Sales forecasting is the very lifeblood of a business. Relying on manual forecasting to do the job exposes it to a series of pitfalls including inordinate delays as well as skewed and inconsistent results owing to personal bias and flawed human judgment. It is, therefore, not surprising that research and consultancy services major Gartner found that only 45% of companies are able to achieve more than 75% accuracy when it comes to forecasting their sales pipeline. Premier cloud-based software company Salesforce renowned for transforming business technology, on the other hand, came out with a report that suggested that accuracy for a business improves only at the closing stage. That points to the fact that in most cases sales forecasting done in the earlier stages of a business is nothing better than a shot in the dark, based mostly on false assumptions or speculation. As the opportunity reaches maturity one’s initial predictions mostly prove to be unfounded. Reads like a familiar script?
Well-defined and delineated pipeline stages, also known as the opportunity stages form the bedrock of the accurate sales forecasting process. The weighted value assigned to each stage of the pipeline differs according to how far down these are in the sales pipeline. It follows that the later the stage (and the closer one is to concluding a deal), the greater the weightage attached to it. For the most part, a sales pipeline comprises the deals your team is currently working on. That means that depending on the length of a particular sales cycle a sales forecast is good for only 2 to 6 months of the pipeline as it is likely to taper off after a few months.
Inaccurate and flawed forecasting can lead to serious consequences for your business
Inaccurate sales forecasting can cost your business dearly. When done right, sales forecasting empowers businesses to efficiently deploy resources to fuel growth. However, if you make a hash of your sales forecasting, you may actually send your business hurtling down the path of ruination. For instance, predicting lower profits will lead a business to undervalue itself and thereby miss out on growth opportunities. Inversely overstating the profits can lead to higher tax liability.
Inaccurate sales forecasting can lead to a dismal performance on the part of a sales team on account of a much lower-than-necessary target or an unrealistically high one. This can only spell disaster for a business with regard to its achieving its projected revenues. Moreover, poor sales forecasting can lead to a host of additional problems like increased expenses, frequent delays, quality issues, a breakdown in client relations, demoralized team members, and a loss of trust and goodwill amongst the clients and the employees. The inability to foresee spikes or troughs in demand can cause undersupply or oversupply of inventory which can be very dangerous for a business.
Automation, Data Analytics and AI - The Drivers of New Age Sales Forecasting
Using AI-powered predictive analytics for sales forecasting imparts high-quality data-backed credibility to sales forecasting. AI helps leverage historical trends and data on future sales prospects to empower your sales team to take calibrated and well-informed decisions that prove to be a catalyst for incremental growth. Here’s how you can do that
Using Historical Data: Historical data can be very efficiently used to zero in on trends and patterns that can help you accurately identify future sales, thereby significantly enhancing your ability to forecast sales with a fair degree of accuracy. A good example of this is analyzing past sales data to discern seasonal behavior trends or patterns exhibited by customers.
Predictive Analytics: Predictive analytics can help discern patterns of customer behavior with the help of machine learning algorithms that help analyze enormous amounts of data from multiple sources like your CRM system, social media platforms and website analytics tools thereby empowering you to predict future sales with a great degree of accuracy.
Rolling Forecast: A periodic updated rolling forecast reflective of the way your business's market evolves can help you to come up with workflow management solutions that enable you to create custom reports and dashboards that shed light on the performance of your sales pipeline.
Teamwork: A digital workflow is greater than the sum of its parts. You just cannot get sales forecasting right if your sales team is not in the loop. Their keen insights into how their customers behave and the prevalent market trends are a great help in making more accurate forecasts.
Did You Know? |
|
|
|
Workflow Automation Aided Sales Forecasting Across the Board Benefits to a Company
Manual data collection can be terribly time-consuming and very expensive for a business. Workflow automation can help enhance the bottom line of a company, apart from providing value to those who do business with it. Automating repetitive tasks like data entry enhances the accuracy of data as well. Workflow Automation empowers organizations to achieve faster freeing up the teams to focus on tasks that add real value. Let us look at these benefits individually,
Better Inventory Management: Accurate sales forecasts enable a business to maintain optimal inventory levels, thereby minimizing the risk of overstocking or running out of stocks. This directly results in a healthier bottom line by way of reduced costs and improved customer satisfaction.
Improved Resource Allocation: Accurate sales forecasts enable a company to deploy its resources more efficiently by helping it zero in on areas where investment needs to be increased or decreased. This again results in reduced costs and better profitability.
Better Sales Productivity: Workflow automation leads to an increase in output on the part of the sales team because it helps make sales forecasts more accurate, giving them a competitive advantage in the market. Moreover, accurately captured and tracked sales data reduces pipeline deviation, thereby helping the entire organization perform their tasks in a focused manner resulting in a healthy sales pipeline.
Clean and Lean Workforce: Work automation helps build consistent workflows bringing the entire sales function together across product categories. Clean and lean sales workflows are easier to build, track and maintain. This helps reduce biases that may occur when every team follows a different process.
Fewer Errors: The deployment of automation, analytics and AI helps minimize errors that are common in a manual system. This is because this can help automatically analyze and capture data in disparate systems with minimal to no manual intervention.
Better Onboarding: Workflow automation makes the customer onboarding system seamless, friction-free and more efficient. That helps free up your sales team to be deployed for other high-value activities that are better handled by people instead of computers.
Enhanced Customer Satisfaction: Accurate sales forecasting provides product teams with the wherewithal to determine their customers' needs in the best possible manner, enabling them to design, create and strategically position products and services that address those to the T. Doing so helps significantly enhance customer satisfaction leading to much higher chances of long-term retention of clients.
How to choose the right Workflow Automation solution for your business? |
We have written a comprehensive guide to help you choose the right solution suited for your business. |
 |
Zime is a global systems integrator and solutions partner to leading digital transformation vendors. We help our clients ranging from startups to large enterprises automate their manual processes by implementing digital workflows.
Give us a shout if you need help evaluating solutions that help enhance customer relationships and grow your revenue and bottom line exponentially.
Summary:
Workflow automation has a profoundly beneficial impact on sales forecasting as it helps automate critical salesforce tasks like data entry, contact management, appointment handling, inventory oversight and customer outreach. Sales forecasting involves the use of tools that use historical and real-time data to forecast short-term and long-term sales estimates. Workflow automation platforms help businesses to streamline their sales processes, thereby making the sales forecasting process more accurate.
Leveraging digital workflows does indeed infuse magic into sales forecasting by delivering accurate sales forecasts regularly. That is nothing short of revolutionary for a business, as it helps achieve revenue predictability that can help it achieve extremely impressive growth.
Source:
(1) Sales Pipeline Forecasting: A Step-by-step Guideline | UNext. https://u-next.com/blogs/strategic-sales-management/sales-pipeline-forecasting-a-step-by-step-guideline/.
(2) A Simple Guide on Pipeline Sales Forecasting and How to Effectively .... https://www.akucast.com/forecasting/a-simple-guide-on-pipeline-sales-forecasting-and-how-to-effectively-implement-it-into-your-business/.
(3) Pipeline Forecasting - a step-by-step guide - QuarterOne. https://www.quarterone.com/blog/pipeline-forecasting-guide/.
(4) Top 3 reasons why Sales Forecasting Fails and what can be done. https://www.performancecanvas.com/top-3-reasons-why-sales-forecasting-fails-and-what-can-be-done/.
(5) How to Achieve Sales Forecasting Accuracy : LeadFuze. https://www.leadfuze.com/sales-forecasting-accuracy/.
(6) A guide to sales workflow process to increase your profit - PandaDoc. https://www.pandadoc.com/blog/sales-workflow-process/.
(7) 10 Benefits of Salesforce Workflow Automation | Salesvue. https://salesvue.com/10-benefits-of-salesforce-workflow-process-automation/.
Comments