Hot take: sales forecasting is going the way of the dinosaur. In fact, it might already be there.
Now, to be clear, we’re not saying it’s a bad idea to proactively anticipate future revenues, costs, opportunities, and pipeline — far from it! But the way forecasting has traditionally been done no longer makes sense in light of today’s technological advances.
Art Harding, People.ai’s Chief Operating Officer, predicts that 2022 will mark the point where sales teams finally put bygone forecasting methods out to pasture: “The idea that we ever intentionally procrastinated to determine our forecasts weekly will seem laughable.”
Automation enables teams to gain this visibility accurately, immediately, and perpetually…without doing the actual work of forecasting. Let’s explore how this works, and why it’s a game-changer.
How Forecasting Works Now: The Art of the Educated Guess
Let’s face it: no matter how good you are at it, or how well-educated your guesses are, forecasting is essentially just that—an educated guess. It happens in a typical series of steps:
- Your team pulls together all the best data they can find to help make the guess—how many deals you’ve closed historically, your price per transaction, performance year over year, etc.
- They combine all this with the more current and intangible info like how many sales you have in your pipeline right now, how likely each of those sales is to close, how near they are to closing, how much revenue they should generate, and all that good stuff.
- Sometimes, your team might get really nebulous with it and calibrate their forecasts based on how their sales rep is feeling about the prospect, or how they tend to perform with the prospect.
Finally, all of this comes together in the form of a forecasting report that predicts what the numbers are going to look like for the next X period of time, and provides some direction on team priorities.
Basically, while forecasting is a legitimate, tried-and-true process that strong sales teams tend to get very, very good at, it’s more of an art than a science. And it’s an art that tends to take an annoyingly long time to do right. That doesn’t have to be the case anymore.
How to Forecast Sales without Forecasting: The Automated Way
AI and automation are built to augment and enhance human sales activities, not replace them. This is a perfect example. The kind of automation that helps with forecasting is relatively simple: it plugs into your existing CRM, organizes your existing data, and populates smart forecasts automatically using your existing process.
The automated forecasting process even follows the same steps we outlined above, just faster and with a little more accuracy:
- Your automation CRM tools always have access to all of your current and historical sales data, reorganizing it according to the most helpful parameters for the particular forecast, and populating it instantaneously.
- These tools integrate with CRM tracking and measurement tools to understand how many deals are open and/or pending and exactly where each of those deals are in the pipeline. People.ai’s tools can even measure deal risk using opportunity scores.
- Using this set of tools, your automation forecasts the full range of how much revenue you stand to bring in according to every eventuality, and can even recommend next steps and potential next-quarter deals based on historical performance and uncovered opportunities.
Sounds an awful lot like the act of forecasting, right? So why do we say “forecasting is out”? Because you didn’t do any of that. In fact, we only broke the process down into steps to show the parallels. Truthfully, your automation tools didn’t “do” that, at least in present tense. They “did” it when you installed them, and they keep doing it constantly.
With automation, you don’t need to run forecasting. You just …have forecasting — all the time, for your sales team to look at whenever it’s needed. Instead of taking the time to constantly re-evaluate the numbers in weekly forecasts, you can look at an up-to-date forecast anytime, and make decisions based on it immediately.
As use cases like these illustrate, automation is not here to supplant sales reps or transform your work into something unrecognizable. Instead, processes like these make your job that much easier, so you can spend more time building relationships and putting your skills to good use.
Want to know more about how to forecast sales in the era of automation? We’d love to tell you all about it! Reach out any time or, if you want to try it out for yourself right away, schedule a hands-on demo, our treat!