Do you need help figuring out what your clients want? Have you noticed some unexpected blocks and slow spots in your sales funnel? Maybe your sales numbers are all over the place, and you can’t figure out why or switch gears fast enough to adapt.
Being able to anticipate a client’s needs is a useful skill for sales professionals, but without proper tools, it’s about as accurate as a local weather forecast.
If you want to know how to improve sales forecasting accuracy, you need to understand the current trends and standards. What are the three main sales forecasting techniques? Which ones are best for your firm? Are there tools to streamline the process?
Settle in for a lesson in SaaS sales forecasting that will have your team feeling right as rain in no time.
The simplest explanation of sales forecasting is a system of reviewing past numbers to estimate future sales.
It’s essentially making projections about your market, your products in that market, and your customers’ needs. You then use those projections to make decisions about everything from marketing campaigns to new products.
B2B sales forecasting is essential for sustainable growth and boosting conversion rates. It gives you a better understanding of your sales funnel and which stages are most effective at conversions based on longitudinal data.
Sales forecasting provides teams with relevant data to make better decisions about future steps and the overall company direction.
Efficient e commerce sales forecasting can provide insights into future product demands, signal potential issues in the sales funnel, and guide more successful marketing campaigns.
When you have more accurate, reliable information about trends and past performance, it’s easier to determine the best ways to allocate your resources, manage cash flow, and handle risk management. It also makes you more adaptable as you can identify problem areas in your sales pipeline sooner and make the necessary adjustments.
Most businesses choose some form of forecasting to boost sales, but it’s especially useful for SaaS firms that need to frequently adapt strategies and products.
Sales forecasting requires a team effort and input from everyone involved in the company. The more relevant data you have access to, the better you can see the big picture and make decisions that benefit everyone.
For example, new product sales forecasting is an all-hands-on-deck scenario that requires input from several departments.
It’s not easy to align so many moving parts, but that’s where a centralised workspace can help. Forward provides teams with a workspace offering real-time collaboration through seamless communication and document sharing.
Sales forecasting drives sales strategies in most industries because it relies on hard data more than intuition and guesses. Digital tools, like Forward, can streamline and enhance the process by automating much of the collection and analysis so teams can focus on more important aspects of the process, such as decision-making.
Do you know how long it takes to turn a lead into a paying client? That’s the point of the length of sales cycle approach to forecasting. It considers the average length of your sales cycle and the likelihood of a rep closing the deal based on where the client is in the process.
The length of sales cycle approach is one of the simpler SaaS sales forecasting techniques, but it can be valuable because of its objectivity. Sales reps can identify their likelihood of success and better determine where to apply the most effort to be effective.
Be aware that this technique requires time and effort. Your sales team needs to be dogged about tracking their process and have a thorough understanding of your client base.
Forward supports businesses with tracking data and providing real-time insights into client engagement so you can better understand their wants and needs. Everyone on your team can access real-time data on how your prospects engage with your platform and the various channels you use.
You can also use Forward's Mutual Action Plans to ensure deals progress at a predictable pace. It’s the best way to structure and streamline your sales journey while tracking each step to identify potential pitfalls early on and head them off.
Using Forward allows you to seamlessly integrate your CRM, making it easier to monitor customer interaction. Plus, the real-time analytics track engagement patterns to identify those prospects that engage most, singling them out for your team to follow up in a timely manner and increase the chance of a conversion.
Time series analysis involves models that analyse data to determine causality, like why customers convert at one stage or another. Teams can use that information to create projections and determine future trends.
This approach relies heavily on longitudinal data and typically requires software to collect, assess, and analyse it efficiently.
Time series analysis is one of the more erratic options because it can be unpredictable. A random fluctuation in sales during October could relate to a one-time event rather than a trend. It’s best to use this technique in conjunction with another one to enhance accuracy.
Forward provides teams with advanced analytics to improve predictability and manage the exorbitant amount of data required for this technique. It aids in monitoring sales, making it easier to perform time series analysis.
Further, the centralised workspace allows all teams access to deal-related information to ensure consistent data input for more accurate projections.
Imagine your team is reviewing data and deciding whether to run a promotion during mid-May because there seem to be a few spikes during that time.
Somebody from another team speaks up and notes that those spikes coincide with a crew attending a conference on each of those occasions. HR speaks up and notes that nobody is scheduled to attend that event this coming May because of the location.
Because the whole team had access to the same information, they were able to figure out extraneous events that impacted the data. The marketing team can table the campaign until a crew can attend the conference again. It remains on the team's radar, but they avoid wasting resources in the immediate future.
Demand forecasting uses data to identify patterns and trends to predict future sales. It’s commonly used in retail settings to estimate product needs for high-volume seasons, like holidays. However, the technique is relevant in several settings if you have sufficient data.
Of all the models, this forecasting approach relies heavily on efficient software, machine learning, and AI because of the sheer volume of data and general complexity.
It’s also important to note that different types of demand forecasting can dig deep into the analytics. Using more than one type provides a more complete picture of your business.
Since Forward offers teams access to a shared virtual workspace, the enhanced collaboration creates a more robust demand model. All teams have access to the same information and can add to it as needed to create a clearer picture of what’s happening.
Having access to that level of information, coupled with managing all deal-related content in one place, ensures a comprehensive understanding of the market demand. The sales and marketing teams can use the information to craft personalised buyer experiences that resonate and reflect a deeper understanding of the target audience.
Have you ever had several customers ask for a specific feature? Maybe several sales reps have fielded requests for a specific tutorial on one aspect of your product. Several things can prevent your product team from learning about that request, which could be a simple but valuable fix.
However, if your entire team has access to that information because it’s all logged, it’s easier to identify those trends and honour that request.
Understanding the different models is only half the battle, you also need to know how to improve sales forecasting accuracy.
You have many options at your disposal, and choosing poorly can derail your forecasting efforts. Before you decide on any models, do some research into a few key areas.
First, consider your market and overall business goals. Releasing a new product line requires different forecasting techniques than expanding to a new market. Make sure you clearly define your target audience and their desires.
Second, embrace top-down versus bottom-up forecasting. This approach requires you to take a step back and review your data from two angles.
Consider detailed information about your sales, including conversion rates and the most effective avenues for new leads. Then, narrow things down to those statistics that support your goals.
Finally, double-check your data to make sure it’s valid and complete. You don’t want to make moves with incomplete or inaccurate information.
Collaboration is key in the virtual sales world. You may have team members all over the globe working toward a common goal, but that doesn’t mean you can’t be on the same page.
With the right tools, your sales rep in America can chat with your marketing manager in Scotland and content creator in Singapore to build a stunning social media campaign. They can all access the same statistics on engagement and view the progress in real-time to complete the project quickly and efficiently.
Digging deeper, your teams can set regular check-ins to monitor the campaign’s success and adjust as needed. This approach fosters continued communication and collaboration to encourage future campaign successes.
Forecasting is not easy, even with modern tools and technology. It takes time to master the models and tools, so it’s best to start slow and simple.
Start with tracking one variable to monitor progress over time and develop a deeper understanding of how the processes work. As you master one model or tool, you can expand your approach to include new aspects, like additional variables.
The danger of taking on too much, too fast, is that you can’t see through all of the data to make good decisions. Your predictions will be erratic and unreliable, which could be catastrophic in some cases, like a new product release.
It’s important to note that every forecasting model shares the same drawback - there may be extraneous factors that can’t be seen or quantified in any reports.
It helps to discuss some of these issues and other important factors, like the country’s economic condition, when considering your numbers. Staying on top of current affairs might seem outside the scope of your job, but it could prevent you from making a grave misstep.
Your team needs the right tools and software to be effective, but how do you know which system supports sales forecasting?
Look for software tools that run robust analytics and allow you to refine the parameters. You need to be able to run various reports with different variables that meet your company’s needs.
You also want to stick with platforms that integrate with systems you already use so you don’t have to waste time with manual entry or worry about lost data.
Finally, ensure the tools support team collaboration and allow for easy communication between parties.
What are the three main sales forecasting techniques? You should easily be able to explain the methods of sales forecasting, what tools to use, and why you should start simple and work your way up.
The right tools can make all the difference in the complex forecasting world. Forward simplifies things for SaaS sales teams by streamlining analytics and reporting while allowing reps to collaborate in real-time.