In the past, most sales forecasts were the result of educated guesses. When working up a budget for the coming year, a sales manager might have looked at existing client spend and average historical churn along with potential sales on the horizon; then, he or she would come up with supporting figures to determine a forecast. In some cases, someone from the C-Suite may have mandated a five percent increase in revenue across the board with no supporting data to justify it.
Surprisingly, many manufacturers still rely on these outdated methods for determining sales forecasts. As a result, most experience the painful realization that their data is outdated, inaccurate, and incomplete, leading to forecasts that are off by considerable margins — and usually in the wrong direction.
Accurate data is a critical element in reliably forecasting sales. While no one can forecast with 100 percent accuracy, Customer Relationship Management (CRM) software can help considerably by serving as a central hub for vital customer information and data. Not only does it store data, it can serve as a tool for lead nurturing, integrate with Enterprise Resource Planning (ERP) systems, and provide precise and accurate sales analytics and reporting capabilities to extract data in meaningful ways, leading to better informed forecasting decisions.
Here are 7 ways that a robust CRM solution can improve sales forecasts and provide a positive impact on an entire enterprise.
1. Sales Forecast Reports
The reporting capabilities of today’s CRM solutions are vastly superior to systems of the past. Modern systems go beyond data storage and provide reporting capabilities that aid in forecasting sales. Each member of a company’s sales force can see how he or she is tracking against quotas in real time, allowing for adjustments in selling strategies.
Rather than constantly looking back at a sales team’s performance on a quarterly basis, sales managers can run reports at any time to reveal opportunities for improvement or identify where additional resources can be leveraged to help close a deal. These insights can encourage collaboration among teams and prompt faster revenue growth.
2. Higher Quality Sales Leads
Many a salesperson can tell the woes of trying to follow up on “leads” generated from a trade show booth or lists purchased from questionable sellers. Most contacts generated from these antiquated models for lead generation are unreliable at best and unethically obtained at worst in the case of some list purchases.
Modern-day CRMs allow for higher quality sales leads as a result of digital marketing functionalities built into the systems. Automated workflows can trigger alerts for follow up, send targeted emails, and more. CRM combines the efforts of sales and marketing to attract, qualify, and nurture leads. Sales and marketing can monitor a potential client’s engagement with the company’s website or email campaigns and provide invaluable insights into pain points and interests, informing sales of important touch points to cover in conversations.
3. More Upsell Opportunities
As your company develops new products or possibly even acquires a new division, it’s important to keep existing customers informed. Rather than sending a generic, impersonal email to everyone on a list, a CRM system can filter contacts based on highly targeted data to facilitate more personal correspondence.
For example, a report can be run to extract a list of customers in a targeted geographic region who made a purchase of Product X exceeding $10,000 in the last six months, along with any corresponding service notes or touch points so that sales can better facilitate new revenue opportunities within that segment and determine how best to interact with them.
4. Better Production Forecasts
As sales forecasts improve, so too will the forecasts for other areas within a manufacturing facility. From inventory levels and delivery schedules to capacity planning for workers; having a better grasp on what a facility needs in terms of production output relies heavily on a salesforce’s ability to get orders placed and to know that they can be filled on time.
CRM can simplify reporting and work in conjunction with ERP systems to keep communication open between sales, production, finance, inventory, and other departments, saving time and improving order accuracy.
5. Track Assets
Once a sale is made, a CRM can track and manage products and link them to their current owners. If an update is required for a specific part number, for example, a report can be run and the data can be shared with service and tech support teams allowing them to proactively service clients. A service representative can even search items by serial number and link assets to a service ticket. The service history for each sold product can be filed and viewed in the customer’s record to improve outcomes, reduce wasted time researching previous issues, and increase customer satisfaction and retention.
6. Improve Sales Productivity
Sales management can make strategic decisions based on accurate reporting. CRM reporting tools can analyze sales results compared to past performance and track team productivity. Transparency within each record can help sales leaders understand why a deal was lost or gain insights into where a breakdown in communication may have occurred, providing more accountability and incentives for improvement.
Sales funnel conversion rates can also be viewed to track performance and better determine which deals have a better probability of closing, and when. It can also show which types of deals are most profitable and worthy of greater emphasis in the future.
7. More Accurate Quotes
When data is combined between a manufacturer’s ERP system and its CRM, the potential impact cannot be overstated. Sales not only can view historical customer data to understand past purchases, but they can also view production’s available capacity, inventory levels, potential supply chain issues, other orders in the queue, and much more.
When a sales rep is fully aware of production capacity and other factors, sales quotes and timelines can be given with much more accuracy. Sales reps no longer have to make promises based merely on past performance and hope they can deliver. They can provide quotes based on current supply costs, capacity, and other factors. Integrated CRM and ERP systems can even be accessed remotely via mobile devices to provide real-time data and reports to drive more informed decisions.
Overly optimistic sales forecasts have plagued many manufacturers in the past, leading to excess inventory and lost capacity. Meanwhile, conservative forecasts can lead to backorders, excessive overtime, skyrocketing costs, potential lost deals, and a tarnished reputation because of unfilled orders. A CRM solution can help mitigate the risks of inaccurate sales forecasts and give your sales team the tools they need to succeed.
See what a customized solution can do for your enterprise by contacting a CRM expert at Wipfli today.