Are you a finance professional? Or maybe you work in sales? In order to correctly anticipate sales, you need to do a far more thorough study than simply crunching statistics in Excel. Therefore, you need to utilize some of the methods for sales forecasting.
Top 5 Methods for Sales Forecasting
Here are the five best sales forecasting techniques.
#1: Scenario Planning Method
Businesses utilize scenario forecasting as a strategic planning tool for a variety of conceivable outcomes. Additionally, these hypothetical situations are frequently based on known hazards and apprehensive assumptions about a number of conceivable circumstances. In other words, under scenario planning, you brainstorm different circumstances and how they impact sales.
#2: Sales Force Composite Method
The Sales Force Composite Method is a method for predicting sales in which sales representatives anticipate the sales in their individual territories. Then, they are combined at the branch, region, and area levels, and then combined to provide a company-wide sales forecast.
#3: Market Build-Up Sales Forecasting
The market-buildup strategy calls for identifying all possible consumers in each market and estimating the potential value of their purchases. Therefore, having a comprehensive list of possible customers and a reliable estimation of what each will purchase yields accurate results. Also, based on data about the industry, you estimate the global demand, and you apply your estimated market share to obtain your sales forecast.
In lead-driven forecasting, each lead source is examined, a value is assigned based on the previous performance of comparable leads, and a prediction is made using that source value. Furthermore, you may calculate the probability that each lead will become a client who will generate income by giving each of your lead sources a value. Moreover, analyze each lead source and assign a value based on historical sales data from each of the lead sources.
#5: Opportunity stage
Based on where the prospect is in your pipeline, you calculate the chances of the deal closing. Consequently, most companies often divide their sales pipeline into phases like:
- Won or Lost
Furthermore, a deal has a stronger chance of becoming “Won” the further it is in the cycle of phases. In other words, you increase the potential of a deal by its win likelihood.
The Bottom Line – The Methods for Sales Forecasting Are Key to Success
The method you decide to use for sales forecasting will rely on a number of variables, including your company’s market share, the stage of your organization, your business model, the scale of your sales team, the quality of the data, your budget, etc. Moreover, you’ll be prepared to handle any curveballs that may be thrown at you, thanks to sales forecasting.
Finally, you can take my course to learn about more finance techniques and strategies.