Can you actually master sales forecasting with helpful automation?

Knowing how much money your business will bring in, when it is due, and what profits will remain after a certain time period is absolutely crucial in order to manage your cashflow and the health of your business. Sales forecasting is an incredibly useful tool to help you manage this, and in recent years the process has become highly affected by the strategic use of automation. In this article we are going to look at exactly what sales forecasting is and why it is crucial for business. We will then compare traditional methods versus automated forecasting, and how the combination of Artificial Intelligence (AI) and automation can further improve accuracy. We will then finish off with the key metrics you need to track when forecasting sales, and some helpful hints on the tools you need to make this happen.

What is sales forecasting? Why is it important to business?

Sales forecasting is a strategic approach that involves using data, often from multiple sources and / or different periods of time, to determine what was happening in the business and with the sales.

This information is then evaluated against current information, and trends, patterns, and opportunities are identified.

Sales forecasting involves taking this data, making predictions and strategies, and directing the business forward based on the results. Of course, as with any activity that involves trying to foresee the future, it is not always 100% accurate, but with the right tools and processes, businesses can significantly benefit from the results.

With the right approach and application of sales forecasting, the process is important to businesses because it allows for the ability to:

• Gain a deeper understanding of customer behaviours and preferences, which, with the aid of an appropriate Customer Relationship Management (CRM) system, can be noted and used in real-time for both sales and marketing needs.
  
  
• Identify realistic targets, goals, and achievable sales quotas which can be determined on a wide scale, ranging from individual performance plan, to team and company-wide options.
  
  
• Refine budgets and financial planning based on specific times of the year, customer behaviours, and predictable market variables, as well as investigate any dips or lulls which may need a different marketing or sales approach.
  
  
• Improve inventory management and ordering / manufacturing with a view to reducing dead stock or wasted assets and ensuring that items are available as required (such as those which see regular seasonal increases, for example).
  
  
• Identify potential risks, emerging markets, opportunities for new customer growth and identification of new demographic interest.
  
  
• Determine competitor actions over a specific period and learn both from their successes and any mistakes which could be potentially costly should they be repeated.

Traditional sales forecasting often took considerable time and effort, and needed a concerted effort to ensure all the data was available and in a usable format. Most modern sales forecasting is now conducted using high-tech software, integrated systems, and large-scale (big) data.

When you handle your sales forecasting, TEB can help you with a powerful digital solution. The TEB platform has inbuilt analytics, flexible reporting and visualisations, and the ability to keep your CRM aligned with your findings. When you use TEB to stay on top of your lead activity, you can be certain that every bit of data can be used for your sales forecasting and future development.

Traditional vs. Automated Sales Forecasting Methods:

Sales forecasting was traditionally handled with experts collecting certain datasets, and using time-consuming, and often difficult to navigate, spreadsheets and such formats to compare data and evaluate certain areas.

With automated sales forecasting, the infrastructure lays behind the scenes of the business, and is constantly gathering the data, sorting it, and making it available in a usable format.

This means that whether you want to look at the last month, three months, or five years – if you have automation in place, and the program has access to that level of historical data, you can manage your review with a few button clicks.

In terms of traditional vs modern sales forecasting, there is not really much difference in the overall approach, methods and varieties of technique available. The main differentiator is largely the savings in time, resources, project development, and budget that come with Business Process Automation (BPA) handling the action.

How AI and automation can improve sales forecasting accuracy:

Sales forecasting does need to be set up with reliable data and infrastructure in order for automation and Artificial Intelligence (AI) to be useful, and it is vital that this stage is not forgotten or underdeveloped – without a robust architecture and accurate information, the forecasting will not be accurate.

Once this is in place however, modern tools like BPA and AI can revolutionise data forecasting by:

• Generating a reliable standard and unified baseline to work with.
• Reducing the number of errors which come from manual forecasting activities.
• Ensuring datasets are entered correctly and not repeated from different sources.
• Allowing for accurate overall data collation, storage, and usability.
• Ensuring data protection and data security is of a high standard which meets legal, moral, and ethical obligations.
• Offering real-time analysis of data from varying periods or business areas.

Having data-driven opportunities and the right infrastructure in place is allowing busineses to be more flexible in how they make use of the massive amount of information they gather on a regular basis.

With the right level of CRM support, team management, and customisable workflows, businesses are able to very quickly act on the information they find, and can fine-tune their forecasting in a way that is significantly more impactful and comes with less damaging consequences when handling unforeseen market changes.

The key metrics you need to track for successful sales forecasting:

Sales forecasting is only possible when you have the right data and a way of evaluating the results.

Key Performance Indicators (KPIs) need to be established ahead of time so you can consistently and reliably evaluate your data and be able to accurately forecast your sales.

With this in mind, some of the most important metrics that you should be tracking include:

• Overall sales
• Win rates
• Price changes
• Amount and value of refunds
• Deal sizes (average)
• Sales cycle length (average)
• Cost of selling
• Engagement rates
• Conversion rates
• Total revenue
• Cancellations and returns
• Customer Acquisition Costs (CAC)
• Customer Lifetime Value (CLV)
• Percentage of revenue from new business
• Percentage of revenue from existing customers
• Market penetration

There may be other metrics that will be important to your forecasting, but that will largely depend on the size, scale, and activities of your business. It is important that you have a deep understanding of your business, your customers, and the needs of both in order to monitor and record your metrics appropriately.

5 Quick tips to make choosing automated sales forecasting tools easier:

Sales forecasting with strategic automation does rely on having the right tools and infrastructure in place, but once you have this – the benefits can be enormous.

In order to help you make these game-changing decisions, we have put together five quick tips for choosing your sales forecasting and automation tools:

1. Look for a service which offers third-party integration and has room to grow.
   Technology, especially in AI and automation is constantly evolving and being applied to different areas of business. When choosing a provider, it is far better to look for one that is capable of meeting your existing needs and developing with you to grow.
   Third-party integration is also vitally important as there are going to be times when you want to collect, evaluate, or monitor data from outside sources, and your tool needs to be able to cope with that.
   
   
2. Evaluate the tool for performance and what is being offered
   Some platforms may seem like great value for money but have very limited options on what automation is available. Others may have absolutely everything, even the things that do not need or should not be automated.
   You need to find a careful balance.
   Be strategic and honest about your company needs, and where your automation should be implemented. Remember, just because something can be automated does not always mean it should!
   
   
3. Check the costs and look at what you are actually getting for your budget
   Some tools may seem to be great value for money, but on closer inspection there may be key functions and essential services which are locked behind paywalls. Others might have set limits on the number of automated processes, or do not support certain options without further costs.
   It is important that you look for tools which are open, honest, and up front about what is supported, what can be supported, and how much the costs will be initially and whether there are any additional costs over time.
   
   
4. Determine whether the tool/s work with your structure
   You need to look at more than just the initial structure and whether the program works with your needs.
   When evaluating the tools, you also need to check what formats and file types are supported (and that they are compatible with your company), and how the structure of the data collection and analytics works.
   Remember, sales forecasting tools are going to be monitoring, collecting, and reviewing all of your most sensitive data, so it needs to be done in a way that works with your business and the structure you are using.
   
   
5. Check carefully for data security options
   Sales data is often some of the most sensitive data that your company deals with, and you have legal, ethical, and moral obligations to ensure it is handled correctly.
   When choosing your automation tools, they need to be reliable, secure, and ensure that there are settings and functions in place to ensure only the right people are allowed to see specific content.

Getting your sales forecasting right with strategic automation does rely heavily on having a data-driven and robust infrastructure. However, as modern business is being pushed forward by technological innovation, it makes business sense to be implementing these core applications and developing a futuristic strategy that will allow you to develop and grow.

Make sales forecasting simple with TEB

You can completely simplify and streamline your sales forecasting with the future of business automation and CRM for the AI age, TEB.

• Highly flexible and customisable reporting – With just a few clicks, you can turn your data into relevant reports, showcasing exactly what you need for your tasks. With visualisations also available, you can be sure that your forecasting will be clear and easily understood.
  
  
• Kanban-style data pipelines – Providing you with safe, secure and reliable infrastructure to get your data from its source to a single unified storage solution. With high standards of data protection and security as standard, you can be sure your data is always ready.
  
  
• Target analysis – Ready to take your data to the next level with specific deep-dive capabilities, allowing you to make the fullest and most comprehensive use of every bit of data collected.

Bringing TEB into your business allows you to make a game-changing difference to the way in which your company operates. Minimise errors and inefficiencies and maximise performance and profits in a way that no other platform can come close to matching.

Book a demonstration with our experts today, and find out for yourself how TEB can make your forecasting more accurate, reliable, and ready to boost your business in a sustainable, profitable way!