Strategy of any firm must incorporate an accurate sales forecasting. Doing so helps with resource allocation decisions and setting attainable goals.
However, inaccurate sales forecasting could cost your business significant money. We will explore some common sales forecasting mistakes that can wreak havoc and provide strategies on how to prevent them.
In this article we will also look at specific scenarios which have led to such errors occurring and provide advice on how you can avoid these costly mishaps in sales forecasting.
Sales Forecasting Mistakes:
Here are some sales forecasting mistakes:
1. Ignoring Your Sales Historical Data
Neglecting past data is one of the most serious forecasting blunders in sales. Past sales trends and patterns serve as excellent predictors of future success.
Insights from your sales history can indicate significant trends, tendencies in consumer buying behavior, and metrics that are highly predictive of future sales outcomes, unless you are starting a new company or have fundamentally changed your product offering, sales, or marketing techniques.
You can spot seasonality, cyclical tendencies, and market changes by looking at historical data. Missed chances and erroneous estimates can result from ignoring this important information.
2. Making forecasts based solely on intuition
Gut instincts about the future and emotional responses to sales trends are not accurate predictors of how well you will do in sales.
In the end, relying on your emotions—whether they are favourable or negative—is just guesswork. Instead than using quantifiable facts and concrete evidence of consumer behaviour, it depends on emotions.
A prediction based on data, trend lines, and other empirical evidence will always perform better than one based on hunches and other emotional indicators, even though no amount of data or proof will allow you to do so.
3. Being Isolated At Work
In order to improve contact centre forecasting, ensure your planning teams interact with all departments within your company.
By streamlining communication processes between them and sales and marketing departments, sales will stay informed about planned promotions and advertising campaigns while agents will be ready to address new enquiries as they arrive.
4. Not Taking Outside Factors Into Account
Numerous external factors, like the state of the economy, developments in technology, and modifications to legislation, have an impact on sales projections.
Predictions may be incorrect if these elements are ignored. Keep abreast of market news and adjustments to include pertinent outside effects in your forecasting models.
5. Failing To State Your Buying Stages
Before deciding to acquire a product or service, your customer often goes through a number of different stages. Typically, these phases fall into the categories of awareness, appraisal, and purchase.
Each of these phases may involve several sales contacts and engagements with your brand, whether through phone calls, emails, and in-person meetings, or through content marketing and resources like webinars, product demonstrations, whitepapers, and videos.
It is crucial that you recognize these stages, the accompanying milestones, and the consumer behaviors that signal a change from one stage to the next, whatever the exact touch points for your organization may be.
You will be better able to predict customer behavior and final outcomes in your sales forecast as a result of having a better understanding of your sales cycle and how it affects results.
6. Seasonality And Trends Are Not Taken Into Consideration
Neglecting to take trends and seasonality into account is another typical mistake in sales forecasting. The majority of firms experience high and low periods when their revenues surge and then sag for a while.
Sales can also be impacted by market and seasonal trends. Sales estimates that don’t take these factors into consideration can be outrageously incorrect.
For instance, if you manage a summer-only seasonal business, you must factor in autumn and winter slowdowns in your estimates. Otherwise, your forecasts will be very wrong, which could cause you to make bad choices or not be at all ready for the low season.