The saliency of sales analytics in forecasting has not lessened over the past few years – in fact, many recent studies suggest that accurate sales forecasting is more important than ever.

According to research company Aberdeen Group, companies that were consistent users of sales analytics and forecasting tools outperformed companies who did not avail themselves of either of these tools by 1.46 times in the accuracy of their sales forecasts.

How can sales forecasting and analytics help a company?

An even more convincing statistic in the favor of using sales analytics is that companies who use them tend to outperform the companies who did not by 1.3 times when it came to achieving an overall sales quota.

Performance is Clear.

The bottom line is the company’s bottom line – companies that make use of sales analytics in forecasting simply perform better than those that do not. Having more accurate sales forecasts is in high demand these days, both from stockholders and CEOs alike. With the economy as rocky as it has been in the past few years, it is obviously more important than ever to have as clear of an idea as possible as to where the company is going. These forecasts contribute to greater confidence in a company’s abilities.

In fact, having accurate sales forecasts may even be a self-fulfilling prophecy. A company that predicts its sales accurately is more likely to have faith in the forecasts, which can be quite a boon if the forecast is good.

Internal Friction?

However, there has been some hesitance regarding the idea of devoting time and effort to sales analytics within several businesses, as it may seem on the surface that putting too much effort into the forecasts simply takes away from the actual time it requires to do business.

While there is truth in this, it’s not a whole truth – the issue is merely finding a reasonable balance between the amount of time needed to create an accurate forecast without putting so much time into the project that it becomes cost ineffective.

Accuracy in Numbers.

Thankfully, there has been considerable evidence pointing toward the idea that companies usually don’t need to put forth week’s worth of effort in order to get an accurate sales forecast. In fact, according to a different study by the Aberdeen Group, a surprising number of companies were able to produce reasonably accurate sales forecasts in less than thirty minutes. Of course, the exact statistic was as such: the accuracy of sales forecasts when a company put more than thirty minutes into a sales forecast was approximately 72% accurate, while a company that put less than thirty minutes into a forecast was 62% accurate.

Obviously, if you allot more time for sales forecasts, the overall product will be more accurate. However, if you end up allotting two days to a forecast and the improvement is only 10% in accuracy, the amount of manpower devoted to the forecast is hardly worth the comparatively slight increase in accuracy.

Audience Targeting.

And, don’t forget to implement strategic targeting. Any sales analytics or forecasting will not make a lot of sense without the appropriate marketing strategy. Quality sales leads are bread-and-butter to B2B firms. Here’s a way to start that process.

Conclusion

Sales forecasts can greatly help a company when it comes to meeting its quota. However, spending too much time on sales forecasts is not cost effective. The solution? Using sales analytic software to both cut down on the amount of time it takes to produce a forecast and up the accuracy of the forecast.

Resources/links:

Salesforce

Cloud9 Sales Forecasting