Let’s assume that none of us are prophets. We’re great at all kinds of things, like forming connections with others, or refining skillsets to the point of excellence. But when it comes to predicting the future, we can’t do it.
In the absence of fortune-telling in the sales department, we’re left with the next best thing: forecasting.
The value of accurate sales forecasts can hardly be overstated. It helps sales operations leaders determine the most productive quotas and territories and to create incentive plans that best align with strategic objectives.
Authoritative sales forecasts also help sales operations leaders synthesize key performance indicators (KPIs), revenue metrics, and overhead costs to achieve maximum profitability.
Finally, strong sales forecasting enables executive decision-makers to allocate resources with the highest degree of efficiency.
Conversely, the absence of valid, empirically-based sales forecasts creates a host of problems for sales organizations:
- Unrealistic revenue targets damage morale on sales teams, which can be compounded by avoidable backlash from executives
- Sales organizations fail to meet customer demand because of poor distribution of the sales force
- Unexpected expenses and unforeseen incentive obligations create budget chaos
- Sales teams neglect strategic products and services, depleting the bottom line.
Clearly, every sales organization should be focusing on excelling at sales forecasting. But it’s not that easy. For many companies, sales forecasts are time-consuming to create, and often turn out to be inaccurate.
- The key to successful sales forecasting is the ability to create models. Models simulate “what if” scenarios, allowing sales operations leaders and other decision-makers to evaluate outcomes based on potential developments.With strong modeling capabilities, sales operations leaders can create accurate forecasts that integrate existing data, while at the same time retaining the flexibility to adjust to changing marketsBut accurate modeling is too complex to be done manually. To see how your sales organization can build interactive models to implement strategic sales forecasts, try a demo of Obero SPM.