Although many people may think of a sales forecast as just a wild guess or a stab in the dark, it is in fact a cornerstone of any business. It should be budgeted for accordingly; although the cost-effectiveness of a sales forecast is often underestimated, there are many reasons to take this marketing tool very seriously.
At its broadest, a sales forecast is simply a prediction made by marketing, sales and other professionals. By analyzing expected market conditions (including consumer confidence, seasonal purchasing, economic climate, political climate, competitors’ popularity, styles and fashions, and the trending of customer demand), as well as past sales performance, marketing and sales professionals can put together a picture of what sales the company can expect, either in the short-range or the long-range. This helps not only to determine production and supply-chain purchasing, but also advertising and marketing campaigns, price-point establishment, sales initiatives, and customer follow-up. Long-range sales forecasts, in particular, can be used to determine whether the company should develop new products or services, expand new facilities, enter new markets, or engage in long-term relationships with contractors, suppliers or employees.
A wildly inaccurate sales forecast, especially one which relies heavily on quantitative data, can be extremely costly to a company. It can mean the difference between overstocked warehouses or store shelves and sales that are through the roof. In other words, it can make the difference between the company’s struggle to survive and its success.
One of the best ways to achieve accuracy in sales forecasts is by automating your sales force. Sales force automation, which is generally part of a company’s customer relationship management system, is a platform which helps sales and marketing staff record, track and analyze all the steps of the sales process, from lead generation and order management to customer follow-up and long-range sales goals. By automating various functions such as pricing approvals, activity reports, inventory control and presentation generation, sales force automation can free up sales reps to forge strong customer relationships and close more deals.
Another one of the major benefits of sales force automation is sales forecasting and analysis. Automation allows for accurate, up-to-the-minute data that is easily accessed by team members across the board. Custom applications can then make use of this data in order to evaluate sales history and trends, create forecast categories, analyze the wealth of information contained in customer reports, and make projections that can help sales, marketing and production teams coordinate their efforts. In this way, the company may be better able to target the so-called “sweet spot” of product inventory.
More and more companies are turning to enterprise cloud computing as a way to automate and streamline their sales force initiatives. Cloud computing, which differs from traditional software in that it utilizes the Internet, mobile capabilities and shared data centers in order to provide scalable, customizable applications for consumers and businesses, is ideal because it can eliminate the high costs and personnel issues associated with on-premises networks. By moving sales operations into the cloud, an organization can make the administrative aspect of sales much easier and more effective.
Sales applications which utilize the cloud-computing model can be integrated with software and applications that a company already has in place, such as Microsoft Outlook, Word and Excel, in addition to mobile devices such as iPhones and BlackBerrys. Point-and-click configurations make cloud computing simple for any user; everyone from field sales staff to executives has the ability to log in, customize their interface and start viewing and analyzing real-time data,which can be presented in any number of easily understood forms, such as graphs, charts or tables.
Sales forecasting applications can quickly process and generate multichannel data, thereby allowing management and sales reps alike to make smart business decisions. They can also be fully integrated with other critical business systems and customer relationship management applications. Not only can this help increase functionality and streamline processes, but it can also help free up manpower, enabling sales reps to get back to the business of selling.
