Accurate sales forecasting has long been viewed as an art rather than a science by many Sales Managers. All too often the same approach is utilized for every situation and the results speak for themselves, over 60% of forecasted sales do not actually materialize. This causes companies to generate inaccurate and misleading sales forecasts which in turn impacts on the performance of the organization. The knock-on effect can leave the finance, operations, purchasing and production departments in the dark as expected revenues are not realized and inventory levels remain high. Theoretical models and concepts can assist the manager and are useful tools, however these generic approaches have proven to be of little assistance to most organizations.
So how can forecasters accurately and confidently predict sales volumes? The key to unlocking this age old problem lies in a total approach technique that enables concise and reliable forecasting to be achieved. Elements of this approach require the Sales Manager to liaise closely with the marketing department and be aware of upcoming initiatives and campaigns, lead flow and lead values must be accurately collated and the sales cycle for each product or service thoroughly understood. This will enable the Sales Manager to begin to formulate and craft the most appropriate forecasting technique bespoke to the organization. Ultimately, forecasters must clearly understand the complex circumstances of their organization, the industry in which they compete and the strengths of their own business in order to assemble an appropriate and effective forecasting technique that is consistently accurate and reliable.
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