The Art of Sales Forecasting
You probably know this already, but sales forecasting is all about knowing how much revenue your team or business is likely to bring in over a set time period, and in which geographical area a product is likely to perform well. And you set these figures and values by analyzing historical data and insights, right? Well yes, but there’s more. While being savvy at sales forecasting is one of the main drivers of profitability and success for any sales team, the landscape of how this is achieved is and what you should be looking for is changing almost as quickly as you’re reading this.
The market appetite for accurate, value-rich sales data, and forward-thinking forecasting techniques is huge, with an increasing emphasis on gaining a better understanding of consumer trends and behaviors. But before you purchase any supporting software tools to help you gain a deeper analysis, why not read our guide to understanding what is the next big thing in sales forecasting methods?
Predictive Tools for Forecasting Sales
While there are very few things guaranteed to give you an accurate picture of the future (fairground fortune-tellers notwithstanding), there are now a variety of reliable software platforms that can provide an almost certain snapshot of what is likely to happen within your sales pipeline in any given circumstance and time period.
Breaking this down, by using the right sales performance management software program, you can set criteria for a single product, line of products, territory, and sales team target over a week, month, quarter, or year. So far, so familiar. What’s really innovative is how you can now hold up a lens to your prospective buyer’s market as well. By including fields on demographics, historical purchasing patterns, and shifts in the local economy, you are better able to determine what your prospect may be in the market for.
Getting into the predictive forecasting mindset is also decent preparation for handling sudden and dramatic change. At the time of writing, late 2020, the global economy is still trying to push past the effects of the COVID-19 pandemic. By taking in to account the most unlikely scenario, you can better analyze outcomes for your sales force and supply chain.
Test-Market Analysis Forecasting
The clue is in the title here. For a firm handle on sales forecasting and accurate analysis on how your product is likely to be received ahead of going to market – do some testing and research. Whether this is a focus group piece of market research or a limited product release for a designated area for a time-limited period, you can dive deep into the feedback and use the analytics to either refine product and strategy or if you’re satisfied with the results, press “go” on the sales pipeline process for the product. Market research when performed properly can be time- cost- and labor-intensive (one focus group or one soft launch is not enough to provide a comparative analysis), but if you want to get honest opinions from your potential end-user, it’s advisable to bake this in ahead of a full launch.
Intuitive Sales Forecasting
To trial a forecasting method a mile apart from the two above, the intuitive approach may be right for your business. This is all about trust, instinct, and the opinions of those on the sales frontier – your sales team. You ask them – either as individuals or team leaders – how sure they are they can close a deal and when this is likely to happen. By nature, sales reps are confident creatures so, in all likelihood, they’ll give you a positive answer. They are the guys closest to prospects so will have an idea of how the sales process is going and the present circumstances of the customer, but their inherent optimism and desire to stay on track for compensation may skew the results. We can say that this approach is not data-driven, at least not in the beginning, but first-hand, anecdotal conversations may better inform customer personas – which do hold weight when thinking about sales forecasting. It’s also useful for newer businesses that may not have a great deal of historical data to compare.
Best of the Rest
When it comes to detailing the most useful sales forecasting methods to carry your business into a more profitable future, we’ve only scratched the surface. Lead-driven forecasting and those established models that stick to pure data, statistics, and algorithms still have an important role to play in determining tomorrow’s sales output. What we can state with a solid degree of certainty is that current numbers and past records alone aren’t enough to provide a robust sales forecasting platform. Intuition, customer need, and understanding of possible outcomes are all a vital part of your sales forecasting toolkit.
Take control of your sales forecasting future today by visiting www.varicent.com or talk to your local Varicent specialist and discover the software to boost your sales team’s performance.