How to More Accurately Forecast Sales and Marketing

In today’s rapidly changing business climate, it’s difficult to accurately project revenue earnings and marketing expenses for each month, let alone the next year. Forecasting is a combination of art and science but, with some effort, you can remove some of the guesswork and inject a bit more science into the process.

There are many facets of developing a sales and marketing forecast: competitive reviews, previous sales and marketing financials, knowing what’s in the pipeline, anticipating potential disruptors, etc.  By better structuring processes and using the right tools, you can gain valuable insights into these factors and project your revenue stream more accurately.

Document and Strengthen Processes

Consistency is the foundation of an accurate forecast, and the best way to maintain consistency is through well-documented processes so that everyone involved is aligned and is using the same criteria when managing the sales pipeline. A disciplined approach to processes is necessary, so make every effort to create buy-in from each person involved in the sales cycle.

Depending on the type of industry or customer, your processes may be simple or complex, strictly defined or continuously adapting to shifts in markets or buying behaviors. Using manual processes to document and manage each step of the forecasting process — and each person’s role and which milestones they’ve achieved — is nearly impossible and is prone to inaccurate results.

Using a tool such as Microsoft Dynamics Customer Relationship Management (CRM) software, organizations can create transparency among team members, implement workflows and automated processes, ensure accurate documentation, and provide guidance for key players.

Keep Track in Real Time

It can’t be emphasized enough how critically important it is to update your CRM with the latest sales projections and to implement protocols that everyone is required to adhere to in order to accurately track and analyze sales performance.

Making sure everyone is participating fully is the only way to provide an accurate view of where each opportunity is in the sales pipeline and projected timelines for various sales cycle phases. A software solution can provide the ability to leverage data and analytics shown on real-time dashboards rather than trying to rely on outdated reports and spreadsheets. This leads to business performance being assessed more accurately and decisions being made more strategically.

Many business leaders have been plagued in the past with submitting requests to IT or operations to run detailed reports, hoping they get the information they need in a timely manner. Unlike many software solutions of the past, the mobile-friendly functionality of modern CRMs allow for users to rapidly configure their own customized dashboards and extract the data they need from anywhere with a few simply clicks without having to consult with IT. This not only creates greater efficiencies for those developing a forecast; it also allows IT to spend more time focused on critical functions.

Review Results and Modify

Many businesses have taken on an agile approach to forecasting, allowing for adaptation as markets swing, technology evolves, and customer buying behaviors ebb and flow. Businesses need to be able to shift focus quickly when new opportunities or market challenges come their way, and a CRM system can help business leaders anticipate any disruptors with greater accuracy.

Constant sales analysis can help an organization anticipate which product or service will require additional marketing resources in the next year to fuel growth and which may experience a downward trend and require less human and financial capital. Seasonality also plays a role in many industries, so regularly review the month-by-month projections to ensure all factors are taken into account, and adjust accordingly to overcome any unrealistic projections.

CRM functionality has vastly improved in recent years, so if you’re still operating with a legacy system, it may be time to consider an upgrade to maintain your competitive advantage. It’s estimated that the ROI on CRM is approximately $5 to every $1 invested. A major factor is the enhanced sales pipeline reporting that allows for more accurate sales and marketing forecasts.

To learn more about the features and functionality of today’s CRM, reach out to one of the experts at Wipfli for a no-cost consultation.