Sales forecasting provides a forward-looking view of revenue and helps guide strategic decisions across the organization. Among other things, leaders use sales forecasts to evaluate resource allocation, growth strategies, market expansion, pricing, and product investment decisions, as well as identify and react to possible risks early.
In this blog post, we review two alternative forecasting methods: Salesforce’s native forecasting and predictive forecasting with sales reporting tool Dear Lucy.
Forecasting with Salesforce
Salesforce forecasting primarily refers to Collaborative Forecasts, which allow teams to share and adjust forecasts in a transparent environment. It's often used by sales managers and reps to predict revenue and track progress.
Salesforce uses the role hierarchy to aggregate forecasts. For example:
Individual contributors submit their forecasts.
Their manager sees a roll-up of those forecasts.
Executives can view forecasts across teams or the entire company.
In Salesforce, each opportunity is assigned a category:
Pipeline: Early-stage deals.
Best Case: More likely but not guaranteed.
Commit: Deals expected to close.
Closed: Already won opportunities.
These categories can be customized and mapped to opportunity stages, and the weighted categories are used as the basis for all forecasts in Salesforce.
However, there are some serious downsides to this approach, which we’ll discuss next.
The Limitations of Salesforce’s Native Forecasting Features
While Salesforce’s native forecasting capabilities are better than nothing, there are several potential downsides that users and admins should be aware of:
Complex Setup
Setting up forecasting can be complex, especially for organizations with non-standard sales processes or custom revenue models. Configuring the forecast hierarchy, mapping opportunity stages to forecast categories, and managing quotas across teams often requires deep knowledge of Salesforce administration.
Limited Customization Options
Salesforce’s native forecasting is tightly coupled to opportunity objects and standard fields. If your organization uses custom objects, multiple revenue streams, or nonlinear sales cycles, the native tool might not support your needs without significant workarounds.
Inaccurate Forecasts
In Salesforce, deal weighting is set manually and forecasts are not based on historical data or performance, only on the manually adjusted weighted pipeline categories, which don't have any data analysis nor intelligence.
With Salesforce, your forecasts are only as reliable as the people behind those forecasts. Inaccuracies creep in from a lack of experience, overconfidence, and a number of other human factors. While managers and reps can manually adjust forecast numbers, there's limited transparency or enforcement of standard practices. Manual adjustment can cause misalignment between reported forecasts and actual pipeline health.
Short-Term Focus
Salesforce’s forecasting capabilities are entirely based on open opportunities. This means that you only get forecasts for a short time period (depending on the length of your sales cycle), hindering your ability to plan ahead.
Lack of transparency
Einstein Forecasting, Salesforce’s AI-driven forecasting engine, is only available in certain editions, requires enough historical data, and may require extra licenses. It also acts as a black box with limited visibility into how predictions are calculated, which means that you might not be able to trust it fully.
With these limitations in mind, let’s take a look at an alternative forecasting approach.
The Benefits of Predictive Forecasting with Dear Lucy
Dear Lucy enhances Salesforce’s native forecasting capabilities by introducing advanced AI-driven analytics, user-friendly dashboards, and streamlined reporting processes.
Here’s how Dear Lucy stands out:
AI-Powered Predictive Forecasting
Unlike Salesforce's traditional forecasting, which solely relies on manual inputs, Dear Lucy leverages artificial intelligence to analyze both historical and current pipeline data. This approach provides more accurate and insightful predictions than Salesforce’s native tools, reducing human error and bias.
Dear Lucy uses a rolling 12-month average of all meaningful data points (e.g. deal volume, size, win rate) to create predictive forecasts for a much longer time period than what your existing pipeline spans. These forecasts get automatically updated based on the current period’s performance, allowing you to always have an accurate prediction of what the rest of the year will look like.
Predictive Opportunity Scoring
Dear Lucy also gives you access to predictive opportunity scoring, assigning ratings to deals based on their likelihood to close. It knows what winning looks like in your organization by comparing your open pipeline to the attributes of the deals that have been closed/won before. This feature helps sales teams prioritize high-potential opportunities and identify deals at risk, allowing you to take the right action at the right time.
Easy Customizability
In addition to AI-based algorithms that automatically assign weights for various variables based on historical performance, Dear Lucy also gives you full control of the settings. This way, you can create different forecasting models by manually adjusting the weights for different values and create different scenarios, for example, comparing best case with commit.
Enhanced Visualization and Dashboards
Dear Lucy offers intuitive, visually engaging reports that can display real-time sales forecasts, targets, and performance metrics in a single graph. These dashboards are customizable and can be tailored to various stakeholders, from sales reps to executives, facilitating better decision-making.
Over to you
After reading this post, you should have a balanced picture of the benefits and downsides of sales forecasting with Salesforce’s native tools and Dear Lucy.
If you have any questions or would like a live demo of Dear Lucy, schedule time with one of our product experts.
Start creating more accurate forecasts today
Dear Lucy helps you create reliable forecasts that allow you to make confident decisions. Start a free 10-day trial today to see it for yourself.