When organisations are equipped to extract crucial facts from operational data and then act upon them quickly, the result is often improved selling efficiency and enhanced profits. The good news is that business intelligence (BI) tools necessary to support this data analysis are within the grasp of most organisations.
Effective BI can boost your sales and marketing efforts in nine ways:
- Increase sales using "fact-based" selling tools.
- Build profits by targeting profitable activities.
- Increase customer loyalty and retain customers for life.
- Increase the accuracy and timeliness of sales forecasts.
- Achieve budgeted sales.
- Increase the proportion of high-value customers in your customer mix.
- Reduce low-yield activities in the sales process.
- Deploy higher-yield promotions and advertising.
- Predict future behavior of prospects and customers.
In this article, I'll discuss items four, five, and six on the list (as seen in bold above). My earlier article, "Business intelligence tools are key to building profits," discussed the first three points, and I will cover the last three in an upcoming piece.Increase the accuracy and timeliness of sales forecasts
Information concerning future revenue answers the questions of "what" you're going to sell, "to whom" you're going to sell it, and "when" you will make the sale. When it's accurate and timely, this information has immense business value. The product side of your business benefits by knowing that red widgets, for example, are outselling blue widgets in Florida, but blue leads two-to-one in Ohio. Armed with such facts, you're able to increase sales by putting the most attractive product in front of each customer. In addition, you can increase profitability by optimising procurements and distribution. On the financial side, your CFO loves the reputation of credibility your organisation can gain with bankers and investors who view accurate forecasts as evidence that you're running your business well.
Of course, the challenge lies in actually constructing the accurate forecast. Particularly daunting is the required individual product and customer detail. Most often, gathering this information is a brutal and unreliable process.
The following are the common issues most organisations face when building a sales forecast:
- When substantial facts are missing, forecasts are developed subjectively using different standards. Sales reps are often liberal, if not wildly optimistic, compared with management's conservative posture. Either extreme is costly to the organisation.
- Sales momentum is crippled at budget time, as sales reps and managers waste time dickering over figures when compiling their account-by-account forecasts. All told, the preparation of sales forecasts can sideline a sales rep for weeks each year.
The forecasting burden can be considerably eased and the reliability of the forecast much improved when the right information is at hand to support the underlying analysis. BI tools give decision makers ready access to information that provides a detailed portrait of sales history. Easy and direct access to historical sales information supports both forecast accuracy and better, faster procurement and inventory decisions.
