Sales Forecasting Using AI: The Future is Here
9 January 2020 Sales Intelligence
4 ways AI-powered sales forecasting can help you can make smarter business decisions
When it’s time to make critical business decisions that will determine the long-term success of your organization, would you rather rely on guesswork, or hard data?
More often than not, the determining factor between an organization’s failure or success is their ability to make smart business decisions based on accurate, data-driven sales forecasting.
Consider these 3 key statistics:
- According to research from the Aberdeen Group, companies boasting accurate sales forecasts are 10% more likely to grow their revenue year-over-year.
- The majority (74%) of large B2B companies engage in forecasting on a weekly basis.
- Research from McKinsey shows that companies that base their marketing and sales decisions on data improve their return on investment by 15%-20%. In addition, they are 5%-6% more profitable than their competitors.
Simply put, the days of relying on intuition and guesswork to make important business decisions are over.
In order to remain competitive, you must collect accurate and thorough sales data, and be able to analyze that data in order to spot risks and make accurate predictions about future growth opportunities.
How to make smarter business decisions with data-driven sales forecasting powered by AI
One of the most obvious applications of AI and Machine Learning is predicting future sales based on historical data. Unlike ambitious goal-setting, historical data gives you an accurate and realistic picture of how much revenue your team should be generating within a certain time period.
By relating your current transactional and customer interaction data (emails, meetings, phone calls, etc.) to actual sales outcomes, AI-powered sales forecasting tools can predict future revenue to an extremely high degree of accuracy.
When you can accurately forecast what revenue will be and spot risks early, you can use that knowledge to allocate resources and manage your workforce more efficiently. In addition, cutting waste enables your organization to be more agile so you can quickly respond to changing market conditions.
AI-powered sales forecasting can provide valuable insights in these 4 main areas:
1. Improve lead scoring and pipeline management
By analyzing demographic, transactional, and customer interaction data, AI-powered sales forecasting tools can now segment leads in your pipeline based on how profitable they are likely to be and how engaged they are (an indicator of how quickly they are likely to close).
Instead of wasting time reaching out to leads that aren’t likely to be interested in your products, these tools can now analyze your sales data and generate a list of the most viable and profitable opportunities to contact first.
This data can also allow you to identify and fix weak points and bottlenecks where leads are getting stuck in the sales process, or falling out of your pipeline completely.
2. Maximize customer lifetime value
Research by Salesforce found that, by 2020, 57% of B2B customers will switch brands if a supplier company fails to actively anticipate their needs.
Because of this, it’s crucial that you be able to identify underserved customers and proactively find ways to meet their needs, before they decide to switch to one of your competitors. After all, acquiring a new customer is 4x more expensive than upselling to a current customer.
By analyzing purchasing patterns among each of your customer segments, AI-powered sales forecasting tools can generate personalized recommendations for what customers should buy next, based on their own preferences and behavior, as well as what similar customers have bought in the past.
According to McKinsey, a full 35% of purchases on Amazon come from these kinds of highly-personalized product recommendations.
AI-powered product recommendations are a quick and sustainable way to proactively meet your customers’ needs and boost revenue at the same time.
3. Customer retention
Research done by Frederick Reichheld of Bain & Company shows that increasing customer retention rates by 5% increases profits by a whopping 25% to 95%.
Your sales team should know who their big buyers are and be focused on taking care of them to ensure the highest customer satisfaction and retention rates possible.
You probably know who your largest accounts are, but AI can now sift through all of your transactional data and identify other accounts that are growing quickly.
You simply can’t afford to lose those large accounts, so you need to be able to identify them, and then make them a top priority for your team.
According to research by Esteban Kolsky, 67% of customers report bad experiences as a reason for churn, but only 1 out of 26 unhappy customers complain.
AI-powered sales forecasting tools can allow you to identify the top factors that cause customers to churn, so you can spot at-risk accounts, and proactively reach out to them to address their concerns and make sure they are thoroughly satisfied.
This also includes identifying customers who have signed up for a trial of your product, but haven’t begun using it. When you are able to identify these accounts in the trial stage, you can reach out to them to offer assistance or tutorials to help on-ramp them and help them see the full value of using your product.
4. Performance management
According to the 2017 CSO Insights World-Class Sales Practices Report, the average quota attainment was a mere 53% for U.S. salespeople in 2016.
Fortunately, AI-powered sales forecasting tools can greatly help with this large and growing problem. According to research from the Aberdeen Group, companies boasting accurate sales forecasts are 7% more likely to hit quota.
By utilizing sales reps’ activity and performance data, AI-powered sales forecasting tools can help managers be more effective at correcting performance issues, setting realistic sales goals, incentivizing high performers, and motivating their team.
AI can now look at each, individual sales rep’s past performance and current sales activity to predict how likely each salesperson is to hit their quota.
AI can also identify areas of improvement for each sales rep, and make suggestions for actions to take to increase the chances of closing the deal.
In fact, 62% of high-performing salespeople expect AI to transform Guided Selling (ranking the potential value of each opportunity and suggesting next steps) over the next few years, according to Salesforce’s State of Sales report.
Salesforce’s own Einstein AI technology promises to “increase efficiency with AI-powered advice displayed right where your employees work — give suggestions for cross- or upsell, make recommendations to decrease attrition, and more.”
“In my mind, the debate is over. You need AI to make your forecasting process more accurate, and also to help your salespeople and guide them through virtual coaching, help steer them toward the more lucrative opportunities. It’s essential to running a sales organization effectively.” – Dana Therrien, practice leader of sales operations strategies at SiriusDecisions
Should salespeople be worried about being replaced by AI?
Our world is undergoing massives changes spurred on by rapid technological advancements. These changes are happening faster and faster with each passing year, and they will affect every industry in significant, unpredictable ways. The B2B sales profession is no exception.
However, it is important to remember that this has always been the case. Just because new technology is becoming a bigger part of your job as a B2B salesperson doesn’t mean all hope is lost.
“There are so many think pieces about how AI will replace salespeople, but I think it will simply thin the herd. The future isn’t “death of a salesman,” it’s “death of a lazy salesman.” The best salespeople will embrace it and automate their lives to spend more time closing.” – Chris Fago, cloud security specialist, RedLock
Rather than being replaced by robots, B2B salespeople who continue to take advantage of new technologies will be able to quickly gain deep insights on their customers, automate low-level tasks, and free up more of their time to spend on the personal, human connections that will continue to be the basis of every sales relationship into the foreseeable future.
For now, AI is helping remove human guesswork and intuition from the sales forecasting process. This new technology guides reps with data-driven suggestions for what to do next in order to close deals, it gives sales managers a realistic view of the pipeline, and it enables accurate forecasting so organizations can make smarter business decisions.
However, there is still one major obstacle to overcome; manual data entry.
You can only derive valuable insights from your sales data if you’re collecting it in the first place
“AI engines like Einstein are good at sales forecasting once they have the data signals, but not so good at getting sales reps to input the data” – Dana Therrien, practice leader of sales operations strategies at SiriusDecisions
The benefits of AI-powered sales forecasting tools like Einstein are clear and abundant. Unfortunately, sales reps rarely see the value in collecting all of this data, and few take the time to manually enter it into your company’s CRM.
To make things worse, the process of manually entering sales activity and customer data into a CRM like Salesforce™ is often extremely tedious and frustrating, further decreasing the chances that your sales reps will actually take the time to do it.
According to Salesforce:
“Data quality is important to CRM even without AI because quality data helps reps increase efficiency, build trust with customers, and use Salesforce effectively.
When you add AI to the mix, data quality becomes even more important. The predictive models behind Sales Cloud Einstein are based on your Salesforce data, so having complete, accurate data helps Einstein give you the best predictions, recommendations, and insights.”
Inaccurate and incomplete data is often just as unreliable as having no data at all.
While getting sales reps to enter accurate and thorough data is an uphill battle, you simply can’t afford to not have this data.
The only viable solution is to find a way to eliminate manual data entry entirely and make the whole process automatic. However, until now, there has been no reliable technology capable of doing this.
ZynBit automatically collects 100% accurate and thorough sales data
With ZynBit, your sales reps can carry out their work like they normally do, sending emails, booking appointments, making phone calls, etc. As they work, ZynBit’s sidebar for outlook automatically tracks and syncs their sales activities with SalesForce, without them even having to think about it.
By eliminating manual data entry, ZynBit gives your sales team hours of valuable time back that they can use for high-impact sales activities and coaching.
It’s like having a virtual sales assistant working behind the scenes to record events in Salesforce, book meetings, and find the data-driven insights your team needs to deliver sales quotas.
- Your sales reps always know how to prioritize their pipeline
- Managers know where to focus to improve team performance
- Sales leaders can easily see the data they need to optimize strategies and goals
ZynBit makes AI-powered sales forecasting tools possible
AI-powered sales forecasting tools leverage machine learning to uncover patterns in your data and provide valuable insights that can improve decision-making, increase efficiency, and expand your sales team’s capacity to satisfy more customers and close more deals.
However, these tools can only provide these valuable insights if the data in your Salesforce account is thorough, accurate, and up-to-date.
ZynBit makes sure that your Salesforce account is always up-to-date with 100% accurate sales data so that you can take full advantage of all the powerful features these AI-powered sales forecasting tools have to offer.
Try ZynBit Free for 14 Days
If you’re ready to see how ZynBit can help your sales organization become data-driven, sign up for your free, 14-day trial here.