How To Set Up Salesforce for Better Sales Forecasts

Salesforce.com forecasting features are typically a pain to configure, use, and maintain. An industry of sorts has emerged to address some of Salesforce’s shortcomings.

At QFlow.ai, we run across many companies already using or considering a third-party solution.

Whether you use forecasting software or not, there is a better way for sales to contribute to the forecasting process. It’s one that is pretty easy for Rev Ops to set up. It’s flexible. It scales. It even works if you prefer to limit disruption to your sales team and don’t want to ask them to leave Salesforce.

Some background: This post is informed by our experience with forecasting and by key business considerations that emerged during our collaboration with a successful VC-backed company.

This company was around $10MM in ARR when they rolled their own forecasting solution in Salesforce.com. It was pretty slick. Today, they’re sitting around $200MM ARR. 2/3 of the way into their journey, they decided to add Clari to their sales stack. But they never stopped using their homegrown solution.

Intrigued that a company would shell out for forecasting software and maintain a homegrown solution, we held working sessions. These informed the design of QFlow.ai Sales Forecasting.

This post covers

How most B2B sales teams forecast
A superior approach to forecasting sales
Preparing Salesforce.com for more accurate sales forecasts
Phasing deployment for proper collaborative forecasting in Salesforce.com

How most teams forecast B2B sales

Most B2B sales team focus on tracking opportunity stage, amount, and some deal notes. A focus on tracking opportunity stage makes it possible to answer the question of where deals sit in your sales process.

This is not sufficient to formulate a forecast. As a result, sales managers end up relying on voice-overs given during weekly sales calls and 1:1s. These deal reviews yield information of varying usefulness, ranging from insightful commentary to the kind, but useless remark like “…my buyer is really a great guy.”

Sales managers then layer on their own assessment of the deals they can see in Salesforce and sum things up, maybe into a couple categories.

There are two serious problems with this:

Almost by definition, this process can only take place periodically.
This process only gives lip service - literally - to tracking the subjective.

In addition to a solid sales process and stage tracking, forecasting properly requires a less haphazard way to track a salesperson’s confidence in closing a deal successfully by the close date.

We are talking here about sales teams forecasting their performance in the short-term (i.e., "where will I land this quarter?"). Forecasting revenue more than 1-2 quarters out is a separate exercise altogether. It requires different tools and involvement from the broader business including marketing, CS, sales, and finance. That is a topic for another day.

A superior approach to forecasting sales

We have found that well-formulated forecasts are the result of a process that does at least six things:

Considers “how confident are you that it will close this quarter?”
Gets sales reps to commit
Gives managers a view into buyer’s intent
Allows for real-time reconciliation and history tracking
Ensures reps call their number prior to the weekly sales call
Allows sales managers to forecast based on both real-time opp data and timely rep forecasts

Software can’t fix bad data or broken processes. It can, however, facilitate some or all of the characteristics we want in a forecasting process.

Let’s begin to address these requirements by creating Forecast Buckets in Salesforce.com.

Preparing Salesforce.com for more accurate sales forecasts

Time required: 20 minutes

You might have heard of Forecast Categories in Salesforce.com. Salesforce Forecast Categories are tightly tied to an opportunity’s stage. This is bad for the following reason: Forecast Buckets (aka ‘categories’) should represent a salesperson’s confidence in closing a deal successfully by the close date — regardless of where the opportunity is in your selling process.

To do this the right way, you’ll need to set up de-coupled forecast buckets in Salesforce. This takes under 20 minutes.

To configure Salesforce.com forecast buckets properly

1) Create a custom field on the Salesforce Opportunity object called Forecast Bucket

Select Picklist
Enter values, with each value separated by a new line:
    Omitted
    Upside
    Expected
    Commit
    Won

👆🏽 The specific names that you choose for your Forecast Buckets aren't that important, but we recommend creating no more than 5 buckets and aligning your team on bucket definitions like these. We'll use these to roll our pipeline totals up into a forecast.

Use first value as default value
Make the field required
Click next and make sure that the field is visible to the profiles assigned to your sales people and managers.

Creating a custom forecast bucket field in Salesforce.com

2) Turn on Opportunity Field History Tracking

Navigate to Object Manager and select Opportunity
Select Fields & Relationships, then Set History Tracking
Check your new Forecast Bucket field and hit save

Turn on opportunity field history tracking for your new field

3) Create a field dependency between Stage and Forecast Bucket

While we want our new forecast bucket to operate mostly independently of stage, certain combinations of values don't make sense. For example, a rep shouldn't be allowed to mark a Closed Lost deal as Expected. So, we create a field dependency between Stage and our new Forecast Bucket field.

From Setup > Object Manager > Opportunity > Fields & Relationships, click Field Dependencies
Create a new dependency
Select Stage as the controlling field and Forecast Bucket as the dependent field

Create a new field dependency in Salesforce

Now we’ll configure the Field Dependency. Your included and excluded values will depend on the opportunity Stages your company uses, but the configuration in the next two images should get you started.

Mapping field dependency values on Salesforce

Opportunity field dependency mapping on Salesforce

Let's pause to take note of what's going on here. We want your sales team to give their best estimate of whether or not a deal will come in by the end of the quarter. You'll notice that we're giving them more latitude during the middle of our sales process and less latitude at the beginning and end. This is intuitive. For example, if only a meeting has been set, the opportunity should likely be omitted or fall into the 'Upside' bucket. Similarly, if a deal is Closed Lost or Closed Won, we generally know the outcome.

The most important thing that we are doing here is to de-couple the forecast bucket from the sales stage.

4) Migrate data and adjust layouts to include the new Forecast Bucket field

You may want to migrate data from your old Forecast Category field to your new Forecast Bucket field. We recommend doing this after-hours using a tool like dataloader.io.
Make sure your new Forecast Bucket field is visible / editable on the opportunity page layout.
Hide the standard Forecast Category (ForecastCategory) field from views to avoid confusion.

PRO TIP

One reader pointed out that while you can remove the old Forecast Category field from the page layout, you can't remove it from Field Level Visibility, so people can still erroneously report on it. His solution:

Go to Setup > Rename Tabs and Labels
Select Opportunity, then hit 'Next'
Rename the Forecast Category's Singular label to include the words "(deprecated - do not use)"

Make sure people don't use the old field in Salesforce.com reports

It probably makes sense to place the new Forecast Bucket field next to Stage, given their dependency. Ours sits here:

Adding a field to opportunity layout on Salesforce.com

5) Launch your new Forecast Buckets and (optional) set up QFlow.ai

Your next step is to get your sales team to start bucketing opportunities. Your new process has advantages. It is more likely to get salespeople to commit to a number and gives sales managers a systematic way to track subjective deal outlook. It underpins a scalable process where forecasts are accurate, well-formulated, and defensible.

Use the template shared below to communicate the rollout of your new Forecast Buckets. Make it your own.

Connecting your forecast data to a platform like QFlow.ai is optional, but addresses items 3-6 from our above list of what makes a superior forecasting process. It requires a QFlow.ai account with a QFlow for Sales subscription plan.

If you’re continuing with the technical setup, simply select the new Forecast Bucket field we created under the forecast configuration screen on QFlow.ai (login required).

Phasing deployment for proper collaborative forecasting in Salesforce.com

You’ll need to get buy-in from your sales managers and train your sales reps to use your new Forecast bucketing process. Getting buy-in is easier than you might expect, especially once folks learn what a third-party solution like QFlow can automate.

By connecting QFlow to Salesforce, you will address some of the more gnarly aspects of in-quarter sales forecasting. This includes:

intuitive opportunity roll ups by sales rep, team, and manager, trended over time
the ability to track where reps say they’ll land for the quarter, trended over time
👆🏽comparisons of these two numbers trended against quota as the quarter progresses
reminders to sales to update SFDC and call their numbers before the weekly sales call starts
a structured way for reps to communicate successes and deal-blocking issues to the org

Submit a new sales forecast using Salesforce and QFlow

Salesforce pipeline and real-time opportunity roll up on QFlow

We typically recommend that companies take a cumulative crawl, walk, run approach to adopting a full-fledged forecasting process run by QFlow.ai.

Crawl

Your sales team uses Forecast Buckets in Salesforce.com
Revenue Operations, CRO, and VP Sales use QFlow.ai to track rep forecasts and opp roll ups

Walk

Your sales team uses QFlow.ai to submit timely forecasts, key deal commentary, and deal blockers
Warnings and reminders prevent stale forecasts and ensure an accurate forecast at all times.
History tracking enables sales managers to coach more effectively

Run

Forecasts are supplemented by a machine learning (ML) recipe
ML recipe is trained: behavioral, demographics, firmographics, and custom data
Predictive opp scores appear in SFDC and inform business forecasts in QFlow.ai

How to get free help with your forecasting process

We don’t do professional services, but we are happy to talk through your growth plans, forecasting process, and any feedback on this post.

Schedule a call with one of us by booking time on our calendar here.

Appendix: communicating new process to sales reps

At ACME Corp, we use an opportunity's Stage to track where a deal is in terms of our sales process. We use the Forecast Bucket field to track your confidence level that an opportunity will close successfully by the close date.

The night prior to each forecast call, your opportunities should be updated and placed into a Forecast Bucket.

Those forecast buckets are:

Forecast Bucket	Description
Commit	These opportunities are progressing according to plan and our sales process. You are confident that the deal will close by the close date, barring a major unforeseen obstacle.
Expected	It is probable that these opportunities will progress enough to close successfully by the close date, though there is work to be done.
Upside	These opportunities require quite a bit of work to pull in by the close date, but they are nonetheless qualified and there is a close plan.
Omitted	These opportunities have not yet been qualified or have been lost.
Won	These opportunities are Closed Won.

2023-09-21

QFlow.ai blog