[[{"@context":"http:\/\/schema.org","@type":"BlogPosting","publisher":{"@type":"Organization","logo":{"@type":"ImageObject","url":"https:\/\/www.the-future-of-commerce.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-foc-2x.svg","height":"96","width":"293","@id":"https:\/\/www.the-future-of-commerce.com\/wp-content\/themes\/hybris_foc\/assets\/images\/layout\/logo-foc-2x.svg"},"address":{"@type":"PostalAddress","name":"The Future of Commerce","addressCountry":"https:\/\/www.the-future-of-commerce.com\/#Country","addressLocality":"Newtown Square","addressRegion":"PA","postalCode":"19073","streetAddress":"3999 West Chester Pike","@id":"https:\/\/www.the-future-of-commerce.com\/#PostalAddress"},"url":"https:\/\/www.the-future-of-commerce.com\/","alternateName":"The Future of Commerce and Customer Engagement","additionalType":"news media","name":"The Future of Commerce","description":"News, information, and analysis on the future of commerce, including e-commerce, customer engagement, B2B, B2C, DTC, supply chain, sustainability, and purpose.","sameAs":["https:\/\/www.linkedin.com\/groups\/4844282","https:\/\/podcasts.apple.com\/us\/podcast\/a-call-for-a-better-experience\/id1479742201","https:\/\/twitter.com\/FutureOfCEC","https:\/\/www.the-future-of-commerce.com\/feed\/"],"contactPoint":"https:\/\/www.the-future-of-commerce.com\/#ContactPoint","legalName":"The Future of Commerce","parentOrganization":"https:\/\/www.sap.com\/index.html#Organization","numberOfEmployees":"https:\/\/www.the-future-of-commerce.com\/#QuantitativeValue","@id":"https:\/\/www.the-future-of-commerce.com\/"},"about":[{"@type":"Thing","name":"sales planning (Q331819)","@id":"https:\/\/www.wikidata.org\/wiki\/Q331819#Thing"},"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#About",{"@type":"Thing","name":"Forecasting","@id":"https:\/\/en.wikipedia.org\/wiki\/Forecasting#Thing"},{"@type":"Thing","name":"Sales forecasting","@id":"https:\/\/en.wikipedia.org\/wiki\/Sales_operations#Sales_forecasting"},{"@type":"Thing","name":"Sales operations","@id":"https:\/\/en.wikipedia.org\/wiki\/Sales_operations#Thing"}],"image":"https:\/\/www.the-future-of-commerce.com\/wp-content\/uploads\/2021\/09\/sales-forecasting-FTR-1200x370.png","dateModified":"2025-04-22","description":"Unlock the power of sales forecasting\u2014discover definitions, examples, and proven methods to accurately predict future sales and boost your business growth.","name":"Sales Forecasting in 2025: Definition, 5 proven methods, and How\u2011To guide","headline":"Sales Forecasting in 2025: Definition, 5 proven methods, and How\u2011To guide","url":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/","datePublished":"2021-09-06","subjectOf":{"@type":"FAQPage","name":"Sales Forecasting in 2025: Definition, 5 proven methods, and How\u2011To guide","about":[{"@id":"https:\/\/en.wikipedia.org\/wiki\/Forecasting#Thing"},{"@id":"https:\/\/en.wikipedia.org\/wiki\/Sales_operations#Sales_forecasting"},{"@id":"https:\/\/en.wikipedia.org\/wiki\/Sales_operations#Thing"},{"@id":"https:\/\/www.wikidata.org\/wiki\/Q331819#Thing"},"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#About"],"mainEntity":[{"@type":"Question","name":"What is sales forecasting?","acceptedAnswer":{"@type":"Answer","name":"What is sales forecasting?","text":"Sales forecasting is the practice of predicting how much revenue a company will close in a set period \u2013 month, quarter, or year \u2013 by analyzing historical data, current pipeline health, and external market signals.","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#Answer1"},"@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#Question1"},{"@type":"Question","name":"Why sales forecasting matters?","acceptedAnswer":{"@type":"Answer","text":"<p><strong>Sales forecasting isn't just about predicting numbers; it's foundational to every revenue\u2011driven plan. Here's why:<\/strong><\/p> <ul> <li><strong>Strategic decision making:<\/strong> Sales forecasts provide a clear picture of where a business is headed, which factors into making decisions about product launches, market expansions, or even potential mergers and acquisitions. Understanding these forward looking projections can help businesses make informed decisions that align with their long-term goals.<\/li> <li><strong>Resource allocation:<\/strong> A close-to-accurate sales forecast ensures that resources - whether it's labor, capital, or technology - are allocated efficiently. Proper allocation prevents over-spending in areas that might not yield returns, and ensures that high-potential areas receive attention and investment.<\/li> <li><strong>Budgeting and goal setting:<\/strong> Accurate and reliable sales forecast data is foundational to estimating future revenue and costs, as well as setting realistic yet challenging goals for revenue teams. Such data-driven insights help businesses allocate resources efficiently, ensuring that teams are equipped to meet their targets while also safeguarding a company's financial health.<\/li> <li><strong>Proactive problem solving:<\/strong> One of the most significant roles for sales forecasting is the ability to spot potential issues before they become major problems. For example, if a sales team is trending below its quota, sales managers can take timely action, preventing minor setbacks from escalating into significant ones.<\/li> <li><strong>Stakeholder confidence and risk management:<\/strong> Accurate forecasts build trust with boards and investors - yet Xactly's 2024 Sales Forecasting Benchmark Report found that 4 in 5 sales and finance leaders missed at least one quarterly forecast last year.<\/li> <\/ul>","name":"Why sales forecasting matters?","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#Answer2"},"@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#Question2"},{"@type":"Question","name":"Five proven sales\u2011forecasting methods","acceptedAnswer":{"@type":"Answer","text":"<p>Most organizations mix several approaches. These five methods cover the tactics that consistently deliver the highest forecast accuracy:<\/p> <ol> <li><strong>Historical trend analysis:<\/strong> Looking at historical data is perhaps the most common as well as most straightforward approach. The data is readily available, and it makes sense that variations based on factors like seasonality and new product introductions would provide directional insight. The limitation, of course, is that external, macro trends that impact sales aren't necessarily considered - at least not in a systematic fashion.<\/li> <li><strong>Pipeline\u2011stage forecasting:<\/strong> For many companies, the current state of the sales funnel is viewed as the most accurate predictor of likely sales outcomes. As long as sellers are providing accurate and frequently updated information about the state of given pursuits, use of the funnel can be a reasonably reliable means upon which to make forecasts.<\/li> <li><strong>Multivariable regression models:<\/strong> Given that both of the above approaches have inherent limitations, some organizations are looking to build more complex forecasting models that incorporate techniques such as intelligent lead scoring alongside macro factors that are likely to impact the closing of deals. The trick is to put in place an approach that's sophisticated enough to be meaningful without being too complex to manage and maintain.<\/li> <li><strong>Sales\u2011cycle length forecasting:<\/strong> With this technique, an enterprise takes into account the typical duration of a sales cycle in predicting future sales. By understanding how long it generally takes to convert a lead into a sale, businesses can better anticipate their revenue streams, making for more accurate forecasting.<\/li> <li><strong>AI\u2011assisted predictive scoring:<\/strong> This method applies machine\u2011learning algorithms to historical wins and losses, buyer activity, and external signals. The model assigns a closing\u2011probability score to every opportunity, surfacing deals most likely to convert this cycle and sharpening the accuracy of the overall forecast.<\/li> <\/ol>","name":"Five proven sales\u2011forecasting methods","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#Answer3"},"@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#Question3"},{"@type":"Question","name":"How to forecast sales: 8 key steps","acceptedAnswer":{"@type":"Answer","text":"<p>Here are eight practical steps that consistently improve forecast accuracy. Implementing these steps ensures precision in your revenue projections:<\/p> <ol> <li><strong>Codify a shared sales process.<\/strong> Seems like a no-brainer, right? Your sales teams operate from a common lexicon about the sales funnel and the stages within it that your organization employs. In reality, there's frequently a genuine disconnect. To avoid this, codify a common sales process with clear stages and a consistent vocabulary so that every team member structures their work the same way, and the stages of the pipeline mean the same thing to everyone.<\/li> <li><strong>Set realistic quotas - and communicate them.<\/strong> Again, this may seem obvious. But many companies either set unrealistic sales quotas, or fail to effectively communicate individual goals and how they ladder up to the broader plan. Set realistic and measurable sales goals based on past performance and market conditions, so every team member knows their targets and how they contribute to a larger plan.<\/li> <li><strong>Benchmark core sales metrics.<\/strong> Forecasting involves using historical data to effectively estimate future results. Benchmarking ensures there's a sound basis for comparison with historic data, and is more effective when combined with a robust CRM system to track leads, sales stages, and customer relationships with real-time data and metrics for forecasting revenue.<\/li> <li><strong>Scrub and monitor your pipeline in real time.<\/strong> If you want to achieve better forecasting, accuracy starts now. New technologies provide sales teams with intelligence that enables them to scrub leads that aren't actually viable, realistically assess those that are, rescue ones at risk, and commit to a higher degree of precision going forward.<\/li> <li><strong>Select your forecasting technique and A\/B\u2011test it.<\/strong> Determine a predictive method that's best suited for your business model and market complexity. Continually test these methods to improve accuracy, and change the approach based on market conditions.<\/li> <li><strong>Integrate data across marketing, product, and finance.<\/strong> Leverage data from across departments to get a more realistic view of business performance. By integrating data, you'll not only get a more accurate representation of the market potential, but also spot internal constraints. This can provide more realistic predictions that guide business decisions.<\/li> <li><strong>Compare forecast vs. actuals and mine the gaps.<\/strong> Implement a process of continuous improvement by conducting periodic assessments of past forecasts versus realized results. This retrospective analysis can help identify patterns in forecasting performance and areas where new methods might be required.<\/li> <li><strong>Document, iterate, and automate the process.<\/strong> Document your forecasting process and make it an integral part of the sales strategy. With every iteration, revisit the process and improve with new data and insights so that sales forecasting remains relevant and adaptable to changing conditions internally and externally.<\/li> <\/ol>","name":"How to forecast sales: 8 key steps","@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#Answer4"},"@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#Question4"}],"@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/#FAQPage"},"mainEntityOfPage":{"@id":"https:\/\/www.the-future-of-commerce.com\/2021\/09\/06\/what-is-sales-forecasting-definition-examples-methods\/"},"author":{"@type":"Person","url":"https:\/\/www.the-future-of-commerce.com\/contributor\/don-gordon\/","image":"https:\/\/23x6xj3o92m9361dbu2ij362-wpengine.netdna-ssl.com\/wp-content\/uploads\/2017\/02\/don-gordon-512x512.jpg","name":"Don Gordon","description":"Don Gordon works in global Customer Experience and Consumer Products marketing. 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