Forecasting
Term from the CRM Lexicon
Definition
Forecasting in CRM refers to the prediction of future business results, especially revenues, based on existing data such as leads, opportunities, historical sales figures, and current pipeline information.
CRM systems like Microsoft Dynamics 365 use forecasting to predict future sales opportunities and revenues, thereby optimizing sales planning and management.
Goals
- Create Revenue Forecasts
Companies can set realistic expectations for upcoming weeks, months, or quarters. - Improve Resource Planning
Forecasts help to optimally plan personnel, budget, and production capacities. - Identify Risks Early
Deviations between the forecast and actual progress indicate a need for action. - Support Strategic Decisions
Management can make informed decisions based on data.
Example
A company uses Dynamics 365 CRM to create its sales forecasts. The deal pipeline currently contains 50 opportunities, each with different closing probabilities and revenue values. The system calculates a weighted revenue forecast for the upcoming quarter from this data. Based on this forecast, management recognizes that the current pipeline is insufficient to achieve the revenue target. Targeted marketing campaigns are then launched to generate additional leads and strengthen the pipeline.
Features
| Data-driven | Forecasts are based on historical sales data, current opportunities, and customer behavior. | |
| Dynamic & Real-time | Forecasts automatically adjust as the pipeline or customer data changes. | |
| Multi-level Analysis | Consideration at various levels: per salesperson, team, region, or product line. | |
| AI Integration | Modern CRM systems use AI models for more precise predictions (e.g., Predictive Forecasting). | |
| Visualization | Dashboards and diagrams clearly display forecasts, often with scenario analyses (optimistic, realistic, pessimistic). |