Predicting the future is difficult, as everyone who has ever put a sales forecast together knows all too well. It’s important: Sales are the lifeblood of a profitable business and it’s difficult to make informed decisions without a good read on what’s in the pipeline for the next quarter. Which customers should the team focus on next? What territories need more resources? What’s the right product price?
An accurate sales forecast provides vital information to answer these questions. But there are many challenges that must be overcome to create accurate forecasts. One obstacle is lack of collaboration among key players, such as finance, sales, sales operations and product teams. Another is error-ridden, inconsistent or manipulated data from spreadsheets, which also tends to inhibit collaboration as well.
In the coming year, look for more companies to adopt connected sales planning approaches, which will result in more accurate forecasts. The most successful forecasts in 2018, and the years to come, will include the following qualities:
- Data-driven: Forecasting will become more data-driven in the future as companies put predictive analytics and machine learning to work to counter subjectivity and bias. This approach will also have the advantage of being more forward-looking than traditional forecasting methods.
- Collaborative: More people will be involved in the forecasting process in years to come because data will flow in from multiple business units to inform forecasts. The most valuable data will typically be from front-line teams and FLSMs (front-line sales managers) who are familiar with current market trends and have the pulse on the needs of prospects and customers.
- Multifunctional: As forecasters adopt a connected sales planning approach, they’ll have the advantage of access to multiple views from a single platform. This will enable them to better assess performance by rep, region and company and align business functions.
- Trend-aware: Often, sales forecasts are seen as snapshots in time. But introducing time as a dimension can bring patterns and context to the overall health of the sales pipeline — and result in a better forecast. Identifying the selling styles of sales professionals (sandbaggers, stretchers, etc.) can allow organizations to more accurately predict future sales results.
- Real-time insights: With data flowing into a central platform and updated instantly, forecasts will be based on real-time insights. This will allow decision-makers to implement course corrections as needed, coach sellers to focus on those indicators that move the needle and update forecasts as markets and demands change.
These trends have already emerged in the sales forecasting space, but look for them to grow stronger in 2018 and beyond as companies seek new ways to overcome the challenges of forecast accuracy. With a connected sales planning approach, sales leaders can generate forecasts based on insights gained from their business unit, as well as from colleagues across the enterprise; and base forecasts on data, not guesses.
Research shows that companies that use better forecasting processes tend to outperform their competitors. They understand what drives their business and are more agile in responding to changes. As 2018 unfolds, keep an eye on these five forecasting trends — look for them in the forecasting technology and practices of the year’s most agile and successful companies.
Jason Loh is the Global Head of Sales Solutions at Anaplan, where he has responsibility for the sales performance management and sales effectiveness line-of-business. With 20 years of experience across sales, product marketing, consulting, development, and general management responsibilities, his mission is to help organizations align technology with behavioral economics and data science in order to maximize sales performance.