6 steps to better forecast accuracy
Revenue forecasting is often akin to looking into a crystal ball. It's the art and science of predicting the future, a task that can be as daunting as it is crucial. Accurate sales forecasting can mean the difference between thriving and merely surviving in today's competitive landscape.
But traditional forecasting methods often leave much to be desired. They rely heavily on judgment, lack the robustness of data-driven approaches, and can fall short in predicting the twists and turns of a dynamic marketplace. So, what if there was a way to take forecasting to the next level? Enter Superforecasting.
The power of forecasting
Step 1: Reinvent Traditional Forecasting Methods
Traditional forecasting methods have their merits, but they often miss the mark when it comes to precision. Why? They usually lean too heavily on judgment or data, lacking the balance between the two. Superforecasting, on the other hand, takes the best of both worlds and combines them into a formidable approach.
Step 2: Recognize the Forecasting Visibility Gap
Imagine this scenario: It's the beginning of a new quarter, and you have deals in the Commit stage, Best Case, and various stages of your sales pipeline. You need to bridge the gap between your Commit pot and the actual numbers you're aiming for, but without insight into in-quarter activities, it feels like navigating in the dark.
Superforecasting doesn't just acknowledge this gap; it illuminates it. It provides you with data-backed building blocks, enhancing your judgment and real-time understanding. It's like having a flashlight in the dark.
Step 3: Embrace Superforecasting
Superforecasting isn't just a methodology; it's a mindset shift. It views uncertainty not as a barrier but as a challenge to overcome. It's about breaking down complex problems into manageable parts, applying your insight, and continually refining your forecasts.
Step 4: Gather Data and Building Blocks
Superforecasting starts with your CRM data. It utilizes six key building blocks:
- Pipeline Win Rate %
- Best Case Win Rate %
- Commit Win Rate %
- Closed Won to date
- Avg. $ created & closed
- Avg. $ pulled-in & closed
Step 5: Apply Data-Driven Judgment
This step is crucial. It's where you guide your superforecaster through a data-driven judgment process. You start with Closed Won and then apply judgment to Commit Win Rate, Best Case Win Rate, Pipeline Win Rate, Average created and closed, and Average pulled-In. Each decision is based on real data and real insight.
Step 6: Submit Confidently
After carefully building your superforecast with data-driven judgment, you're ready to submit it to the business. But it's not just about the numbers; it's about the story behind those numbers. Each decision is accompanied by judgment explanations, creating a comprehensive forecast that the entire organization can rely on.
Get Started with Superforecasting
Ready to embark on your journey to precision forecasting? We've created two resources to help you master Superforecasting:
Remember, accurate predictions lead to better decisions, and better decisions lead to success. Unlock the power of Superforecasting today and pave the way for a future of precise sales forecasting.
