How to use Forecasting Methods efficiently?

Forecasting methods have been used by people for centuries, to make predictions about anything from weather to fortune. But, in today’s age they could be viewed as key to a fortune telling machine that can depict our company’s sales future from budgets to bonuses. Forecasts are educated guesses that rely heavily on the data provided by us, which, in return helps us make valuable decisions about our company. In inside sales industry, it is the estimate of our sales at the end of a specific time period.

Using forecasting methods to predict accurately is a mix of art & science.

Many of us are under the impression that one needs to have a degree or some training to make a proper sales forecast. It is not true. Forecasting isn’t rocket science; if you are good enough to run a business, you’re good enough to forecast its sales. A good forecast is the one closest to the actual outcome at the end of the forecast period and can be achieved by the soundness of one’s working knowledge of his/her company. The more you know about your business’ strengths and weaknesses, the better you can forecast its growth in terms of sales, revenues, profits etc.

Experience is of paramount importance here. It is the deciding factor in our choice of forecasting methods for our business. Using orthodox methods of sales forecasting like Quantitative, Qualitative and Casual etc. seem pretty scientific, but guess what? They are all useless without keeping in mind some rules to use them properly and practically in a real life situation.

Forecasting Methods

Forecasting Methods prove to be most fruitful when the following rules are followed:

“The essence of a good strategy lies in choosing what NOT to do”

A good forecast starts with the SWOT analysis of one’s business. Here, we identify our strengths and weaknesses and how they would affect our sales. This directs our tactics and helps us work around our strengths to give us a better outcome in terms of sales development using suitable forecasting methods.

“Keeping it up to date”

Forecasting your sales isn’t a ‘one time only’ thing. You need to regularly update your forecast in accordance with the trends in market, fluctuation in prices, stock ups and downs and the forecasting methods used. You should be able to develop a process that is easy to monitor, process and update as per change in conditions.

“Keeping it simple”

Your forecasting methods shouldn’t be so complicated as to involve mathematical expressions or scientific notations. They should be simple so that an ordinary businessman can keep an eye on the forecasting and update it in accordance to the sales stimuli as most of the businessmen aren’t trained statisticians.

“Forecast with your buyer in the mind”

No matter how good your product is or how unique you think your forecasting methods are, the sales process only moves forward when your buyer takes some action. A wise man once said, “If you want to learn how sellers ought to sell, learn how buyers buy,” which is true, as the complete sales process revolves around the buyer’s interest. No amount of forecasting or planning would be fruitful if the buyer isn’t interested. Here, the past information of the buyer is instilled into the forecasting methods to be used in order to predict the sales outcome in a more proficient way.

See Also: Key Performance Metrics To Grow Your Inside Sales
And if there’s one thing forecasting methods teach us, it is:
“Stay hungry, stay foolish”

The final rule of a successful forecast is to never settle for less than what is predicted. Even achieving the predicted target at the end of the term isn’t something to be very proud of. We should always aim higher. If one predicts closing X number of prospects in a term, and ends up closing the same number of prospects, it isn’t a great success. Last minute deals, should be our main focus as most of the times, they prove to be better than expected even though they aren’t a part of our forecasting methods.

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Hasan considers Fileboard his second home and is working here as an inbound marketing expert. He has an academic background in traditional finance; however, his work experience from quite a long time revolves around startups, digital marketing and advertising.