At one point, sales forecasting was only for large corporations that could afford sophisticated software and algorithms. Now, businesses of any size that don't use predictive analytics risk the chance of losing their competitive edge. Different providers offer sales forecasting software that caters to all types, sizes, and models of businesses. Therefore, owners should review what kind of forecasting software best fits their organization.
The Importance of Sales Forecasting
Sales forecasting enables businesses to predict future demand and sales so they can estimate their potential growth. Understanding these market trends allows leadership roles to create impactful business strategies and improve decision-making. However, owners should understand the two primary types of sales forecasting.
Quantitative forecasting uses current and historical data to generate estimates.
Qualitative forecasting relies on the user's intuition and extensive market research.
Typically, companies use quantitative forecasting to gain more accurate insights into consumer behavior, emerging trends, and future outcomes. This, of course, assumes that the organization already has a history of data collection. Startups and other businesses that lack adequate information may have to rely on qualitative forecasting until they access data. This is a common technique for product launches and innovations that are the first of their kind.
Regardless of the type of sales forecasting an organization uses, it should answer the three critical questions.
What is the expected revenue?
Do the actual sales match the expected sales?
What is the most accurate forecast method?
Forecasting software usually has various models and templates that allow employees to easily plugin and analyze datasets. This makes it easy to determine which method generates the most accurate forecasts.
Forecasting Software Considerations
Businesses no longer have to rely on traditional spreadsheets to manually organize data and estimate forecasts. There are several sales forecasting solutions that provide better insights with less work. However, it can be overwhelming trying to choose which software is best for the company. Therefore, owners should review the various components of different systems to determine which best fits their needs.
Static vs. Dynamic Forecasts
Static forecasts require the actual value of the dependent variable, which isn't always available. On the other hand, dynamic forecasting continuously tests its models to ensure it generates accurate estimates. In other words, it relies on the results of previous, similar forecast results to better its predictive technique. Depending on how much data is available and the timeframe of the forecast, many companies prefer dynamic projections.
Regardless of where the data comes from, forecasting software relies on actual data to make estimates. If owners don't choose their solution carefully, they could be stuck manually entering data fields. Sophisticated software has import capabilities that automatically pull information from existing systems without the need for human intervention.
Sales forecasting requires information from various sectors, not just one or two departments. Therefore, owners should ensure that their solution has integration properties that connect established systems seamlessly. This promotes collaboration between employees and ensures generated insights are holistic.
Even the most sophisticated software is not helpful if its interface is not user-friendly. Owners should test out demos of different software to find the easiest to navigate and use the various features.
Top 6 Forecasting Software Solutions
Now that owners know what elements to look for, it is time to review the top sales forecasting software on the market.
1. Zip Forecasting
Zip Forecasting automates sales forecasts and demand planning by integrating with existing management systems. By accessing data from point-of-sale (POS) and inventory tracking software, Zip Forecasting uses real-time and historical data to improve estimations.
Estimate customer demand to optimize stock levels, avoiding deadstock and stockouts.
Predict sales to improve staff scheduling, limiting labor expenses.
Adjust inventory reorder points to maximize sales, increase profit margins, and minimize stock costs.
This solution even takes weather into account for organizations planning future events. Zip Forecasting also has reporting capabilities that use visual aids, such as graphs and charts, to better explain metrics. These forecasts leave nothing to guesswork, allowing businesses to optimize their decision-making and preparation.
Pipedrive illustrates a company's sales pipeline so they can pinpoint lagging systems and bottlenecks. This allows businesses to determine exactly what areas need improvement to optimize profitability and efficiency. Pipedrive has a live employee dashboard that displays real-time transactions and performance metrics. With accurate insights, management can gauge their progress toward set goals.
3. Adaptive Insights
Adaptive Insights focuses on which initiatives and decisions have the biggest impact on sales. No sales pipeline is straightforward, and owners need to understand exactly what operations they can leverage to drive profits. Managers can use Adaptive Insights to develop what-if scenarios to determine how each case will affect the bottom line. This way, the company can prepare for the worst and optimize systems for the best.
Basic-code is the provider of Sales Analysis and Forecasting Tool, which optimizes companies' inventory while improving forecasting strategies. Businesses can also customize this tool to fit their unique needs. This level of functionality gives companies flexibility and the ability to improve efficiency.
Gong.io visualizes the entire shopper's journey so businesses can comprehend where customer interactions typically take place. Most modern companies use email, text, social media, and other digital platforms to contact customers. Gong.io facilitates this correspondence by organizing each communication outlet in one universal platform. This makes it easy to monitor leads and sales for more accurate forecasts.
Slickpie is software that caters to startups and small businesses that require a robust accounting system with high functionality. This solution combines traditional account services with sales forecasting for an optimized system. Slickpie integrates seamlessly with existing software to access critical data and generate insights.