Introduction
Organizations use sales forecasting to predict how much of a product or service they'll sell in the future. Forecasting involves analyzing historical data, market trends, and other relevant factors to identify patterns and trends that can be used to make predictions. The goal of sales forecasting is to help businesses make better financial decisions, allocate budgets, and develop strategies.
Sales forecasting helps organizations to:
Anticipate future demand: Businesses can adjust production, inventory, and staffing levels to meet customer needs while minimizing waste and reducing costs.
Identify problems and opportunities: Businesses can use sales forecasting to determine which sales activities to focus on, which prospects to pursue, and whether to adjust their team's quota.
Improve overall performance: Research by the Aberdeen Group found that companies with precise sales forecasts enjoyed 13.4% more year-over-year growth than companies with inaccurate estimates.
All members of a sales team can use forecasts to provide them with insights.
Some examples of how individuals in a sales organization might use forecasting include:
Sellers: Sellers can use forecasting to track performance against targets and identify pipeline risks that might jeopardize their ability to hit them.
Managers: Managers can use forecasting to track individual sales performance against quotas to proactively provide coaching.
Directors: Directors might use forecasting to forecast trends to anticipate departmental sales and reallocate resources if necessary.
Organization leaders: Organization leaders can use forecasting to project estimates to change the product strategy or provide updated projections to investors.
Dynamics 365 Sales includes a forecasting feature that organizations can that tailor to best fit the needs of their organization. Throughout the remainder of this module, we examine how forecasting in Dynamics 365 can be configured.