Why Your Sales Forecast Is Always Wrong - And How to Fix It

“Hey Team! We have 2 days left to invoice $3.4 million to hit our forecast goal for this month. I need updates on anything you have going out.” If you are a sales manager, you have most likely sent this message to your sales team before, or you are about to send this message right now. Either way, if you are reading this blog, one thing is clear: you are at your wits’ end with your forecast being wrong more times than it’s right.

Where it Breaks Down: Your CRM

Each salesperson has a different relationship with your CRM tool, and it is no secret that your favorite seller, John from Sales Team B, has a loving relationship with the CRM. His forecast is always within a 5% margin of error, all his opportunity fields are updated at the end of each day, and he provides a beautifully handwritten note for each project he is working on. You often think to yourself, how can I get all of my sellers to be like this?

The reality is, most sellers aren’t like John and never will be. Despite how you might feel about it, it’s not because they are lazy, it’s because your CRM is not designed with the seller in mind. Updating pipeline details after every call, remembering exact close dates, and manually changing deal stages, this all requires reps to stop selling, switch contexts, and become data entry clerks. It may be frustrating because they are failing to perform a critical job duty, but if you want to fix your forecast, you have to accept the reality that this is how sellers feel about it.

The worst part: the more opportunities that a seller has open, the more likely they are to have a dilapidated pipeline. Your highest performers are often your biggest cause of forecast misalignment. Their deals are bigger, and when they are wrong about a close date, it can change a whole month or even a quarter.

So you’re left with a pipeline that looks full but feels off. Deal amounts don’t reflect reality. Stages lag weeks behind. And when the exec team wants numbers… you’re guessing, gut-checking, and praying it’s close enough.

The Ripple Effect of Bad Forecasts

Inaccurate forecasts can have a multitude of negative effects on businesses. If you are the owner of a small or medium business, these effects can have monumental consequences. You may plan inventory purchasing based on your forecast, or you might inadvertently share false information with investors and partners. If you are a sales manager or sales director at a larger organization, inaccurate forecasts can erode an executive's trust in you or cause operational chaos in other areas of the business you are not privy to. If you are a leader at a Fortune 500 company, inaccurate forecasts across an entire organization can compound into stock performance issues that lead to layoffs.

One thing is clear: regardless of the size of your organization, forecast inaccuracies have lasting effects.

What’s Actually Needed for Forecast Accuracy

Before we tell you how to fix your forecast, you must understand the section below. There are four things that are required to have a consistently accurate forecast report that you are proud to submit at the end of each month.

Timely Updates

As a sales leader, you need to communicate the importance of spending time inside the CRM each day. Failure to update information in a timely manner will result in a compounding effect where missing or untrue information can go unchecked for days or weeks. As the sales leader, your sellers need to know that you look at their pipeline and opportunities each day.

Honest Seller Input

Understanding what features and functionalities of the CRM tool benefit sellers the most is key to getting more accurate forecasts. During 1:1s with your sellers, have discussions about their frustrations. Take their input seriously. If you own the company or are in a position where you can facilitate sellers’ ideas being implemented, do everything you can to make it happen.

Consistent Structure

If sellers don’t have a regularly scheduled cadence with their managers or with the entire team to discuss their open opportunities, lost projects, and customer sentiment, they feel that their pipeline updates are simply a surveillance mechanism. When you engage your seller beyond the close date and opportunity value, they begin to see the forecast as a tool to evaluate their own performance and keep organized, but you must engage them about their forecasts consistently.

Low-Friction Data Capture

As CRM systems become more sophisticated, so do their capabilities to track meaningful events. The only catch with this incredible software is that it requires a tremendous amount of human data input. It is a time-old saying that “updating the CRM takes time away from selling.” Although this is frustrating to hear as a manager who is trying to get an accurate forecast, or as an owner who is trying to plan for the next quarter, there is some truth to it. As a leader at your organization, you need to advocate for tools that help sellers with data capture.

How Teams Are Fixing This Today

The traditional approach for managing forecasts is having long pipeline meetings, performing deal reviews, and sending reminders over Slack or Teams. As a manager, this takes time out of your day, and sellers find these tactics insufferable. Chances are that you have some kind of weekly or monthly pipeline meeting. It probably involves your entire team and may take an hour or more, and it is just you asking sellers, “What do you think you are going to get out this month and why?” and sellers responding with boilerplate answers that all sound the same. You may even do individual deal reviews if the opportunity is over a certain dollar figure, but you run into the same issues; sellers giving boilerplate answers that are oftentimes not even accurate. Finally, the most annoying fix that teams are using today: sending a private message to a seller asking them to update their CRM. These tactics are out of date and simply don’t work.

New Approach: Automate Opportunity Check-Ins

It’s no secret that Artificial Intelligence (AI) has been taking the world by storm. AI has found itself being integrated into almost every aspect of our lives. Many organizations use ChatGPT or Microsoft’s Copilot to assist with tasks that were previously performed manually. AI has been enabling organizations of all sizes to take laborious tasks and outsource them to an AI virtual team member.

As AI becomes more accessible to organizations of all sizes, technology companies, like StageKite, have invested significantly in finding ways to streamline internal systems with the use of Artificial Intelligence.

Modern sales teams are now using Conversational AI platforms to automate forecast calls. Imagine this: a Conversational AI can call all of your sellers simultaneously and ask them relevant questions about their opportunities: how they are feeling about this project, what their relationship with the customer is like, the story behind the deal, and the intangible feelings or hunches they have about the opportunity. The Conversational AI bot will ingest and make sense of the data that the seller discussed during their call and automatically make updates to the CRM, make notes on the account, and send you, as the manager, a concise report about what the seller is doing and where they need help. The calls usually last less than 15 minutes and collect approximately 65 updates per seller per call.

Using Conversational AI to automate forecast calls yields more accurate forecasting because the medium of communication, speech, is much more natural than entering data fields on a clunky CRM. This tool can integrate with many CRMs and can be set up and ready to host a virtual forecast call within 10 minutes. This tool has been saving modern sales organizations hundreds of hours per year. Managers get to spend more time focusing on strategy, and sellers are providing incredibly accurate forecasts. It truly is a no-brainer to give it a try and see how it can fix your forecast.

How to Try Conversational AI for Free

StageKite offers a 14-day free trial of our Conversational AI bot, Truman. You can see for yourself how powerful this tool is and how it will improve your forecasting accuracy in just two weeks. Try StageKite Complete today!