Why it is important to build scientifically your sales forecasts

Introduction
I’m sure we all strive to live in a visible future. With the fast changing market, fierce competition and political instability this is becoming a business dream rather than a yearly exercise. This is where a data driven scientific sales forecast that addresses objectively all of the above constraints comes to bridge this gap.
As in life, the more visible our journey, the more we feel at ease. Thus managing your business, you  need to keep your eyes on the horizon to plan your next step, and since sales is the lifeblood of any business, building an accurate sales forecast is a very crucial exercise.
 
Importance Behind Accurate Sales Forecasting
The more the business grows, the bigger the sales management role becomes and the more complex and costly it becomes.
  • Stock and Supply Chain Cost Reduction: By predicting sales patterns, you can more precisely plan for what products or materials you need. You definitely don’t want to miss a sales opportunity because you are out of stock during a busy season and having to scramble or pay extra to order what you need. On the other hand, you don’t want to overstock and have products go bad or have to regain your expenses over a long, drawn-out period.
  • Cash Flow Management: Having a detailed business forecast gives you a strong foundation for making fiscally responsible decisions about your cash flow.
  • Accurate Staffing: An accurate data-driven sales forecast that suggests a 35% increase in opportunities and sales could lead to a sales manager growing his/her team of reps by the appropriate size. All business management decisions should be supported by the growth information within the sales forecast.
  • Marketing Budget: Detailed sales forecasting should help you develop the strategy and character of your marketing strategy. A sales forecast will show you how much revenue you can expect and what kind of money is available for your marketing/advertising budget as well as what return to expect from a certain marketing budget.
  • Better Sales Performance: Sales reps can perform more effectively when supported by accurate data-driven sales forecasts they believe in. The goals set for them by sales managers would be more realistic – as consistently failing to reach inflated goals could be a severe detriment to team morale.
  • Business Strategy: The more you know the potential of your business the clearer you can plan and strategize on how to direct the company. What territory to expand to. What product to shut down. How to better allocate your resources. How to asses the internal and external environments.
Challenges Behind Accurate Sales Forecasting
The difficult aspect lies in accurately considering every quantitative constraint that ranges between the detailed internal sales data, sales organization, competitors, market share and economic growth within the formula. The complexity of understanding the unstandardized and unidentified benchmark is the key to success.
Unfortunately this is where issues arise for many sales-led organizations and thus they end up directed towards subjective and predictive sales forecasts:
  • Creating budgets takes excessive time and efforts, not to mention the negativity of bonds it creates among departments
  • Scientifically set budgets eliminate the fact that most sales managers tend to make low ball estimates of revenues and income for fear of consequences if they fall short for any budgeted target.
  • Lack of benchmarks, performance metrics and clean data available even with an advanced CRM system in place.
  • Lack of discipline required to collect and clean the required data prior to applying any analysis especially in such a stressful fast changing environment.

How We Could Help You

If you are looking to have better visibility of your sales and business potential. If you are looking to build a scientific mindset within your organization and have a better observation and insights about your sales numbers that you could strategize upon, we are happy to come in to aid in developing this process, lead and run objectively the exercise and deploy all tools needed to accelerate the performance by:

  • Examine: Some clients have described our approach to Sherlock Holmes approach towards investigation. We thoroughly analyze your challenges and have a deep understanding of your organization prior to any action
  • Data: Accordingly we define all required data and start the data mining and aggregation exercise.
  • Analytics and Insights: Building up all hypotheses needed to do the required observations. Such scientific advanced analytics will draw a better picture and good insights for better planning and decision making
  • Actions: joining our expertise together to discuss the insights and observations in order to develop together the best strategy, plan and actions required.
  • Results: We continue to execute the set plans that link together people, plan, processes and systems.

What’s Different In Our Approach

Our unique boutique approach towards achieving results and the success of our engagements is based on three key elements:

  • Science into Sales: Coming from an engineering analytical mindset, coupled with our solid sales experience and understanding of the market gives us the privilege to set this analysis apart from common descriptive analysis and some comparative sheets and reports. Such exercise would aid in identifying the root causes of the challenges.
  • Pragmatic Process Consultants: We believe that the best way for us to work for you is to collaborate with you. Thus coming from a third point of view and as process consultants we move in tandem with our clients to collaborate with the entitled people to develop, and build the best fit solution.
  • Discipline of Execution: Companies have been hiring us to work closely with them to achieve results. Such projects’ success or failure could be easily spotted, thus it’s our main interest to “guarantee” results. As such, we follow closely in building up the momentum of flywheel model to insure consistency and coherence until we guarantee the success of the project.
As a boutique sales management consulting firm focusing solely on assisting organization in developing, transforming and optimizing their sales organization, we can further help in any of your uncertain sales challenges, and sales performance optimization.
Feel free to contact us, or directly respond to mazen@logicshape.com.