The main purpose of implementing a sales management system is to generate and manage sales. Sales forecasting is crucial in the growth of a business. Research has shown that organizations that perform accurate sales forecasting increase their year-to-year income by 10%. They have a greater chance of meeting their sales targets.
Unfortunately, a lot of organizations are still struggling with generating accurate sales forecasts before closing their financial year. It is easier to optimize sales and analytics when organizations adopt relevant sales management software.
Invest in a sales forecasting tool
Doing sales forecasting manually is a tedious process that cannot lack errors. It requires more human capital, time, and money. Your sales team must understand how to do a sales forecast and do it accurately. A sales forecasting tool such as CRM or sales management software is AI-powered to make forecasting predictable, reliable, and accurate. The forecasting tool by Revenue Grid can be customized with sales forecasting templates that make the process easier. It provides automated data capture that captures data, categorizes, and syncs it from multiple sources.
Leverage historical data
Historical data provides a solid foundation on which your sales team can view what will happen in the future. Several factors may affect sales positively or negatively.
- You might release a new product into the market and it drives sales beyond expectation.
- Your company could expand into a new market segment or venture into the international market.
- A new, strong competitor can join the market and affect your forecasted sales.
- A pandemic might strike and it affects people’s purchasing power or cause unpredictable inflation.
More issues can affect future performance even after performing accurate predictions. However, historical data acts like a mirror and accurately pinpoints where your organization is coming from and its future.
Identify revenue leaks and seal them
Your organization cannot achieve its forecasted sales if revenue continues to leak from different areas. One of the main causes of revenue leaks in an organization is errors in data entry and synchronization. The solution is to automate and centralize your organization’s data. Beyond data capture, use revenue intelligence from https://revenuegrid.com/ to help you stop leaks using AI.
Identify and avoid common forecasting mistakes
Sales forecasting is an important asset in an organization. However, forecasting mistakes have a significant impact on a business. Your company might invest more money and human resources than necessary.
The common forecasting mistakes in an organization are over-forecasting and under-forecasting. Whenever your organization over-forecasts, it leads to under-delivery which can have dire consequences for your organization. Under-forecasting leads to over-delivery, which leads to many challenges, such as a lack of enough staff, making hasty decisions, and missed opportunities.
Clean your data
An accurate forecast is determined by the data that is used to create it. The use of improper data gives you a bad sales forecast. Too little data will not give accurate forecasting. You need a large volume that will give you clear trends. It is not enough to load big data and use it in forecasting.
Some of it could be too old, some could have errors, and some might be duplicates. Before you use your data to perform accurate forecasts, ensure it is clean of errors, duplicates, and irrelevant information.
Be agile
Being agile helps your sales team to adopt flexibility that helps them connect with customers at the phase they are in the customer-winning journey. Even after accurately forecasting sales, competitors can offer a better deal that sways customers.
A competitor may close their business, causing an increase in demand by its customers. At another time, a competitor may launch a vigorous sale campaign which can impact your sales forecast. Agility helps your team adjust when the need to adjust comes. Beware of every detail happening in the market and be ready to make changes to your forecast.
Conclusion
Using historical data to transform your company’s sales pipeline can be a complex task. It is almost impossible to do it manually but with sales forecasting tools, the process becomes simplified. Agility will help your sales team to be flexible and adjust as new changes and challenges come into the market.
