General
An Essential Guide To B2B Sales Forecasting
Business-to-business (B2B) sales involve selling products or services to another business. This selling category is becoming increasingly popular due to its large market potential and substantial sales opportunities.
Studies indicate that businesses have been more proactive in B2B e-commerce, and as of 2022, the value of transactions reached USD$130 billion. And to improve efficiency, B2B organizations leverage sales tactics, such as sales forecasting. It’s the process of projecting the future demand for products or services. Business owners can make better-informed supply decisions and meet customer expectations by estimating future sales and revenue.
If you provide goods and services to other firms, sales forecasting can help you devise an effective procurement strategy, ensure customer satisfaction, and gain a competitive edge. Read on for a comprehensive guide to B2B sales forecasting:
How to forecast sales
Here are some helpful tips for forecasting sales:
Set your objectives
Goal setting is essential in sales forecasting, as it gives you and your team direction and purpose. You should set measurable, specific, and time-bound goals to anticipate demand correctly. Objectives motivate your sales team to focus on particular delivery actions daily until your end goals are achieved.
Use a sales forecasting tool
Invest in forecasting software to track and monitor your sales pipeline. A sales pipeline includes all prospecting, sales, and marketing efforts that, when implemented accordingly, can significantly boost lead generation and conversions.
B2B organizations today leverage software solutions to improve efficiency in sales forecasting. According to Gartner, IT spending is expected to increase worldwide in 2023, reaching USD$4.6 trillion. Particularly, spending on software solutions is forecasted to grow by 11.3% in 2023.
So, you might want to consider using the best forecasting software like the one developed by Gong. It analyzes data obtained from various customer points of contact with clients, such as emails or calls, to forecast future customer behavior.
Below are several benefits of using sales forecasting software:
- It creates accurate forecasts to yield desirable results. Forecasting software eliminates errors associated with manual processes.
- It facilitates in-depth predictive data analysis through AI algorithms for valuable insights into the future.
- It provides enhanced visibility into your sales pipeline. Therefore, it automates business planning since all the information required for making sales decisions is readily available in real time.
- It can diagnose potential issues in your sales pipeline enabling effective risk management.
Choose a software solution that ensures efficacy in sales forecasting and enables you to grow your revenue.
Select your B2B sales forecasting methodology
The forecasting method you choose depends on factors, such as the size and quality of your sales data. For instance, if you’re new in business, you may not have enough historical data to predict future customer behavior. In that case, you can ask your sales representatives to project the deals they can potentially close depending on the current market conditions. However, it may not be easy to verify such assessments.
Here are other forecasting methods to consider:
- Historical forecasting: It utilizes previous sales records to predict future trends. For instance, you can forecast how much you’ll sell in February 2023 using the 2022 February sales.
- Multivariable analysis forecasting: It uses predictive analytics to forecast future sales outcomes. It also integrates other factors, such as sales cycle length or deal progress for each sales rep.
- Pipeline forecasting: It analyzes different opportunities currently on your sales pipeline and predicts their chances of closing.
- Length of sales cycle forecasting: It estimates when a lead is likely to close based on when it entered the sales funnel.
In that context, picking a method that allows detailed and objective sales forecasting is best.
Include data from other departments
Incorporating data from other departments, such as marketing, finance, or HR, is vital in your forecasting process. Such information can provide critical insights into future sales patterns. For instance, consider how robust social media marketing campaigns may affect future customer behavior.
Keep your sales team informed and accountable
Based on your findings, you should communicate all changes and sales decisions to your sales team, so they can implement them in their daily operations. This is essential, as they’re the closest to your prospects.
Additionally, internal and external factors may impact B2B sales forecasting. That includes product changes, economic conditions, seasonality, competition, and legislative changes. For instance, consumers are more likely to increase purchases during peak seasons. So, for accurate predictions and proper decision-making, you should account for these factors in your sales forecast.
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