As businesses look to optimize their path to profitability, decision makers are faced with pressing questions such as:

  • What does my revenue forecast look like for the next month, quarter, and year?
  • Are we missing our revenue targets?
  • If yes, why are we missing our revenue targets?

If you are not able to find answers to these questions, there could be two reasons:

  1. You have not implemented a revenue forecasting practice in your sales and success functions, or
  2. You are relying on a manual, inefficient forecasting workflow using spreadsheets or a CRM tool

An accurate revenue forecast is arguably the most important number for your business. When done correctly, revenue forecasting can empower your sales and success teams with predictive insights, help them hit their revenue targets consistently, and boost revenue growth.

What is a revenue forecast?

The amount of available revenue pipeline (that’s both new revenue from sales and expansion revenue from customer success) that your sales and success teams think they can successfully close or ‘book’ as ‘realized revenue’ in any given month/quarter/year, is what is called the revenue forecast for that month, quarter, or year.

Your revenue forecasting is broken. Here’s why

Everyone understands that the revenue forecast is the most important number in any business. Yet business owners, founders, sales and success leaders struggle to come up with an accurate revenue forecast every single month.

Less than half (45%) of sales leaders say they are confident about the accuracy of their sales forecasts1.

Why is there such low confidence in the accuracy of revenue forecasts? The answer lies in the way most sales/success teams have built their forecasting workflows. Most sales/success managers use spreadsheets or a CRM to forecast revenue.

Let’s take a look at some of the biggest challenges sales/success teams face when using spreadsheets (or a CRM) to forecast revenue:

  1. At the beginning of a month, your sales and success reps submit a ‘guesstimate’ on how much revenue they think they can close
  2. As sales and success managers lack visibility into conversations and risk signals, they have no way to validate their team’s forecast estimates
  3. Your team’s estimates become your revenue forecast for the month. But your revenue forecast is based on estimates that are most likely to be inflated.
  4. Inflated forecasts set unrealistic revenue targets. At the end of the month, missed targets bring your team crashing down to reality.
  5. With no way of knowing why you missed your targets, your team is likely to repeat this every month

Entering data manually into a spreadsheet or a CRM is cumbersome, and is a drain on your team’s precious time and bandwidth. Your sales and success teams should be spending their time talking to prospects and customers, closing deals, and bringing in revenue. Not operating spreadsheets! But not only is your spreadsheets-based forecasting workflow manual and time-consuming, it is grossly inaccurate.

Here’s what we know so far:

  • Your sales and success teams need to be predictive about their revenue outcomes
  • Your CRM tool and/or spreadsheets lack the context of customer conversations and are not capable of flagging risks, and therefore
  • Your forecasting workflow based on spreadsheets and your CRM is inefficient and grossly inaccurate

Introducing the Avoma AI Forecasting Assistant

Now there is a better way to forecast revenue: By marrying AI-powered insights from your customer conversations with sales data from your CRM. Say hello to Avoma’s AI Forecasting Assistant!

Using the Avoma Forecasting Assistant, sales and success leaders will be able to validate their revenue forecasts with real-time data about the health of deals in their pipeline. Avoma’s AI-powered insights help them answer questions like ‘How did we arrive at this forecast?’, ‘Can we achieve this target?’, and ‘What are the risks or blockers in achieving this target?’. 

Once the forecast is set and the team is working towards achieving it, your sales and success leaders will be able to keep a close watch on their team’s revenue attainment. Avoma’s Forecasting dashboard helps sales and success leaders:

(i) Identify deals that need to be prioritized,
(ii) Spot deals that are at risk, and
(iii) Mitigate risks that could come in the way of achieving their revenue targets.

A spreadsheet or your CRM is not equipped to provide you such critical insights about deals in your pipeline. And that’s why we built the Avoma AI Forecasting Assistant - a single source of truth that lets you track your CRM data, revenue targets for multiple pipelines, and insights from customer conversations in real time.

Why you should run forecasting on Avoma

By connecting your CRM (HubSpot/SalesForce) to Avoma, you can see CRM data about deals in your pipeline and AI generated conversational insights on the Pipeline dashboard. And now we are going one step further. 

With the introduction of the Forecasting dashboard, your sales and success teams will now be able to:

  1. Track revenue targets for teams and individuals, 
  2. Monitor revenue attainment in real-time across multiple pipelines, and
  3. Use Deal Health Alerts to commit deals to forecast submissions

Setting/tracking revenue targets

Your sales and success managers can set revenue targets for teams and individuals across multiple pipelines such as ‘Sales’ ‘Renewal’ ‘Expansion’ et al. Avoma helps you assess the performance of teams/individuals by tracking their revenue target attainment. This makes it easy to identify team members who could benefit from personalized coaching. You can also identify team members who consistently achieve/exceed their revenue targets, and coach your team to emulate the sales practices of your top performers.

Committing deals to revenue forecasts

Now, when your team members submit their revenue forecasts for the month, they are no longer just another number. Sales and success reps need to commit deals from their individual pipelines to their forecast submissions. Avoma’s AI powered conversational intelligence analyzes the sentiment in your customer conversations, across email threads and online meetings. A positive sentiment in the conversation creates a positive Deal Health Alert.

Higher the number of positive health alerts for a deal, higher the chances of winning that deal. With Avoma’s automated CRM field updates, details from every customer conversation are synced to your CRM in real time. So you always have the most accurate and up to date insights available to help you analyze the health of deals in your pipeline.

With Deal Health Alerts, your sales and success reps can eliminate guesswork. Sales and success reps can objectively select the most ‘winnable’ deals from their individual deal pipelines, and commit the total value of such deals as their monthly revenue forecast submission. This makes your revenue forecasts more accurate and holds everyone on your team accountable at the same time!

As the status of deals change over the course of a month, reps can revise their forecast submissions. That way your team's revenue forecast is always up to date and accurate. Sales and success leaders can keep track of the history of revisions done to forecast submissions, and provide feedback to help team members build more accurate forecasts.

Validating your team’s revenue forecasts

Sales and success managers now have a way to validate forecast submissions for their entire team and for each individual.

They can check

(i) What is the team’s forecast submission for the month,

(ii) How many deals/What is the value of the deals committed against the forecast submission for the month, and

(iii) How many/What modifications were made to the forecast submission.

This gives sales and success managers an excellent way to hold their teams/team members accountable to the accuracy of their forecast submissions. By identifying instances of overestimation/underestimation and providing timely coaching to the right team members, your sales and success teams can become progressively better at forecasting revenue.

In conclusion

An accurate revenue forecast leads to higher revenue growth, and is arguably the most important number for your business. But most sales and success organizations struggle to get forecasting right: 80% of sales organizations report a forecast accuracy of under 75%2. With the AI Forecasting Assistant, Avoma seamlessly unifies sales data from your CRM and insights from customer conversations to help your sales and success teams build revenue forecasts with laser sharp precision.

You can read more about the AI Forecasting Assistant on our website. And if you want to find out how your team can get started with the AI Forecasting Assistant, you can talk to our product specialists.


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