Managing pipeline and forecasting is an essential operation of any organization as it provides the foundations for closing and predicting sales. But, doing so can be unnecessarily tricky when there is no clear distinction between the two operations. How do you separate pipeline and forecasting? Or simply put, “how do you tell them apart?”. To clarify this, let’s take a look at each individually and then discuss how they complement one another.
A sales pipeline is effectively a sales management tool used to portray and track multiple potential buyers as they move through different stages of the purchasing process. It illustrates where prospects are in their journey from lead to customer.
Pipeline management is simply about building a healthy pipeline and subsequently winning more deals. Essentially, you’re aiming to manage the journey from prospect to customer. From identifying potential buyers, dividing potential deals into daily activities for sales reps and refining and updating the pipeline, your organisation can develop a sustainable healthy process for closing more deals.
Sales forecasting is the process of estimating future revenue by projecting the amount of sales you will make in a given timeframe. This projection is influenced by a variety of factors such as current and past trends, changes in internal and external environment, competition and your business plans.
Forecast management involves a systematic approach to monitoring the above factors in order to act quickly and make informed decisions about operations. A combination of quantitative information such as sales trends and past sales alongside qualitative information like changes in trade laws and government regulations often provide the most accurate sales forecasts.
How they work together
Now that we’ve covered the disparities between pipeline and forecasting, it’s important to note how they synergise to maximise business profits.
Pipeline focuses on all of your opportunities and the individual tasks required to move them along the purchasing process into eventual sales whereas forecasting focuses on a small segment of this pipeline, looking into the future to accurately predict and prepare. But, without ever successfully managing the opportunities through the multi-step sales cycle it is near impossible to successfully estimate and forecast future revenues. The understanding and successful development of a healthy pipeline is key in achieving accurate forecasting as it’s the management and delivery of these pipeline operations which allows an organisation to have any sales to forecast. On the flip side, an accurate estimation of revenue and sales also provides essential information for developing a strong pipeline as you can prepare adequately.
It can be argued which is more important than the other, but what is not up for debate is that without one, the other cannot function to its full potential.
How Salesforce can help
Whether it’s the customisation of specific tools, reports and alerts in your pipeline development or the comprehensive overview and real time tracking of sales performance for forecast management, Salesforce can be an invaluable platform to maximise the effectiveness of these operations.
1. Salesforce for Pipeline
With quick filters and out-of-the-box KPIs, Salesforce allows you to focus on your most promising deals to enhance the number of sales you close. Real time changes in customer data allows you to convert 1 on 1 status updates into team coaching sessions whilst your reps can also be guided on which deals to prioritise through the help of AI.
2. Salesforce for Forecasting
Salesforce allows you to maintain a comprehensive overview of operations with real time visibility into forecasts so that you can make instant, responsive changes when necessary. You can develop accurate, tailored forecasts based on your specific KPIs with the flexibility to make real time adjustments to keep up with changes in the sales process.
Sales forecast and pipeline management are essential operations in developing a successful sales process. They are unique topics that require individual attention to understand the difference between them in order for them to work in conjunction with one another.
Salesforce provides the perfect platform to enhance these operations whilst Ignyto’s expertise can ensure that they are working to their highest potential to help maximise your sales revenue.