SALES FORECASTING FOR LEADERS
Sales forecasting is the process of projecting future sales. An accurate sales forecast helps companies inform they stake holders and make informed decisions on how to plan and allocate budgets, headcount and resources. However forecasting sales is an exercise in managing uncertainty. As such it is both an art form and a science. The Harvard Business Review distinguishes three different ways to forecast sales:
1. Qualitative techniques
Primarily, these are used when data are scarce—for example, when a product is first introduced into a market. They use human judgment based on rules of thumb, gut feel and pattern recognition to turn qualitative estimates into quantitative forecasts.
2. Time series analysis
These are statistical techniques used when several years’ data for a product or product line are available and when relationships and trends are both clear and relatively stable. Unless the data patterns are extraordinarily stable, time series analysis are often stuck in the past and are unable to distinguish more subtle things such as the difference between a long term trend and a short term cycle.
3. Causal models
These types of sales forecasting methods use advanced math to express relevant causal relationships and can sometimes include pipeline or market survey information. They may also directly incorporate the results of a time series analysis. With the help of artificial intelligence techniques, causal models can be the most effective way to forecast sales.
Advances in Artificial Intelligence techniques are bringing the power of causal relationships to an increasing number of sales teams. Cien, an AI-powered sales productivity app, brings all those sales forecasting methods together to help leaders forecast with greater accuracy and precision than ever before.
When making sales forecasts, the Cien App considers:
Cien's approach to sales forecasting means if facts change, the forecast changes. Never be surprised by a bad end of quarter again. Preview the Cien app for free and see how AI can improve your team's productivity.