How do you use industry benchmarks to improve sales forecasting?

1 Identify relevant benchmarks

The first step is to identify the industry benchmarks that are relevant to your sales forecasting. Industry benchmarks are metrics or indicators that reflect the average or best performance of a group of businesses in your sector, market, or niche. For example, some common industry benchmarks for sales are revenue growth, customer retention, conversion rate, sales cycle length, and quota attainment. You can find industry benchmarks from various sources, such as industry reports, trade associations, market research firms, or online platforms. However, make sure that the benchmarks you choose are reliable, up-to-date, and comparable to your own situation.

2 Analyze your gaps and opportunities

The second step is to analyze how your sales performance and forecast compare to the industry benchmarks. This will help you identify your gaps and opportunities, as well as your strengths and weaknesses. For example, you can compare your actual and projected revenue growth with the industry average and see if you are above or below the norm. You can also compare your conversion rate and sales cycle length with the best performers in your industry and see how much room for improvement you have. By analyzing your gaps and opportunities, you can gain insights into your sales performance and forecast, as well as your competitive position and potential.

3 Adjust your assumptions and methods

The third step is to adjust your sales forecasting assumptions and methods based on the industry benchmarks. This will help you improve your sales forecasting accuracy and reliability, as well as your alignment with the market realities. For example, you can revise your sales goals and quotas based on the industry growth and attainment rates. You can also refine your sales pipeline and funnel stages based on the industry conversion and cycle rates. You can also use different sales forecasting methods, such as historical, intuitive, or statistical, depending on the industry trends and data availability.

4 Monitor and update your forecast

The fourth step is to monitor and update your sales forecast regularly based on the industry benchmarks. This will help you keep track of your progress and performance, as well as adjust to any changes or challenges in the market. For example, you can review your sales forecast monthly or quarterly and compare it with the industry benchmarks. You can also update your sales forecast whenever there are significant events or factors that affect your sales, such as new product launches, customer feedback, competitor actions, or market shifts. By monitoring and updating your sales forecast, you can ensure that it is realistic, relevant, and responsive to the industry dynamics.

Using industry benchmarks to improve your sales forecasting is a smart and effective way to enhance your sales planning and execution. By following these four steps, you can leverage the industry benchmarks to compare, analyze, adjust, and monitor your sales forecast, as well as your sales performance and potential. This will help you achieve your sales goals and grow your business in a competitive and changing market.

5 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?