Forecasting and pipeline management are two terms that are sometimes thrown around interchangeably. But they’re two distinct disciplines – and a high performing sales organization needs both.
A Definition of Pipeline Management
Pipeline management can be described as: “the management and assessment of all sales opportunities as they progress through a multi-step sales cycle to a successful close.”
Actively managing a sales pipeline means understanding what’s in queue and strategizing on how to move deals to the next step in the process.
To be effective at pipeline management, you need a defined sales process – and ideally a CRM with reports and dashboards that give you a clear picture of what’s in the funnel. Data like average deal size, time to close, and close ratio can help reps plan proactively to ensure a steady flow of new business.
A Definition of Sales Forecasting
Forecasting is related to pipeline management, but it’s a distinct practice defined as “The act of predicting business activity for a future period of time. Typically, it is a projection based upon specific assumptions, such as targeted prospects or a defined sales strategy.”
Forecasting requires reps (and/or various levels of management) to predict what will close, either by assigning weighted percentages, categorizing deals, or committing to a total sales number for the period.
Production-driven and resource-constrained organizations (like manufacturing or consulting, for example) often tend to invest more time and effort in forecasting than companies in other industries, because the forecast dictates hiring and material needs for the immediate future. Other businesses that may especially benefit from forecasting are those with long deal cycles, repeat purchases, or the need to report on shipments and orders at a detailed level.
Tools in Salesforce to Get the Job Done
Pipeline Management is Salesforce’s bread and butter – there’s no CRM that has them beat. Functionality in Sales Cloud that helps reps improve pipeline management includes things like:
- Reports & dashboards (sales funnel, leaderboards, etc.)
- Big deal alerts
- Sales Path
- Similar Opportunities
If you want to do forecasting in Salesforce, that gets a little trickier. There are two versions of forecasting tools in Sales Cloud: 1) Customizable Forecasting, and 2) Collaborative Forecasting.
You can’t use them both – you have to pick one or the other. Each has some features and limitations that the other doesn’t, so consider this carefully when evaluating which to use.
Taking Forecasting to the Next Level
If your process can fit one of the two out-of-the-box Salesforce options, great – but this isn’t usually the case. In our experience, most organizations with a disciplined approach to forecasting run into limitations in the system and many end up managing it in Excel.
But there’s a better way! Beyond the native functionality in Salesforce, we’ve worked with several organizations to build custom, flexible forecasting apps to fit their unique process.
Have a goal or use case in mind? Let us know – we’re always hungry for a challenge!