Using person-centric methodologies for accurate sales forecasting

In many organisations, sales forecasting is a top-down approach with commercial teams providing a target which becomes the forecast which the business then must achieve through various means.

Multiple business factors impact sales and the ability to achieve these forecasts, including the examples provided below:

• Product & Pricing
• Organic growth
• Marketing

The overall % contribution from the example factors listed above will be different for all organisations however let’s assume it looks like this.

In this article, we will delve deeper into marketing specifically and how marketing teams tend to forecast sales.

The conventional approach to marketing typically looks like the below where different teams work with relevant stakeholders and sales channels, and focus on a demand metric which may include site sessions, foot traffic or interactions with call centres. They then deduce demand, apply the historical conversion rate to then predict sales.

This approach is fundamentally flawed as the total unique number of people is usually much less than what is forecasted, creating a disconnect between demand forecasts and the actual demand. One person as an example could call the call centre, visit the website 10 times triggering multiple sessions and then walk into a retail store before converting – meaning the actual demand was much less than what was forecasted, resulting a conflict between various marketing, sales and commercial teams and most importantly, impacting overall sales results.

An effective method to correctly forecast sales is to use a person-centric methodology, incorporating an identity link resolution platform to identify a unique customer alongside a combination of demand metrics. This is essential to both dedupe demand interactions and to understand the actual impact of various channels on the customer journey.  Powered by a holistic marketing measurement and attribution system, this would combine both online and offline environments to provide full transparency of data inputs, modelling methodologies and data relationships to drive confidence across the business in the outputs and recommendations delivered.

Benefits of this approach:

• Forecast number of sales based on people centric methodology and relevant marketing investments.
• Maximise marketing effectiveness, driving profitability and a much stronger ROI whilst ensuring marketing operates as a commercial function.
• Provide a much clearer understanding of how consumers interact across both online and offline environments.
• Demonstrate clearly how one channel influences the other and credit each touchpoint appropriately.