Use AI to improve the accuracy of your sales, Sales are a crucial aspect for developing your business. Every small step you take in your organization depends on the revenue from sales that you generate over a specific period of time. Actions like hiring, goal setting, marketing, etc., hinge on the profits you receive.
Therefore, it is important to have an approximate estimate of how much income your business can generate in a month or year based on current data. This process is called sales forecasting.
Now, based on what data can you forecast future sales revenue and make informed decisions for your business? Here are some key sources:
- Industry trends
- Historical customer data (customer behavior, purchase history, etc.)
- Sales pipeline
- Customer surveys
- Sales reports
And the list goes on.
When you can make accurate forecasts, you can meet customer needs, make informed decisions about the next best actions, and logically allocate resources.
Another important point to understand is that forecast reports will not give you exact figures. Uncertainty will always exist. The only good thing about forecasting is that it provides you with an approximate idea of what to expect in the future, allowing you to formulate strategic plans accordingly.
So, what are the key ingredients for better forecasting?
1. Factors to Consider When Forecasting
To succeed in forecasting, it’s essential to understand several key points:
Document the sales process:
Record all actions and steps required to close a deal. For instance, meeting with the buyer, sending follow-up queries, etc. This helps identify the most effective closing techniques.
Set quotas:
Establish monthly or yearly quotas to facilitate planning. Individual quotas enable you to pinpoint team performance gaps and provide necessary feedback. They also aid in future sales forecasting based on current targets, allowing adjustments to presentations or sales methods.
Implement CRM for sales funnel management:
Use a CRM application to understand and manage your sales funnel, enhancing the accuracy of sales forecasts.
For a streamlined forecasting approach, leveraging AI can automate your forecasting activities. Let’s explore how AI intervention can enhance the accuracy of your forecasts.
2. AI for Improving Sales Forecasting
Some common reasons for inaccurate sales forecasting include lack of high-quality data, errors in the pipeline, etc. The likelihood of errors increases when humans are involved. On the other hand, with AI:
- You can generate and process a plethora of error-free data. This will help you obtain valuable information and make accurate conclusions about your business. According to a McKinsey report, AI-based forecasting can reduce errors by 20-50%.
- You can deploy chatbots to easily gather information by giving various commands.
- You can use lead scoring methods to evaluate leads based on various factors such as customer engagement, demographics, etc. This will enhance your forecast, allowing you to focus on leads more likely to convert.
Chatbots expand access to information about customer behaviors and patterns. This helps forecast sales trends, increase sales, and enhance customer satisfaction. Vtiger’s AI-powered chatbot quickly assists customers and provides accurate solutions as part of the AI Calculation. This means better understanding of customer needs alongside consistent service quality. Ready to dive deeper?
You can also explore other blogs dedicated to Artificial Intelligence:
- How AI is changing customer experience
- How chatbots are restructuring customer support
3. The benefits of using AI for sales forecasting include
Cost reduction:
With AI handling most tasks, you can cut down on hiring costs and complete tasks more efficiently. Money saved on hiring can be invested in other useful activities.
Enhanced decision-making processes:
Having access to raw and factual data enables better revenue forecasting and participation in group discussions. You can accurately plan budgets for various activities and reduce overspending.
Increased sales:
Precise forecasting and assessment help identify potential customers and close deals more effectively.
Vtiger also offers its own sales forecasting tool called Calculus. Use Vtiger’s calculus to monitor customer behavior, improve deal assessments, and much more.