CRM 101: How Reports & Forecasts Help You See What’s Ahead

For centuries, humans have been obsessed with predicting the future. In ancient Greece, people flocked to the Oracle of Delphi, whose cryptic prophecies shaped the decisions of kings and generals-though many of her predictions famously backfired. The Roman historian Livy recorded tales of soothsayers who misread omens, leading entire armies to disaster. Even the Mayans, renowned for their astronomical calendars, had their share of miscalculations, or that’s us who read their calendars wrong. Anyway.  

Nowadays, while we’ve swapped mystic rituals for data and algorithms, forecasting remains a challenge. Just take a look at the weather predictions on your phone. The more data we collect, the more accurate the predictions are. But what about business? Can we achieve similar accuracy there? Apparently, we can. According to Salesforce, 50% of forecasts land within a 10% accuracy range. Predicting outcomes may still be tough, but it’s far from impossible.

In this article, part of the CRM 101 series, I’ll cover:

• The basics of reports and forecasting.
• Key terminology you need to know.
• My thoughts on when to implement reports and forecasts in your business.
• The steps to successfully implement them.

Ready to understand how reports and forecasts can shape smarter business decisions? Let’s dive in!

Understanding the Basics

Let’s start with the boring but important basics.

A report is essentially a structured way of presenting data. Think of it as a snapshot of your business at a specific point in time in a format similar to Excel. Reports allow you to analyze your performance, understand patterns, and make data-driven decisions. Whether it’s tracking the number of new leads, monitoring sales performance, or identifying top-performing products, reports are your go-to tool for understanding what’s happening in your business.

Now, let’s talk about forecasts. Forecasts are a form of reports. While reports show you what has already happened, forecasts are all about predicting what’s to come. Forecasting uses historical data, probabilities, and current pipeline information to estimate future sales. It’s almost like having a crystal ball for your business, the only difference is… well, it works, sometimes.

In any case, it’s a good time to jump into the terminology.

Terminology

1. Object & Fields  

The first two terms are objects and fields that you are going to use for a report. An object represents a specific type of data in your system, such as a lead, opportunity, account, or product. If you need to report on sales, you will report on the Opportunity object. If you need to know anything about leads, you will pull a report from the Leads object. Each object contains fields where specific information is stored, like a client’s name, contact details, the amount of the opportunity, the date it was created, and so on. This is the basis of your reporting, which brings us to our next term, related object.

2. Related Object

A related object is linked to the original object. For example, a Quote will contain Quote Lines. An Invoice will have Invoice Lines. An Account may contain Contacts. These are all related objects. They help you build more sophisticated reports. 

For example, you might want to know which accounts have purchased certain products. As long as those products were added to an invoice, opportunity, or quote, or are otherwise linked to that account in your CRM through a transaction record, you can create a report that provides that information. But reports are boring without our next term, data visualization.

3. Data Visualization

Data visualization refers to how reports are represented visually. It can take the form of charts, cohort charts, gauges, or even simple numerical summaries that aggregate records in a report. Visualization makes large datasets, such as sales over the last three years, easier to understand at a glance. For example, a trend chart can display monthly sales, showing how they fluctuate – e.g., sales rise in June, peak in July, then drop in September. This brings us to the next term, dashboards.

4. Dashboards

A dashboard is a collection of multiple reports displayed on one screen using various visualizations, such as gauges, charts, and numerical summaries. Dashboards allow users to aggregate and analyze data from different reports in one place. Clicking on specific elements of a dashboard provides deeper insights, which brings us to the next term, drill downs.

5. Drill Downs

Drill downs enable users to explore detailed data within a report. For example, if a report shows sales by account, clicking on an account reveals more granular details, such as opportunities tied to that account. It’s like zooming in on a photo to see finer details. But sometimes you want to compare two numbers, which brings us to snapshots.

6. Snapshots

Snapshots are frozen copies of reports, capturing data at a specific point in time. For instance, you can take a snapshot of last year’s sales, then compare it to a snapshot of this year’s data to analyze trends over time. However, data would just be a list of meaningless numbers without aggregation.

7. Aggregation

Aggregation involves summarizing data using arithmetic methods like sum, average, minimum, or maximum. For example, calculating the average deal value across all sales opportunities. Aggregation can apply to row counts, numeric fields, or other groupings. However, you don’t want to aggregate irrelevant data, which brings us to filters.

8. Filters

Filters refine report data by including or excluding specific records. For example, you can filter a sales report to show only “closed won” opportunities within a certain date range. Filters can be absolute (e.g., May 1, 1999 – May 1, 2000) or relative (e.g., last 90 days). However, filters may have limitations, such as not allowing you to filter beyond an object you are currently reporting on, which brings us to dimensions.

9. Dimensions

Dimensions are like categories or labels you use to organize your data. Imagine you’re sorting a pile of sales records. You could group them by product to see which items are selling best or by time period to see monthly trends. These categories – like “Product” or “Month” – are your dimensions.

For example, if you’re reviewing last year’s sales, a report might show sales grouped by product to highlight top sellers. However, some systems might not let you combine dimensions easily, like showing sales grouped by both product and customer at the same time. This depends on how your data is stored, but most importantly, where you report on that data, which brings us to our last term in this article: business intelligence.

10. Business Intelligence (BI)

Business Intelligence (BI) refers to tools and systems that analyze and visualize data to aid decision-making. BI tools can be built into your CRM (e.g., Salesforce reporting) or be third-party (e.g., Microsoft Power BI, Google Data Studio). These tools often provide more flexible and powerful data analysis than standard reporting features.

Reporting and forecasting are complex topics with far more terms than I could cover here. Want to dive deeper and get to know more about reporting and forecasting? I’ve created a free PDF with 72 essential reporting terms, organized into five categories for easy reference. Don’t hesitate to download it and start building a stronger foundation for your CRM knowledge.

When to Implement 

Typically, I advise customers to implement tools when they feel the need to do things better. However, reports and forecasts are an exception. These should be implemented before you even start thinking about a CRM system.

I understand that this sounds confusing. Let me try to explain what I mean. You see, there are two types of implementations. Let me call them soft and hard implementations.

Here’s an example from my life. A few years back, I started running. I integrated this habit into my life. It took me a shift in mindset, overcoming my laziness, and learning how to train properly so that I didn’t ruin my knees. I did a soft implementation of running. But then, I needed gear: shoes, running trousers and shirts, but most importantly, smartwatches. That gear is my hard implementation. The gear itself does nothing, but it supports my habit. In the case of smartwatches, it gives me data about my heart rate so that I can regulate my tempo and stay within a healthy range.

The same applies to reporting.You first need to do a soft implementation. You have to look at your business and start asking questions that would require some reports. And then, once you know what data you need, you can do the hard implementation and find the right tools.

Often, a business is already doing reporting, just the form is not standardized. This could be meetings with employees or written forms that colleagues are filling in manually. Take a look at all of that and ask yourself a question: how can we standardize that, and what data will we need for that? Once you have those questions answered, you’re ready to proceed with a hard implementation, which brings us to our next topic – how to implement reports and forecasts.

How to Implement Reports and Forecasts

This is actually the easiest part, at least for me. If you know exactly what you need 

to report on, you can then make a so-called GAP analysis.

A GAP analysis means you evaluate your company’s existing tools and compare them to your target reports. You then write down what data you are missing, and this will be your gap: the gap between your current situation and your target situation.

Next, you’ll need to ensure that your business collects the necessary data and that your software can store it properly. This often involves customizing your current CRM by adding new fields. However, simply adding fields isn’t enough. You must also ensure that your team is actively using the software and consistently inputting the required data.

Finally, review your requirements and assess whether your software can deliver the reports and forecasts you need in the desired format. If it falls short, consider using third-party BI tools.

BI tools gather data from multiple sources, such as your CRM, ERP, accounting software, website, or e-commerce platform. These tools consolidate all that data, making it possible to combine and analyze it in one place – often as a single, comprehensive table. While this is an oversimplification, it illustrates what BI tools do for you.

To summarize:

1. Start by identifying the reports you need.
2. Ensure you have sufficient data to generate those reports.
3. Adjust your software and, more importantly, your business processes to collect the right data.
4. Finally, implement your reports and forecasts using either your existing CRM software or third-party BI tools.

Final Thoughts

Let’s quickly recap what we’ve covered in this article:

• Reports provide a structured way to analyze your business data, while forecasts help predict future outcomes based on historical trends and current pipelines.
• We explored key terms like objects, related objects, data visualization, dashboards, drill downs, and filters – all essential for effective reporting.
• I shared my thoughts on why reports and forecasts should be implemented before your CRM, starting with soft business processes and moving to technical tools.
• Lastly, we discussed how to implement reports and forecasts, emphasizing the importance of a GAP analysis and how BI tools can enhance your capabilities.

In case you need a hand with CRM, you know where to find us. At Muncly, we’re always ready to help you turn data into insights and insights into growth. Don’t hesitate to reach out anytime!