when your deals are most likely to be set can help determine your average sales cycle.


Let’s assume your company’s average sales cycle is four months, and your sales representative has been working on it for two months. Then you can estimate that your rep has a 50% chance of closing the deal.


2. Lead-driven forecasting

You may have heard that knowing your customers can help you get to the final stage of your sales process. This also applies to the lead-driven forecasting method. 


In this approach, you must first examine your leads from all angles and segment them into different branches. How will you do that? By looking at what your previous leads have done. Assigning a specific value to each one of your leads can show you when your customers are most likely to turn into buyers.


3. Opportunity stage forecasting


In this approach, you calculate the chances of closing a deal based on where a prospect is in your pipeline. You can divide your pipeline into small segments and consider each a separate phase. You can incorporate various stages into your pipelines, such as initial call, qualified, product demo, trial, final call, and the deal closed.


Click here to learn how to ensure that your leads are well-qualified! 

You can structure your pipeline, as shown in the diagram above. The lower the prospect’s position in the pipeline, the more likely you are to close the deal.


4. Test marketing analysis forecasting


Test marketing is often used as a sales forecasting technique. It involves testing a product in a limited market before rolling it out to a larger market. This allows firms to assess customer reactions and make necessary adjustments before introducing the product to a broader audience. 


For instance, if you roll out your product in a specific area or to a bunch of people based on market segmentation, you can examine the market response.

 How well are your new products being received by your customers? Is it likely to trend in your current market landscape? Can it entice your customer’s interest? Is it capable of upscaling your revenue? And track all its performance to predict the actual release accurately.


5. Multivariable analysis forecasting


When you combine all of the factors, such as the length of your sales cycle, the performance of your sales representatives, analyzing your previous sales results, opportunity stage probability, and many others, you will ultimately have a firm grip on estimating your sales accurately. As a result, you can finally generate the results you desire.


You can add more value to your sales prediction process by keeping track of your previous sales results. This can also make your way out to an accurate sales estimation. The forecasting methods discussed above can tell you the next best suitable steps you can take for your inside sales management and make your job much more effortless.


Implementing these techniques can assist you in shaping your sales goals in the right direction. These practices also provide you with a clear picture of what may occur in the market, allowing you to be ready to seize any exciting opportunity or overcome any obstacle that may erode your sales pipeline. As a result, you will always be safe and confident with your sales strategy, leading to significant revenue for your company.


Related articles

Generate Sales Meetings that Close

Simple to set up. Easy to use

Scroll to Top