There are many product manufacturing firms in all sectors of our economy. These firms produce products which are in great demand in our day to day life. However, the demand for any product is never constant, and factors such as consumer income, changing market conditions, the personal interest of the consumer influence the demand for commodities in the market. In such a situation, a firm will be making big losses if it is unable to discover techniques for successful forecasting of sales. The techniques of sales forecasting can help companies in planning how much to produce, how many people to hire, predicting expenses, and controlling costs in difficult times. This makes it imperative for senior-level managers to understand what is sales forecasting in detail. In the next new sections, we shall discuss some famous and widely used sales forecasting techniques that work well.
Techniques and Methods of Sales Forecasting
One of the best sales forecasting techniques or sales forecasting methods is to consider the recent historical sales of the company. Since the business environment is not expected to change all of a sudden, the sales figures of the last three months will help the company management arrive at the conclusion on how much product sale they would be getting in the coming months. What the managers can do is to calculate the mean or the average of the sales of the past three months and assume that that number of units would be sold in the time to come. This is how effective sales management is possible.
Conducting research by actually interviewing potential customers and clients is also one of the most important sales techniques. You can personally meet up with your clients and ask them about their requirements and when exactly they would be purchasing the products. If you can get definite answers from them, then preparing your products for the same would not be that difficult. However, all estimates given by your clients may not be a hundred percent true and hence you should introspect and analyze the situation differently to take decisions favoring your company. Sales forecasting is an important business growth strategy that is widely implemented.
Computation of sales figures by the senior arrangement and managers of all departments is another of the sales forecasting techniques which you can implement. If the managers are experienced and have spent several years in the industry, then it will rarely happen that their forecasts go wrong. You can take the opinion of each and every manager and go with the suggestions which are most appropriate and profitable. The data regarding the purchase of raw materials, raw material costs, overall sentiment in the industry will assist a lot in the job of forecasting future sales. In the Delphi method of analyzing the future demand, repeated questioning is done to all the participants of the meeting till a single answer is received regarding the exact demand of products. Budgeting is possible only after an accurate sales forecast.
Sales forecasting should be done on a macro as well as micro-level. In the macro approach of sales forecasting, you will be considering the sales for the entire industry or sector as a whole, while in the microanalysis of sales, you will be considering the sales of companies in the upcoming months for select products. Both macros, as well as micro sales forecasting techniques, are widely used and help businessmen to determine the exact nature of the market and sales per unit which is expected.
Getting in touch with sales agents or salesmen can also be effective sales forecasting technique. Sales agents are those marketing professionals who get in touch with the customers directly and hence they would be knowing much more about what is in the mind of the customer, what are his price and quality expectations, and how much is his actual demand. From this, you can chalk out good marketing strategies to promote your product.
These were some of the sales forecasting techniques, which if implemented correctly with strategic planning, will give you positive results. So, use them and make your venture successful. Good luck!