No sales, no business. When you launch or consolidate a new venture, you will likely hear that a business plan is useless. The uncertainty is so prevailing that it is difficult to have a reliable prediction of how things will work out.
And this is totally true. Planning a venture's behavior is impossible if you haven't found a systematic way to capture and retain clients.
Even consolidated organizations find it difficult to forecast sales and ensure their goals are met.This is a problem. Especially if we consider that no company can make an investment or growth plans if it is not able to secure its sales (and consequently, the viability of the company itself).
Although uncertainty can't be completely removed, there are indicators which will allow you to forecast the future development of the business. They are right there, right in front of you, but we usually don't pay attention to them or we just aren't aware that they even exist.
The significance of a CRM system
A client management system or CRM (Customer Relationship Manager) is the most significant management tool within a company. If you analyze it closely, it can tell you everything about your company: who buys from you, how long it takes you to close a deal, the effort required to capture new clients, ... and if data are analyzed properly, how much you will make.
Selling is a process and a CRM system will allow you to standardize your business model. This is the only key to predict the behavior of any business.
When you create a process, you are generating a way of doing things repetitively and reliably in the company, which allows to:
- Build a business with a predictable behavior.
- Delegate tasks which allows all employees to face new challenges.
According to the stage your company is at and to the indicators you need to measure, there are several alternatives in the market which may be a better choice for you.
Audit your business operations
If you want to forecast your sales, you should start by auditing your business operations. A challenge you will face is not getting snowed under the many data you can measure. Some fundamental indicators you should consider are:
- Conversion Rate = Percentage of users which take some sort of action (i.e. convert) with your company over the sales process.
- Average Deal Size = The average price your customers pay to purchase your products or services.
- Average Lead Time = Average time required for a person interested in your product or service to become a customer.
- Customer Acquisition Cost = Cost or investment required to capture a new customer.
- Customer Lifetime Value = Value of a customer in terms of the relationship held with the company over time.
These are simple metrics which will allow you to monitor your company's health and gradually become a more predictable organization. In addition, metrics allow you to provide certainty and peace of mind to employees, customers and investors.
How about you? do you already have a sales prediction dashboard for this year?
- Building winning sales tactics