Turning Customer information into sales

knowledge
Summary

Understanding what to offer to what market requires understanding customers, but making that
understanding actionable requires more. Creating a customer knowledge competence, or the ability
to gather, analyze, and utilize customer knowledge effectively at the organizational level is an
important goal to which salespeople can contribute. A first step in developing that competence is
customer data integration or CDI.

Many areas of the firm rely on customer data gathered by salespeople and through other means.
Manufacturing, product development, marketing, sales management, human resources, and others
rely on such data in order to create forecasts for their area of operations. Sales forecasting, then, is
an important role for the sales force

One of the first estimates a company tries to make is an estimate of the market's potential or overall
demand. Overall demand is influenced by a number of factors, such as elasticity, but also by the
economy, laws and regulations, social factors, demographic factors, and others. Sales potential, or
what the company could sell if all went well, is another estimate. In addition, executives also
forecast what is likely to be sold.

The methods used to generate these estimates are time series techniques, including trend analysis,
moving averages, and the use of exponential smoothing. Correlational analysis is a form of trend
analysis but instead of basing the trend on past sales, the trends of other variables are correlated.
Variables that trend ahead of sales are called leading indicators. Some of the correlates are variables
such as the Consumer Confidence Index.

Response modelling is a growing area of forecasting. These are statistical models

that consider the influence of marketing factors, such as how much the company is planning to
spend on advertising and sales efforts. A specific form of response modelling is to conduct a market
test, or a trial of all of the marketing factors, and see how customers respond.

Judgment techniques are also used, including expert or executive opinions and surveys of customers
or channel members. Even sales force composites are considered judgments of the sales team.

Forecasts are limited by the quality of data used treat the forecasts, the degree
to how rapid things change. length of the planning horizon, and how much the company wants to
spend on creating a forecast. No matter how much money and time is made available, forecasting N
not an exact science. To improve forecast accuracy, companies should make a commitment to
forecasting accurately In addition, forecasting accuracy can be
improved by using multiple methods, picking the night methods for the business, using as much
information is possible, planning for multiple entries, and adjusting the forecast as things change.