Sales Forecasting ... “Look After The Pennies ...”
This article could go in a couple of directions. Should I bang on about how accurate sales forecast processes pay huge dividends over time (literally) or how they can be used as an early warning system for the company’s health etc.? No, for this one I will stick to saying “Don’t bother putting much effort into them at all”.
Let me clarify that slightly. In previous articles I have talked about the importance of the marketer having a complete understanding of the Customer Journey and how that is achieved by setting simple KPIs. When you have got that under control, forecasting the marketing performance becomes relatively quick and accurate. ‘Sales’ are only one of the KPIs in that process and they are one part of a linear progression. There will be at least two other phases that occur up-stream of a sale (‘Awareness/Reach’ and ‘Research/ZMoT’) and they might be further subdivided.
By concentrating on the quantities and Conversion Rate performance of the up-stream phases, the sales forecasting will almost naturally fall out of the process. In a start-up situation all the forecast data will be pure guesswork and consequently wildly inaccurate but over time and with diligent care of the marketing process, the sales forecasting inevitably becomes very accurate. I.e. By looking after the pennies, the pounds will look after themselves.
Guy Bucknall is a marketing strategist specialising in SMEs and Micro Businesses. Author and host of the Grow Your Own Marketing Strategy course and a co-founder of the micro networking platform Bizmerang.