How To Use HubSpot Forecasting: Experience from a VP of Sales

Accurate forecasting isn’t just a nice-to-have—it’s a must-have. It allows you to predict future sales, allocate resources efficiently, and make informed strategic decisions that keep your business on track. 

If you’re looking for a tool to simplify and enhance your sales forecasting, HubSpot’s Forecasting tool might just be the answer. 

HubSpot Forecasting gives sales teams a simple way of estimating where their sales will end up at the end of the quarter. It provides a ton of functionality like forecasting categories, weighted pipelines and historical snapshots to help you make better decisions about your business.

This guide will walk you through everything you need to know about leveraging HubSpot’s forecasting capabilities to boost your business performance.

What is Sales Forecasting?

Let’s start with the basics. 

Sales forecasting is the process of estimating future sales by predicting how much product or service will sell by the end of a certain period. These estimates are typically based on past sales performance and current market conditions. 

Think of it as your business’s weather forecast—it helps you prepare for what’s coming and make strategic decisions that drive growth. 

Accurate sales forecasts can highlight potential issues early and even help you manage hiring and resources more effectively.

Why Sales Forecasting is Important

1. Financial Planning and Resource Allocation

Sales forecasts are crucial for financial planning. 

They help you determine where to allocate resources, set realistic sales targets, and plan your budget. 

Without accurate forecasts, you might overextend yourself or miss out on growth opportunities.

2. Motivation and Goal-Setting

A good sales forecast can be a powerful motivational tool. 

By updating forecasts quarterly and comparing them to your team’s progress, you can celebrate wins and identify top performers. It’s a great way to keep your team engaged and focused.

3. Spotting Potential Issues

Sales forecasting allows you to spot potential issues before they become major problems. 

For example, if your forecast shows a dip in sales, you can investigate and adjust your strategy to mitigate the impact.

4. Hiring and Resource Management

Knowing your sales forecast helps in making informed decisions about hiring and resource management. 

If you predict a surge in sales, you might need to hire additional staff or ramp up production.

5. Investment Planning and Investor Relations

Accurate sales forecasts are also essential for investment planning and building strong relationships with investors. 

They provide a clear picture of expected revenue, which can help you secure funding and make smart investment decisions.

Common Sales Forecasting Challenges You Should Be Aware Of

Despite its importance, sales forecasting comes with its own set of challenges. Here are a few common ones:

1. Inaccurate Pipeline Data

An inaccurate pipeline can lead to poor forecasts. Deals need to be correctly categorized and updated regularly to ensure your forecasts are reliable.

2. Lack of Historical Sales Data

New businesses often struggle with forecasting because they lack historical sales data. However, you can use industry benchmarks and market research to create initial forecasts.

3. Inaccurate Data

If the data you use to create forecasts is inaccurate or incomplete, your forecasts will be too. It’s essential to ensure data quality for accurate forecasting.

4. Lack of Collaboration

Sales forecasting requires input from various departments. A lack of collaboration between sales, marketing, and finance can lead to inaccurate projections.

5. Subjectivity and Bias

Relying too much on gut feelings and subjective opinions can skew your forecasts. It’s important to base forecasts on objective data.

6. Technology Limitations

Many businesses use multiple tools to close sales, which can make it challenging to gather all the necessary information for accurate forecasts. Ensuring your tools integrate well can help.

HubSpot’s Forecasting Tool Overview

HubSpot’s Forecasting Tool is designed to address these challenges and make sales forecasting more accurate and efficient. Here’s what you need to know:

Key Features and Benefits

• Integration with HubSpot CRM: Ensures all sales data is current and provides real-time insights.
• Real-Time Updates: Forecasts update automatically as new deals are added or existing deals progress.
• Customizable Reporting and Forecast Categories: Tailor forecasts to reflect specific needs, such as deal stages or team dynamics.
• Role-Based Dashboards and Scenario Planning: Provides tailored dashboards for different roles and allows for scenario planning.

Setting Up HubSpot Forecasting

Before you can start using HubSpot’s Forecasting Tool, there are a few setup steps:

1. Assign User Permissions: Ensure your users have the necessary forecast permissions.
2. Set Revenue Goals: Assign revenue goals to your team.
3. Configure Forecast Categories: Set up categories to group deals based on their likelihood to close.
4. Set Preferred Currencies: Each user can set their preferred currency for forecast data.

Submitting and Managing Forecasts

Once everything is set up, you can start submitting and managing forecasts. Here’s how:

Submitting a Custom Forecast

1. Navigate to Reporting & Data > Forecast.
2. Select the User or Team: Click the edit icon next to the user or team you want to submit a forecast for.
3. Enter Forecast Amount: Select the pipeline and forecast period, then enter the forecast amount.
4. Submit Forecast: Click ‘Submit forecast’ to save.

Reviewing and Editing Forecasts

1. Navigate to Reporting & Data > Forecast.
2. Filter and Review: Use dropdown menus to filter by pipeline, close date, or team.
3. Analyze Performance: Review individual and team performance metrics.

Analyzing and Reviewing Forecasts

HubSpot’s Forecasting Tool allows you to analyze your forecasts in detail:

1. Review by Deal Stage: Click the ‘Deal stage’ tab.
2. Review by Category: Click the ‘Forecast category’ tab.
3. Drill Down by User: Click on a user’s name to review their deals and identify areas needing attention.

Tips for Getting More Accurate With HubSpot Forecasting

Keep Data Updated

Ensure all deals and stages are up-to-date in your HubSpot CRM. Accurate data is crucial for reliable forecasts.

Customize the Tool

Tailor HubSpot forecasting tool to fit your business needs. Adjust deal stages, probabilities, and timeframes for better accuracy.

Leverage Historical Data

Use past sales data to identify trends and patterns. This can help refine your forecasts.

Regularly Review and Update

Review and update your forecasts regularly to keep them accurate. Market trends and economic conditions can change, and your forecasts should reflect that.

Collaborate with Other Departments

Work with other departments to gather comprehensive data. Collaboration promotes a holistic view and improves forecast accuracy.

Train Your Sales Team

Ensure your team understands how to use the forecasting tool effectively. Provide training and resources to help them make the most of it.

Sales Forecasting Methods

There are several methods you can use for sales forecasting. Here are some of the most popular:

Opportunity Stage Forecasting

Predicts the likelihood of a deal closing based on its stage in the sales pipeline. It’s easy to implement but doesn’t account for how long a deal has been in a stage.

Length of Sales Cycle Forecasting

Uses the age of opportunities to determine their likelihood of closing. It’s objective but requires careful tracking of when leads enter the pipeline.

Intuitive Forecasting

Relies on the intuition of sales reps. Useful for new businesses without historical data but prone to bias.

Historical Forecasting

Uses past sales data to predict future sales. Simple to implement but assumes constant buyer demand and doesn’t account for seasonality.

Multivariable Analysis Forecasting

Incorporates multiple variables like historical sales data, seasonality, market trends, and rep performance. It’s highly accurate but requires detailed records and sophisticated software.

Test-Market Analysis Forecasting

Test a new product or service with a small audience to estimate future sales. It’s costly but provides valuable insights before a full-scale launch.

Factors Impacting Sales Forecasts Accuracy

Several factors can influence the accuracy of your sales forecasts:

• Hires and Fires: Changes in staffing levels can impact revenue.
• Policy Changes: Company policies, such as discount periods, can affect sales patterns.
• Territory Shifts: Entering new territories or reassigning reps can cause temporary dips in sales.
• Competitive Changes: Actions by competitors, like price cuts or new products, can affect your win rate.
• Market Changes: Economic conditions, supply chain disruptions, and raw material availability can impact sales.
• Legislative Changes: New laws and regulations can create or reduce demand for your products.
• Product Changes: Introducing or removing features can influence sales.
• Seasonality: Some products have seasonal demand spikes that should be accounted for in forecasts.

Best Practices for Using HubSpot Forecasting

When using HubSpot’s Forecasting, these best practices ensure the accuracy and utility of your sales projections. Here are some strategies to improve your forecasting process:

1. Regular Data Hygiene

Your sales forecast is as accurate as your data inputs.

Regularly clean the sales pipeline to remove old or stagnant deals and verify that all active opportunities are properly categorized.

Accurate data is the backbone of reliable forecasting.

2. Customize Forecast Categories

Tailor the HubSpot forecasting categories to align with your specific sales process. This allows for more granular insights and improves the accuracy of the forecast.

For example, differentiating between early-stage leads and near-closure deals can provide a clearer picture of potential revenue.

3. Leverage Historical Insights

Use historical performance data to set benchmarks and understand seasonal fluctuations or sales cycles.

This data can help adjust forecasts to reflect realistic outcomes based on past trends and identify areas where the sales process can be optimized.

4. Integrate Collaborative Input

Sales forecasts should incorporate insights from across the organization, including marketing, customer success, and finance teams.

This ensures that the forecast considers all aspects of the customer lifecycle and business operations, leading to a more comprehensive and accurate forecast.

5. Continuous Monitoring and Adjustment

Sales are dynamic, with frequent changes in market conditions and internal strategies.

Regularly review and adjust forecasts to reflect these changes. This continuous process helps maintain the relevance and accuracy of the forecasts.

6. Train and Empower Your Team

Ensure that all relevant team members are trained on how to use HubSpot’s Forecasting effectively.

Empowering your team with the knowledge and skills to input data correctly and interpret forecast results will enhance the overall accuracy of the forecasts.

7. Use Scenario Planning

Take advantage of HubSpot’s scenario planning features to anticipate various sales outcomes based on different conditions.

This approach allows you to prepare for multiple possibilities and formulate strategies that are resilient under various future scenarios.

8. Align Forecasts with Business Goals

Make sure that your sales forecasts align with broader business objectives and targets. This ensures that the forecasts serve strategic purposes, guiding decision-making processes that support the company’s overall goals.

Final Thoughts

Mastering sales forecasting can enhance your sales strategy and decision-making processes.

Using tools like HubSpot Forecasting makes the process more efficient and ensures data accuracy. By leveraging real-time data, machine learning, and customizable forecasting categories, HubSpot enables businesses to plan more accurately and adapt swiftly to changes in the marketplace.

Whether you are a seasoned sales leader or a business owner, investing time in understanding and utilizing HubSpot Forecasting can lead to better-informed, data-driven decisions that pave the way for sustained business success.

If you aren’t using forecasting or any other platform features then it might be time to do HubSpot audit. Think of it as an annual checkup to see how you can maximize your platform usage.

Forecast with Confidence

With Revenue Reveal, your sales team can make a sales forecast with confidence – with or without Hubspot Forecast!

We work with growing B2B sales teams to build their sales process and refind their revenue operations, this allows you to:

• Make data-driven decisions about your sales pipeline.
• Uncover winnable sales opportunities.
• Take advantage of all the features and functions that your CRM can offer.
• Build more pipelines in a predictable and scalable way.
• Increase win rates and welcome more new customers.

Interested? Click here to schedule a free strategy call.