Too many businesses put too little emphasis on their bottom line. But how could it have been otherwise when new technologies appear at least once a week, and a single social media post can make or break a business? This whirlwind has a single common denominator: it all revolves around people, both clients and stakeholders. Another way of looking at it is it’s all about marketing, and marketing is what guarantees sales, the single thing that defines the aforementioned bottom line.
The second question that comes after marketing is operations planning. Sure, it’s great when a social media campaign comes together, but who is going to package the product? But one thing is certain: nobody wants to talk to an angry client. Nevertheless, these and many other tasks have to be done. Companies use customer relationship management software to track all the little chores that can drive anyone to accept AI gladly. But all big players go one step further and use one or another professional sales forecasting tool in order to go beyond running chores.
Whatever Happened to the Law of Supply and Demand?
Nothing, it’s always been at the core of economics and the single most important concept to understand about sales. What makes people forget about it is the constant barrage of data-driven tools available to businesses today. But no matter how clever and advanced the new tools appear, more and more people purposefully turn away from complicated calculations, graphs, and all things data and look instead at the law of supply and demand.
It goes even further. It’s now a truism that most businesses fail because they try to sell a product nobody wants. The same goes for marketing, where rule number one is to never even think about changing a customer’s mind. Did Steve Jobs create the demand for smartphones – or did he bring the product when the market wanted it, unlike all the failed smartphones of the 1990s? So the demand goes first, and all operations inside a company, or the supply side, are there to meet that perceived demand.
It’s very much different when the supply is created. The task of connecting material inputs, stakeholders’ expertise, and creativity into a single company lie completely on the shoulders of entrepreneurs. All this comes together when a company creates its sales cycle with the help of the time-honored method of trial and error. This is when sales managers get to grips with what the sales pipeline looks like because who could have told what it would turn out to be before it even existed? Once the operation is established, it’s time to plan.
The Weather Tomorrow Is Likely to Be the Same as Today, but Is It True for Your Sales?
A straightforward way to look at sales forecasting is all about planning. It becomes easy only when your company has a few sales behind its belt. This is where computer tools come to play and give the most bang for your buck. On the other hand, if the company is brand new with zero sales to date, and you want to forecast its future, you can try both sales forecasting platforms and cards. There won’t be too much difference because there’s nothing to base the forecasts on.
Once you know yourself, your sales pipeline, and competitors you may not always win, but you certainly can create a sales forecast. The forecasting methodology ranges from more data-intensive approaches, like multi-variable forecasting, to more human-comprehensible ones, like the intuitive method. Here is a list of a few sales forecasting methods, ranging from the data-driven to human-centered:
- Multi-variable, where every symbol is treated like data
- Length of the sales cycle, which tries to put some reason behind the data
- Historical, i.e., the future will be the same as the past
- Pipeline, which focuses on your existing sales pipeline
- Opportunity stage, where you focus on the overall chances of closing deals
- Intuitive, where you simply know best
The human touch of the intuitive forecasting methodology eliminates the need for data and can serve as a reality check. But there is no escaping it: your company generates data whether you’re an IT enthusiast or prefer computers just to work. The trick to make peace with data is finding the software that works best for you.
Pen-And-Paper Forecasting, Anybody?
The Boeing 747, Disneyland, Lego, McDonald’s – what do all these have in common? They were created when sales management was quite shy about computers. Consequently, their sales forecasting methods relied heavily on creativity with pen and paper. Interestingly, the methods did not change much. This simple fact points out that sales revolve around people, both doing the buying and the selling.
For example, when it comes to business chores, sales platforms of today provide their own customer relationship management solutions because that’s what keeps their customers, i.e., the sellers. A step toward data ownership would be a standalone sales forecasting platform for a company.
Sales define the bottom line, and marketing defines sales. Once the business knows what it will sell, sales forecasting can bring value. With the law of supply and demand in mind, businesses can use forecasting methods that suit them best. For example, a highly data-driven strategy can be combined with an intuitive method as a reality check. Lastly, technology doesn’t have to be embraced. It can be simply used, as long as it’s done with people in mind.