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May 7, 2015
Burned By Missed Sales Forecasts? Here’s How Predictive Analytics Can Help
By: Aaron Bartels
You know that your sales forecasts are important to the health of your organization.
You also know that your forecasts are important for making critical decisions.
Everything from staffing to to training to investments relies on your sales forecast and the validity of the information.
The problem is that most sales forecasts are riddled with poor assumptions. Worse, forecasts can reflect “emotion” rather than a fact-based evaluation.
Can you trust your forecast? If not, consider implementing predictive analytics in your forecasting process.
Predictive analytics promises to improve your forecasts by using “big data”. Forecasts based on predictive analytics remove emotion from the forecasting process enhancing the credibility of the forecast. It also helps you identify ready to close opportunities hidden in your current pipeline.
In today’s post we’ll review the benefits of predictive analytics and how you can apply it to your current sales forecasting process.
Getting Comfortable with the Numbers
How can you make sure that your forecast numbers are valid? Typically, you have three options:
You need something more than best guess and intuition to predict customer behavior.
Your forecast numbers will be driving the year-end income targets and marketing budget adjustments. You need something more than best guess and intuition to predict customer behavior.
What’s So Special About Predictive Analytics?
Predictive Analytics is taking the historical performance of the business and applying available data points. These calculations determine what’s going to happen with the pipeline in the future.
What about gut feelings and intuition? While gut feelings and intuition result from actual numbers, those squishy numbers can be affected by the mood of the day or the last closed transaction.
Predictive analytics starts with history and applies known data to produce a valid forecast.
Predictive Sales Analytics: Four Factors
So where do we get the data to calculate a forecast using Predictive Sales Analytics?
Try this:
Predictive Analytics requires a clear sales process to be effective. Before you implement a solution map your sales process.
We recommend focusing on your “Big Deal” process first. Use our Big Deal Strategy tool to inspect your process and uncover potential problems and bottlenecks. Use the information from this review to better target your predictive analytics implementation
Go ahead and download the Big Deal Strategy Tool here
Applying Predictive Analytics: Tools and Challenges
The small number of large deals in B2B pipelines limits the available historical data.
Even so, the data will be more valuable because:
Best practices calls for automating as much history and data as possible. Look for solutions that will make the job of predictive analytics easy to use, such as Client Relationship Management systems.
If you haven’t rolled out a CRM solution, you may need to start with a manual process. Make sure the process is well documented and put all of the data in one place.
Finally, make sure you have a team onboard that supports predictive analytics. Ensure they are tagged with responsibilities accurately and processes are documented and applied consistently.
Imagine a quarter-end forecast using predictive analytics. No insomnia. No nail-biting. No justifications using gut instinct. Just a powerful tool for predicting future results that everyone can rely on.
He founded Sales Benchmark Index (SBI) with Greg Alexander and Mike Drapeau to help business to business (B2B) leaders make the number. The world’s most respected companies have put their trust in and hired SBI. SBI uses the benchmarking method to accelerate their rate of revenue growth. As an execution based firm, SBI drives field adoption and business results.
His clients describe him as a consultant who:
“Makes transformational impacts on me, my people and my business”
“Solves my most difficult problems that to date we have been unable to solve ourselves”
“Brings clarity to an environment of chaos”
“Has real world sales operations experience making him qualified to advise us on a variety of sales and marketing challenges”
“Is able to spot proven best practices that once implemented will make a material impact on my business”
“Constantly challenges status quo and compels us to act”
“Focuses on execution and driving change to stick in our environment”
“Makes good on his promises while enabling our business to realize his projected results”
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