Many companies base sales forecasts on their sales pipeline numbers (usually measured by open quote dollars). But this metric isn’t ideal for forecasting sales, for at least three reasons.
Why the pipeline metric is impractical for sales forecasting
- The pipeline numbers themselves are often incorrect. Many companies lack a functional CRM system to track the quotes that have been sent from all reps at all branches, meaning that some quotes may be missed and some others may be duplicates. Even companies with a CRM system in place may have inaccurate pipeline numbers if reps aren’t consistently using the system.
- They don’t always correlate with future sales. While pipeline numbers may look rosy when taken collectively over time, they often fail to take into account outdated (read: probably dead) leads. And if leads aren’t properly qualified before quotes are sent, sales pipeline numbers will incorrectly include quotes sent out to leads who are just using your company as a “third quote,” with no intention of buying.
- They look backward, not forward. When you look at a collection of opened quotes over time – which is essentially what you’re doing when you measure your accumulated pipeline – you can’t see where your sales prospects have been trending month to month, making it difficult to assess the performance of your marketing and sales teams or to make accurate forecasts.
How CRM and the load input metric can help
A thoughtfully-built, well-implemented CRM system allows you to more effectively qualify leads before quotes are sent out and to avoid duplicates. It also lets you track the volume of new opportunities coming in each month, which we call the load input. Tracking load input allows you to set goals more realistically, and it helps your team to reach those goals by focusing on what matters; things that get measured get done.
Selltis CRM tracks what matters to you by allowing you to customize your workspace and forecast future sales by company, salesman, product and more based on input trends. Learn more about Selltis CRM’s analytics capabilities.