The late great screenwriter William Goldman, who penned classics like All the President’s Men and Butch Cassidy and the Sundance Kid, is perhaps remembered best for a line never uttered in one of his films. “Nobody knows anything,” he once said in describing how nobody, not even the most successful movie producers and directors, really had much of an idea about which flicks would be blockbusters and which would be bombs.
In the years since Goldman uttered that iconic line, it has been applied to pretty much every human endeavor imaginable, including business and sales. And rightly so: As much as we all like to pretend that we have some level of predictive ability—particularly when it comes to business—there is still a lot of uncertainty and chance at work.
Yet, with all due respect to Goldman’s timeless wisdom, there are ways businesses can get a much firmer grasp on what’s to come—information that can help companies make better decisions, respond more quickly to their customers and operate more efficiently. One tool that manufacturers have at their disposal today to achieve all the benefits of more accurate demand forecasting is a powerful CRM.
Accurate forecasting requires accurate data
Properly used CRMs allow manufacturers to do their forecasting based on actual numbers instead of best guesses. This matters on a variety of levels, all of them important to the efficient operation, innovation and customer responsiveness of a manufacturer. For example, accurate demand forecasting that uses real and up-to-date numbers allows manufacturers to always have the raw materials on hand to meet customer expectations.
Not only does this allow manufacturers to respond to customer demand with rapid turnaround times, it helps them achieve this fundamental goal without unnecessary raw material waste or back orders. In an industry where margins are already slim, the kind of efficiency CRM intelligence provides is essential.
While promoting a higher level of agility and responsiveness is obviously important for manufacturers, the forecasting power of CRMs also help companies prepare for and take advantage of changing customer tastes well before they’re obvious to competitors. That’s because CRMs give early feedback about the demand for new products. This information allows manufacturers to get new or enhanced products to market faster than competitors.
Better forecasting leads to better planning
Improved forecasting then fosters better short and long-term planning. For manufacturers, this can be a significant competitive advantage because it helps companies make more confident decisions about capacity. Think about it: When executives can take a mixture of historical data and forecasts based on solid CRM-generated information, decisions involving large capital investments become more manageable. As all manufacturers already know, the concept of short-term planning is becoming more and truncated, including everything from a year to as little as just a few months. CRM forecasting helps ensure that production planning is actually tied to the real world.
Better forecasting is also a time saver for a manufacturer’s staff. Hours that were once spent compiling pipeline forecasts can be replaced with calls to promising new prospects or follow-ups with existing customers. It gives sales people and customer service personnel more time to do the part of the job they enjoy most, which has the added benefit of delighting customers. Nothing can replace the uncertainty inherent in business altogether, but a CRM can at least move manufacturers a lot closer to knowing more about the future.