Use Your Organization’s Data to More Accurately Predict Sales

If your organization uses Salesforce.com to track all of your sales leads, contacts, and opportunities, then you’re probably familiar with its forecasting capabilities. As opportunities move through the sales cycle, the probability to close tends to increase. Here’s a chart showing typical winning probabilities for each stage. For example, every lead that comes into the CRM system starts with a 10% chance of ultimately turning into a sale in the “Prospecting” or “Qualification” stage.


Typical Sales Stage Forecast Probabilities

However, this system seems oddly similar to licking your finger and tossing it up in the air to estimate wind speed. A VP of Sales may be confident in saying (especially at a smaller organization) that approximately 90% of opportunities that get to the Negotiation stage close successfully. Since every company and product is different though, why not leverage the data you have and empirically derive these probabilities?

In most cases, there’s a simple setting your Salesforce administrator needs to enable. Point your administrator to this URL and ask them to turn on *Opportunity Field History* tracking. The important piece consists of tracking Stage History.

Definition of Stage History from Salesforce.com:

Any time a user changes the Amount, Probability, Stage, or Close Date fields, a new entry is added to the Stage History related list. All entries include details of the change and who made it.

If this setting is already enabled at your organization, then insights can be identified from data sitting in your Salesforce database. We worked with a client that had a specific Opportunity stage set to a 60% closed won rate. Turns out, after reviewing the history, only 30% of Opportunities at that stage ended up converting to a sale. By updating that probability in the system, the Finance department now has a much more accurate sales forecast.

If you would like additional guidance, TCB Analytics can help you with updating your sales forecasting probabilities. Don’t rely on your gut alone – couple your instincts with the data available to you within your organization.

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